When you hired a home inspector to evaluate the house you bought, the idea was to make sure nothing was seriously wrong with it. The home inspector would have issued a report, perhaps saying that the house was basically sound, with all its major parts and systems in working order. You confidently purchased the home.
But what if, weeks or months later, you start to notice problems no one warned you about? Let's say, for example, there's a strange smell in the basement, which turns out to indicate an extensive water leak, which caused mold. You hire an engineer, at great expense, who surveys the home and notifies you that the the leak is one of several major structural deficiencies. The original home inspector missed all of these.
As a homeowner, do you have any chance of a financial recovery from your home inspector to cover the cost of such repairs?
Before reaching the issue of claims against the home inspector, consider making a claim against the home seller. Different states have different rules and regulations governing suits against sellers for undisclosed, known defects. Or, if you purchased a newly constructed home, you might have legal claims for defects against the home builder.
In most states, sellers can face liability if they fail to disclose a material defect with the home that they knew about at the time of sale. A material defect is not something minor, like chipped paint in the garage; rather, it's something like a termite problem or a collapsing roof. The key, however, is that the seller must have known about these material defects at the time of sale, and failed to disclose them to you. Read more about Suing the Home Seller.
There are multiple legal theories upon which you could sue the home inspector.
For example, you might have a claim for negligence or professional malpractice, if the inspector deviated from the professional standard of care in the course of the inspection. Negligence is ordinarily defined as the failure to act as a reasonable person in the same shoes would have acted, where damages result from the behavior. The best way to prove that your inspector was negligent is to show that a reasonable inspector, looking at the same place, would have discovered the defects.
How can you prove this? Consider finding a second (or even third) inspector, in order to get multiple opinions. If you have two experts who examine your home and write reports stating that the original expert should have discovered a particular defect, this would be compelling evidence against the original expert.
Also be sure to take photos of the area before starting any clean-up efforts, both to show the extent of the damage and to provide any clues about whether old problems might have been visible during the inspection itself.
You might also have a cause of action for breach of contract, particularly if you had a written contract with the inspector in which he or she agreed to perform certain specific types of review that were, in fact, never actually performed. For example, the contract might have required the inspector to perform certain specific tests on the pipes. In this case, the breach of the contract could lead to consequential damages; that is, damages that were reasonably foreseeable from the breach. That might, for example, be the cost of repairing the damage from the burst pipe.
An important note of caution before you run to court: Many home inspectors limit their legal liability within the contract the home buyer signed with them, using what's called an exculpatory clause. For example, the contract might explicitly limit any liability resulting from the report to simply the price of the contract (the amount of money you paid to the inspection firm).
This amount of money is likely insignificant compared to what you will have to pay to cure various structural or mechanical defects now found in your home. Nevertheless, that sort of limitation on liability could severely reduce your chances of recovery in a court of law.
More broadly, the contract might disclaim liability for areas the inspector couldn't see or access. So, if the home seller had built flooring in the basement which made seeing underneath it impossible, the inspector might have simply noted on the report that he or she couldn't see further, leaving you to follow up and bear responsibility.
If you believe you might have legal claims against your inspector, it could be worth sitting down with an attorney and reviewing the contract you signed with your inspector. Your attorney will be able to help you analyze any limitations on liability within the contract document under your state's law.
Even if your inspector has an exculpatory clause that would limit liability, he or she probably does not want to deal with an expensive lawsuit; particularly since lawsuits are publicly filed. Moreover, a public litigation and unhappy customer will likely be worse for business over the long run than a quick settlement.
The inspector's firm might have insurance to cover minor settlements. A confidential negotiation or mediation might be the best mechanism to achieve a settlement of your claims against your inspector.