Bill H.245: Chapter 93 of the General Laws (Amended)

Below is our summary of significant legislative development that impacts our industry. The Massachusetts General Court has introduced a bill titled “An Act protecting consumer rights in purchasing safe and habitable homes.” This bill, presented by Representative Brian M. Ashe and others, aims to enhance consumer protection by ensuring that buyers have the right to conduct home inspections when purchasing residential properties. Below, I have provided a detailed summary of the key provisions and implications of this bill for real estate professionals.

KEY POINTS

The bill aims to ensure that buyers have the right to home inspections when purchasing residential properties, including houses and condominiums.

An inspection involves a licensed home inspector evaluating various components of the property, such as heating, cooling, plumbing, electrical systems, structural components, foundation, roof, and more.

• Buyers have the right to have the property inspected within 10 days of the seller accepting their offer, unless a different period is agreed upon in writing.

• Sellers cannot condition the acceptance of an offer on the buyer waiving their right to an inspection, except in certain cases like auctions or sales to close family members.

Every offer to purchase must include a clause informing the buyer of their right to an inspection and the conditions under which they can revoke the offer if significant defects are found.

• Sellers must comply with the inspection rights and cannot accept offers that waive these rights unless specific exceptions apply.

• Violations by sellers can result in damages to the buyer and civil penalties.

An inspection involves a licensed home inspector evaluating various components of the property, such as heating, cooling, plumbing, electrical systems, structural components, foundation, roof, and more.

This bill is designed to protect consumers by ensuring they have the opportunity to identify any significant issues with a property before finalizing the purchase.

Implications:

The legislation has several implications for for real estate agents, brokers and Realtors:

• Real estate agents must ensure that all offers to purchase include the required language informing buyers of their right to a home inspection.

• Agents must be aware of the 10-day inspection period (or longer if agreed upon) and ensure that this is communicated clearly to both buyers and sellers.

• Agents cannot advise or encourage sellers to condition the acceptance of an offer on the buyer waiving their right to an inspection, except in specific cases like auctions or sales to close family members.

• They must ensure that sellers do not accept offers from buyers who indicate an intention to waive the inspection right, unless the exceptions apply.

• If a seller violates the provisions of this bill, the real estate agent could be implicated in any resulting legal actions or penalties. This includes potential civil penalties and damages to the buyer.

• Agents need to stay informed about the legal requirements and ensure their practices comply with the new regulations to avoid liability.

• The bill enhances consumer protection, which may increase buyer confidence in the real estate market. Agents can use this as a selling point to assure buyers that their rights are protected.

• Agents should be prepared to guide buyers through the inspection process and help them understand their rights and options if significant defects are found.

Overall, real estate professionals will need to adapt their practices to ensure full compliance with the new regulations, prioritize transparency, and protect the interests of their clients. This may involve additional training and adjustments to standard operating procedures.

Statutory Offer to Purchase Language

According to the bill each offer to purchase a residential structure or residential condominium unit shall include the following language:

“Buyer is entitled under section 115 of chapter 93 of the General 33 Laws to choose to have the premises inspected at Buyer’s expense within 10 days, or longer as Seller and Buyer may agree in writing, of Seller’s acceptance of Buyer’s offer to purchase. Unless one of the exceptions in said section 115 applies, neither Seller nor Buyer may make acceptance of this offer to purchase contingent upon waiver, limitation or restriction of Buyer’s right to choose to obtain a home inspection. Should Buyer choose to have the premises inspected, if it is the inspector’s opinion that the premises contain serious structural, mechanical or other defects and if the repair of such defects would cost Buyer in the aggregate more than the amount indicated by the Buyer herein ($________), then Buyer shall have the option of revoking this offer to purchase by written notice to the Seller or Seller’s agent within 5 business days of the date of the inspection, or longer as Seller and Buyer may agree in writing. Such notice shall be accompanied by a copy of the inspector’s opinion and a copy of cost estimates obtained by Buyer.”

Understanding and complying with this new legislation is crucial for all real estate professionals. By staying informed and adapting practices, we can better serve our clients and uphold the integrity of our industry. If you have any questions or need further clarification on this bill, please do not hesitate to reach out to one of our Real Estate Attorneys.