Robert B. Jacobs: Liabilities of home inspections
By Robert B. Jacobs
Contra Costa Times Correspondent
Posted: 07/18/2010 12:00:00 AM PDT
You be the judge. Here’s a case recently decided by one of the California appellate courts.
A daughter inherited a property from her mother, who had lived in the property for more than 40 years. Before inheriting the property, the daughter had it inspected by a licensed home inspector. The report noted evidence of “wood-destroying insects, organisms and/or rot observed at posts, doors, and trim.”
The inspector also noted loose flashing at a balcony deck, which could lead to water damage. The inspector recommended a further inspection by a termite inspector.
The daughter thereafter hired a termite inspector, who found drywood termites throughout the main house and also found damage to a support post. The termite inspector recommended fumigation and repairs to the damaged areas. The termite inspector didn’t find or report any damage to the balcony railing at the elevated deck.
The daughter had the house fumigated, but didn’t have any repairs made to the wood that had been damaged by the termites or other wood-destroying pests. A few months later, the daughter’s son and daughter-in-law purchased a one-half interest in the property and moved in.
Some time later, the daughter’s son and daughter-in-law invited a guest to their new home. This guest leaned against a balcony railing. Due to the unrepaired wood damage, the balcony gave way and the guest fell approximately 10 feet to the ground below.
The falling guest
sued. Who is at fault?
The Court of Appeal decision noted that the daughter who arranged for the inspections knew about the wood damage. She chose to have the house fumigated but didn’t repair the damaged wood. However, the court didn’t discuss the daughter’s liability and it appears that she was not part of the suit.
It’s not clear whether the falling guest didn’t sue the daughter, or whether the settled with the daughter. However, the guest did sue the termite inspector, claiming it should have discovered and reported the damage to the balcony railing.
The guest claimed that the damaged railed constituted a safety hazard and that the termite inspector had a duty to discover and report the damaged wood and to recommend that it be repaired.
So as between the falling guest and the possibly negligent termite inspector, who wins?
The Court of Appeal found that a termite inspector does have a duty to “make a reasonable assessment of property for potential safety defects.” But the court also found that the falling guest didn’t hire the termite inspector and so there was no contract between the termite inspector and the falling guest.
The court further found that the termite inspection report was prepared for the daughter’s benefit. It found that the termite inspector didn’t prepare the report for the benefit of the falling guest, and as a result, the termite inspector owed no duty of care to the guest.
Therefore, even if the termite inspector failed to find or report the damage to the balcony railing, the guest had no valid claim against the termite inspector. This decision is reported as Formet v. The Lloyd Termite Control Co. 2010 DJDAR 8738.
This case involved a complex analysis by the court of duty and negligence liability theories. Liability issues and questions can be complex, and are governed by a sophisticated set of statues and case law. The fact that the falling guest lost this case is no indicator as to a how a court may rule in any given situation.
Robert B. Jacobs practices real estate, business and construction law in the Bay Area. Contact Jacobs at Bob7@RBJLaw.com or www.RBJLaw.com. The foregoing article is not a complete discussion of the subject addressed, and should not be relied on. Readers with specific questions or issues should consult an attorney.