Home Inspection Companies Can Be Sued Under the New Jersey Consumer Fraud Act

HNWReal Estate, Landlord/Tenant, and Zoning

  • Home inspectors have not historically been recognized as “learned professionals”, as that term is defined under the law.
  • The Consumer Fraud Act applies to the activities of licensed home inspectors.

Home inspection In a recent case a homeowner contracted to purchase a residential home property.  Prior to purchasing the home, plaintiffs hired an inspector coming to conduct an inspection of the property.

The inspectors report concluded that “this structure appears to be very well built utilizing quality materials and professional workmanship.  It is in need of only typical maintenance and upgrading.”   Plaintiffs proceeded with the purchase of the property, allegedly in reliance upon defendant’s report.  Homeowner’s allege that “upon occupying the property they quickly learned that the house was in fact in poor condition, requiring a great deal of major repairs.”  These allegedly required repairs include: “replacement of the roof that leaked and was at the end of its useful life, the repair of their front deck/porch which collapsed when they moved in, the replacement of the driveway and replacement of windows and sliding glass doors to address leaks, drafts and rot from the leaks.”

The trial court dismissed the claims under the Consumer Fraud Act stating “there is no binding authority specifically addressing whether home inspectors should be considered semi-professionals exempt from the Consumer Fraud Act.

The narrow issue before the Court was whether semi-professionals such as home inspectors should be deemed to be learned professionals.   A “learned professional” under New Jersey law is exempt from liability under the Consumer Fraud Act, which is a statute that is enforced by the Attorney General’s Division of Consumer Affairs.

The Appellate Court concluded that the judicially created learned professional exception protects only those professionals who have historically been recognized as “learned” based on the requirement of extensive learning or education.   To the extent prior decisions, that applied the learned professional exception to “semi-professionals” regulated by a separate regulatory scheme, was reversed, including home inspectors.

To discuss your NJ real estate matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at fniemann@hnlawfirm.com.  Please ask us about our video conferencing consultations if you are unable to come to our office.

By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold Township, Monmouth County, NJ Real Estate Attorney

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