Negligence of House Inspector: Licensee’s Liability #140
CATEGORY: Legally Speaking
TAGS: Home Inspection Independent Contractor Liability Negligence Property Purchase Tax Exemption Recreational Property
By Gerry Neely
The answer to this question was given in a 1977 case in which a purchaser was concerned about the soundness of the structure and foundations of an old house he wanted to purchase. A salesman employed by the agency which had the listing, recommended to the purchaser a house inspector who was a contractor working for the agency to supervise condominiums. The contractor had made hundreds of inspections, some of which were of residential property.
A clean bill of health was given as a result of the inspection. Either the inspector examined the wrong house, or he had a bad day. It became apparent after the purchaser took possession that two bearing walls were rotten and that they, together with the kitchen subfloor, had to be removed because the supports under it were also rotten. This condition of rot was readily visible to everyone but the inspector.
A claim of negligence was made against the agent because its salesman had recommended the inspector. However the contractor had a good reputation, and as an efficient and experienced contractor, was thought to possess an expert knowledge in this area of construction. The salesman had relied upon this reputation. The negligence arose from the manner in which the inspection was carried out. The Court decided that the agent was not negligent for its salesman's recommendation of a man of good reputation who in this instance, erred. The contractor of course was liable for his negligence.
The Judge commented that as the employer of the contractor/house inspector, the agent might have been liable for his negligence if the purchaser's lawyer had made that claim against the agent. This potential liability is avoided if the house inspector is an independent contractor.1
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Not all transfers of a principal residence or a recreational residence to a related individual are exempt from Property Purchase Tax. What may be overlooked is that to qualify for the exemption, the parcel of land upon which the principal residence sits cannot exceed 2.03 hectares in area, and the improvements upon it cannot be designed or used to accommodate more than three families. A recreational residence is exempt only if its fair market value does not exceed $200,000 and its area does not exceed 5 hectares.
|Edstrand v. Crest Realty Ltd. and Jackson,SC 2 B.C.L.R. 188.
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