Missouri Real Estate Commission awards InterNACHI school accreditation.

[Nick Gromicko]

What the heck, I'll say it one more time. A home inspector law that prohibits an inspector from attempting to limit his liability to less the $10,000, which most of the time will not be held up in court anyway, has done something wonderful...

It has, BY STATUTE, permitted inspectors to limit their liability to $10,001. The judge now has a value where limitation is permitted.

I sure wish I could limit my liability to $10,001 by statute!

[Nick Gromicko]

P.S. I predict that you will all end up with the least expensive E&O in the country.

[jbushart]

Originally Posted by gromicko

What the heck, I'll say it one more time. A home inspector law that prohibits an inspector from attempting to limit his liability to less the $10,000, which most of the time will not be held up in court, has done something wonderful...

It has, BY STATUTE, permitted inspectors to limit their liability to $10,001.

I sure wish I could limit my liability to $10,001 by statute!

You selected only one of the five, Nick.

And you have missed the point of the law, entirely.

Why do you think there is a trial lawyer position permanently assigned to this board? To ensure that home inspectors have limited liability?

They do not.

While they, themselves, are unable to negotiate a lower liability than $10,000 for errors and omissions....their clients are free to sue them for tens of hundreds of millions for fraud, negligence, or breach of contract (which most do).

This negotiation of a lower liability was not forbidden in the law because, as you wrongfully conclude, it never held up in court. It did hold up in court which is why the law (as lobbied by the Trial Lawyers Assoc, along with their oversight of the board) specified that it could no longer be done. Why forbid a practice that was generally ignored? In fact, Dan has listed several businesses in Kansas where the law still allows such limitations of liability to be negotiated.

[Nick Gromicko]

Negligence and breach of contract are forms of errors and omissions.

Gross negligence isn't. But there is a big difference between gross negligence and mere negligence.

As for fraud, an inspector guilty of fraud should lose in court.

[Nick Gromicko]

And if you don't think that negligence and breach of contract are forms of errors and omissions and limited to $10,001 (if using the InterNACHI Kansas inspection agreement)... you are free to limit it to the cost of the inspection then.

Pick your poison, either way your liability is limited to $10,001 or something less.

[jbushart]

Originally Posted by gromicko

As for fraud, an inspector guilty of fraud should lose in court.

One does not have to be "guilty" of fraud to be sued for it...with the unlimited punitive damages that are allowed to accompany it.

If your advertising says that you "exceed" a particular standard and your inspection report reflects that you did not....that could be fraud.

If your advertising or contract reflects that you are a member in good standing of NACHI...and the plaintiff's request for verification to NACHI shows that the inspector is 10 hours shy of last year's CEU requirements....that could be fraud.

The list is a long one...and any attorney who knows how to inflate a contingency lawsuit will be able to cook any Kansas inspector he wishes no matter what this law says....and he will have a trial attorney on the Licensing Board who will provide him with an official Licensing Board interpretation of the law that will allow him to do so.

This law protects no one from anything, Nick.

[Nick Gromicko]

Limit your negligence to the cost of the inspection and your entire liability to $10,001. If the judge points at the statute's $10,001 limit in throwing the former out, then the latter stands. If he doesn't... even better for you.

[Nick Gromicko]

One does not have to be "guilty" of fraud to be sued for it...with the unlimited punitive damages that are allowed to accompany it.

I don't see a scenerio whereby a plaintiff could be awarded punitive damages against an inspector who didn't lose the suit.

[Nick Gromicko]

And if your argument is that the law doesn't outright prohibit lawsuits against inspectors, I of course agree... but a $10,001 limit sure deters 'em!

[jbushart]

Originally Posted by gromicko

And if you don't think that negligence and breach of contract are forms of errors and omissions ...

The law does not include all "forms" of errors and ommissions, but instead, names it singley and exclusively.

This is why Reece-Nichols RE Brokerage stopped recommending home inspections. They know that I have $10,000 at stake when I find a spot on the ceiling in a closet. Accordingly, they know that the only way I can protect myself is to tell the client all of the possibilities ---- that there could be concealed rot or mold behind every blemish.

No sir...my liability is so great in Kansas that the realtors can not take the chance that I cover myself with such a report.

There is nothing in this provision that helps an inspector and there is much in it...and in othe provisions of this law, that harm him.

[jbushart]

Originally Posted by gromicko

I don't see a scenerio whereby a plaintiff could be awarded punitive damages against an inspector who didn't lose the suit.

It's not the award...but the amount of damages claimed...that determines what level of court will hear the case...thus increasing the costs.

[Nick Gromicko]

True. The law doesn't limit the inspector's legal defense costs.

[Gary L. Farnsworth]

Some RE that I have talked to are scared NOT to recommend a home inspector, or give a list of inspectors to their buyers. They know that they will have to discuss with the buyer to have the buyer sign a disclaimer that says the buyer is not hiring an inspector. Basically, most all homes are being sold "as is", and not getting any inspection whatsoever. Talk about liability on the RE. It is what this bill in Kansas is all about. Moving liability to the home inspector. Kansas laws are specific, and no matter the circumstances, you can sue any body for any amount at any time. In lawsuits over $15,000, you automatically get a jury trial. The Kansas home inspection laws will keep courts and attorneys busy. I know the bill gives us 12 month time limit, but attorneys can always find another reason/way to reap your E&O insurance.

The other question is the seller's disclousure. You need to get a copy at each inspection. You can get others involved if errors on the disclousure arrise, and if you get served. Your reports should include every paragraph that Dr. Keith Swift can come up with for disclaimer language. A realtor that recieved one of my newer reports recently asked "why all of the reading?". She was surprised to learn about the new bill, of which she knew nothing about. My inspection explanations are much longer than the actual report, and are all included in the report itself. Thanks Dr. Swift.