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What if the inspector missed something major before closing?

On Behalf of | Apr 17, 2023 | Property Law

There are many types of protection in place when someone buys a home to help them avoid major mistakes. For example, especially if they need financing for the transaction, a prospective home buyer will typically need to have an inspection performed.

A professional inspector will walk through the property to check all of its major systems, from its electrical supply to its foundation. They will then produce a report detailing the condition of the property. That report, in theory, will help convince the lender to fund the mortgage and will lead to the transaction closing as it should.

Unfortunately, there are rare scenarios in which inspectors don’t spot issues with a property before closing. The new homeowner may then have some very unpleasant surprises in store when they take possession. What happens if an inspector makes a significant oversight?

Inspectors typically have insurance coverage

Like other professionals whose opinions have major financial implications, real property inspectors tend to carry professional insurance coverage that will protect them from claims related to errors and omissions in the reports that they provide.

In theory, individuals who move forward with a real estate purchase because the inspection showed the property was in good condition may be able to make a claim against an inspector if it becomes obvious they were incorrect. Such claims typically require substantial evidence that will make it clear that the issue did not arise between the closing and when someone filed their claim.

The longer it has been since the closing and the less documentation there is of the property’s condition, the harder it can be for buyers to hold an inspector accountable for defects that they did not include in their inspection report.

Insurance claims and litigation often follow the discovery of a defect

There are sometimes scenarios in which professionals admit they have made mistakes and cooperate with disappointed clients that now own properties with serious issues compromising their value. Other times, the inspector denies making a mistake or failing to notice a defect, which may result in the case going to court.

Those who are shocked to discover a very expensive problem with the property they had professionally inspected may need to discuss the situation with an experienced legal professional in depth to determine the best way forward. Learning more about the protections available for buyers during residential real estate transactions can help those who discover a major issue after closing.