The Brand-New Home Inspection Act 2017

Help for Home Buyers

The key part of the Home Inspection Act 2017 is the regulation of home inspectors. Given that just about everything else in Ontario society is regulated by the government, you might not have realized that this wasn’t true for home inspections. Prior to this legislation, anyone could go into business as a home inspector. Even savvy home purchasers doing due diligence had no way of knowing the professionalism of the person they had hired, or the reliability of the inspection report they paid for.

The Home Inspection Act 2017 is included in Bill 59, The Putting Consumers First Act; while this bill in itself is of value to Ontario residents, it’s the Home Inspection Act 2017 with which we’re concerned right now.

Key aspects of the Home Inspection Act 2017

Although the law was passed in November, 2016, it didn’t take effect until May, just prior to the current summer. The main “take away” for buyers is that home inspectors now must be licensed, which involves education and training and should result in a higher degree of professionalism. As well, they will be required to follow a code of ethics and will be subject to fines for violations. In turn, this requires establishing a regulatory council to oversee the new legislation and home inspectors.

The legislation shows that the government is serious; below is some of the wording from the part of the Act with regards to who can designate themselves as a Home Inspector:

1. No person shall perform a home inspection without a license.
2. No person shall, through an entity or otherwise…take or use the designation “Licensed Home Inspector”…or otherwise hold himself or herself out as a Licensed Home Inspector.
3. A person who contravenes subsection (1) or (2) is guilty of an offense and on conviction is liable to a fine of not more than $10,000 for each day or part of a day on which the offense occurs or continues.

“This should give purchasers confidence that the home inspector they hire will be qualified, bona-fide and certified by the Ontario government.”

Additional protection for the home buyer

Home buyers and home inspectors will sign a contract which sets out the terms and provides for a written, signed inspection report. Also, home inspectors must now carry insurance, which will give homeowners recourse to financial compensation: should the inspector make a costly error in the inspection, the homeowner can sue for damages. The government is insisting that the contract lists the details of the inspector’s insurance coverage. This, however, is opposed by current home inspection organizations which argue that it isn’t necessary and worse, will likely result in frivolous claims driving up the cost of their service to the home purchaser. Regardless of this issue’s outcome, additional consumer protection will indeed be provided by a dually signed contract.

Keep in mind, however, that the actual regulations haven’t yet come into force. They are likely being written presently. Although the act came into being in May, it contains what might be termed the broad directives. The actual regulations which govern all of the specifics still need to be worked out and any issues resolved. This is why, for example, we know that home inspectors will have to maintain insurance, but we don’t know such details as whether or not it will be listed in the contract.

The Home Inspection Act should benefit both seller and buyer

Ultimately, the legislation provides the home purchaser with a professional report, but it’s up to us to read it carefully and then take an appropriate course of action. For example, a report says the home you want to purchase has foundation cracks: what does that mean for you? In a worse-case scenario, if you buy the house, do you have the additional funds to make the repair? Do you want to negotiate with the seller to obtain a lower price? Perhaps you just want to “walk away?” The Home Inspection Act should benefit both seller and buyer once it’s fully enacted, but it isn’t a replacement for a lawyer to oversee what is for many of us, the most important financial transaction we will make.

Accordingly, whether you’re buying or selling, or for any other real estate concerns, please call our office for a complimentary consultation. We are conveniently located in the Toronto area and can be reached at Howard Nightingale Professional Corporation, 416 633 4423 (toll free 1 -877-224-8225), or begin with a visit to our website, www.howardnightingale.com.

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