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  1. #1
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    Default Limitation of Liability in your state

    My state (Oregon) has historically allowed and upheld Limitation of Liability Clauses for HIs. At least that what I've read and been told (never had to find out firsthand... thankfully).

    Anyway, there have been rumblings about some legislation to disallow these clauses in our contracts and I'm trying gather some information. I know I've read a lot about this over the years around here but can't find much in the way of specifics from searching. Basically, I'm looking for specific laws or legal precedence for Limitation of Liability Clauses in HI contracts by state.

    And please.... I'd like to keep this to legislation and past legal rulings and not turn it into a thread about the concept of LOL clauses. That I did find in excess from searching.

    Thanks for any info you can share from your state or area....

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  2. #2
    Join Date
    Mar 2007
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    Spring Hill (Nashville), TN
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    Default Re: Limitation of Liability in your state

    The two states that I hold a license in do not care if you have a limit of liability in your contract or not. It is up to the court/judge to decide if they will allow it. So far and out of the 100+ cases I have been involved in since 2000 as a litigation consultant, I have never seen it hold up in court. Most of the time the plaintiffs attorney gets it dropped because they claim that their client is not being allowed to recover their loss that was caused by the inspector. This gets the judges attention pretty darn quick.

    What I have seen work is when a maximum dollar amount is listed as the limit of liability. This is double or triple the inspection fee plus an additional monetary amount. Most of the time this amounts to a maximum of around $2000 to $5000.

    Scott Patterson, ACI
    Spring Hill, TN
    www.traceinspections.com

  3. #3
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    Santa Rosa, CA
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    Default Re: Limitation of Liability in your state

    Quote Originally Posted by Matt Fellman View Post
    My state (Oregon) has historically allowed and upheld Limitation of Liability Clauses for HIs. At least that what I've read and been told (never had to find out firsthand... thankfully). Anyway, there have been rumblings about some legislation to disallow these clauses in our contracts and I'm trying gather some information. I know I've read a lot about this over the years around here but can't find much in the way of specifics from searching. Basically, I'm looking for specific laws or legal precedence for Limitation of Liability Clauses in HI contracts by state. And please.... I'd like to keep this to legislation and past legal rulings and not turn it into a thread about the concept of LOL clauses. That I did find in excess from searching. Thanks for any info you can share from your state or area....
    Matt,

    The state just to your south limits a home inspector's liability in the Business & Professions Code (7195-7199) to 4 years from the date of the inspection. However, as Scott has already pointed out, the courts do not necessarily follow this. I have heard different versions, such as 4 years from the date of discovery (which could be pretty much be the rest of my life) and 4 years from the date that it should have been discovered (what? Isn't that the inspection date?).

    CA Codes (bpc:7195-7199)

    As Scott already stated, I have heard that a "reasonable" dollar amount is generally acceptable to the courts. This would not be the case with gross negligence, though. The courts can soak you for pretty much anything at that point.

    Department of Redundancy Department
    http://www.FullCircleInspect.com/

  4. #4
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    Default Re: Limitation of Liability in your state

    Quote Originally Posted by Gunnar Alquist View Post
    Matt,

    The state just to your south limits a home inspector's liability in the Business & Professions Code (7195-7199) to 4 years from the date of the inspection. However, as Scott has already pointed out, the courts do not necessarily follow this. I have heard different versions, such as 4 years from the date of discovery (which could be pretty much be the rest of my life) and 4 years from the date that it should have been discovered (what? Isn't that the inspection date?).

    CA Codes (bpc:7195-7199)

    As Scott already stated, I have heard that a "reasonable" dollar amount is generally acceptable to the courts. This would not be the case with gross negligence, though. The courts can soak you for pretty much anything at that point.
    Gunner, brings up a good point and one that I totally forgot about. Many states do limit a inspectors liability to X number of years when a claim can be brought. A few have a 1 year from the date of the inspection; a few have 2-3 years; and several like TN are silent and it reverts back to other business practice laws in the state. MS has a 3 year limit. I think AL has a 1 year limit.

    In TN we are on the hook for around 6 years after the date of the inspection. Our state ASHI chapters have legislators working on a 1 year limit. We doubt we will get the 1 year, but we take just about anything that sets our limit to less than what we now have!

    I have seen this type of limit holdup in court. It is a state law that is really hard to get around. Now if you are negligent or perform fraud and it is blatant, then nothing will help you.

    Scott Patterson, ACI
    Spring Hill, TN
    www.traceinspections.com

  5. #5
    Join Date
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    Oregon
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    Default Re: Limitation of Liability in your state

    Thanks for the info guys....

    In Oregon the Contractor's Board says we're on the hook for a year. I've seen them take claims a bit longer than that too.

    I like the idea of a set dollar amount.... say 4 or 5K. Anything but just unlimited which is what would effectively happen if they ruled out the clauses.


  6. #6
    Join Date
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    Spring City/Surrounding Philadelphia area
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    Default Re: Limitation of Liability in your state

    Pennsylvania has a 1 year limit of liability for home inspections.


  7. #7

    Default Re: Limitation of Liability in your state

    Connecticut is 3 years for negligence and 6 years for breach of contract.


  8. #8
    Michael Greenwalt's Avatar
    Michael Greenwalt Guest

    Default Re: Limitation of Liability in your state

    Kansas is one year from the date of the inspection. No inspector may limit thier liability to less than $10,000 for any errors or ommissions in their contract and the client claim is limited to $2,000 for any errors or omissions. I know that sounds a bit out of whack but there was an...ahem....mistake by the state revisor when the law was filed. Current legislative attempts to fix this error have been unsucessful as the bill gets whacked in committee. The exculpatory clause is still allowed for other issues outside the scope of E&O.


  9. #9
    Join Date
    Mar 2007
    Location
    Portland Oregon
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    11

    Default Re: Limitation of Liability in your state

    Jerry Weaver in Oregon here. As an additional question to Matt's. Do any of you have a problem with your E&O provider if you do not have a Limit of Liability in your contract? Is your E7O really expensive? I pay a $1000.00 or so now.


  10. #10
    Join Date
    Mar 2007
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    Spring Hill (Nashville), TN
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    Default Re: Limitation of Liability in your state

    Quote Originally Posted by Jerry Weaver View Post
    Jerry Weaver in Oregon here. As an additional question to Matt's. Do any of you have a problem with your E&O provider if you do not have a Limit of Liability in your contract? Is your E7O really expensive? I pay a $1000.00 or so now.
    No problem. $1000 is a fairly low price. Who is it with and what are the coverage amounts?

    Scott Patterson, ACI
    Spring Hill, TN
    www.traceinspections.com

  11. #11
    Ted Menelly's Avatar
    Ted Menelly Guest

    Default Re: Limitation of Liability in your state

    Quote Originally Posted by Scott Patterson View Post
    No problem. $1000 is a fairly low price. Who is it with and what are the coverage amounts?

    1,000.00 for 100,000.00 and 2,500 liability


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