LAW OFFICE OF PAUL DEPETRIS
paul@newjerseylemon.com
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New Jersey Home Inspector Fraud Facts

INTRODUCTION
Read below to learn more about this topic. Or, to receive a no cost phone consultation, call Mr. DePetris at 609-714-2020 or send him an email. Warning – this article does not necessarily include every New Jersey court rule, code or law that may apply to your New Jersey case! The Law Office of Paul DePetris does not guarantee that the statutes, rules, codes, files or forms on this website are the latest versions, that they lack typographical errors or that they have not changed, repealed or superseded by other laws. Before taking any action, read all applicable federal and state source law and case law and consult with an attorney. Court addresses, hours of operation, deadlines and directions may change so check with the court in advance of mailing documents to court or going there! Some of the webpages on this site don’t apply to all types of New Jersey cases, since there are different rules for different case types!

NEW JERSEY HOME INSPECTOR FRAUD LAWSUIT FACTS

WHAT IS A NEW JERSEY HOME INSPECTION?
A New Jersey home inspection is an inspection of a New Jersey home’s structure and components to find problems, issues and items that require repair or that could be unsafe. The New Jersey home inspector is usually hired by a New Jersey home buyer before the New Jersey home buyer actually completes the purchase of the New Jersey home. The New Jersey home inspector visits the New Jersey home that is being sold to a New Jersey buyer and usually takes notes during the New Jersey home inspection. After completing the New Jersey home inspection, the New Jersey home inspector writes a New Jersey home inspection report. If the New Jersey home inspector found a problem, issue or item that needs repair at the New Jersey home or that could be unsafe, the New Jersey home inspector usually describes each such problem, issue or item in the will include a description of the problem in New Jersey home inspection report. Often, the New Jersey home inspection report suggests more detailed investigation by the New Jersey home buyer or even possible repairs to the New Jersey home. Sometimes, New Jersey home inspection reports lead to a New Jersey home sale being cancelled because of the New Jersey home’s defects or poor state of repair. Other times, New Jersey home inspection reports lead to a New Jersey home buyer requesting credits from the New Jersey home seller so that the New Jersey home buyer can make repairs to the New Jersey home.

WHY ARE RELIABLE NEW JERSEY HOME INSPECTION REPORTS SO IMPORTANT?
• For most New Jersey home buyers the purchase of a New Jersey home is the greatest single purchase of their lifetime.
• The cost of homes in New Jersey is substantial.
• The purchase of a New Jersey home is, for most New Jersey home buyers, a very infrequent occurrence, and a very major undertaking.
• People may buy a New Jersey home once in a lifetime, or not very often.
• New Jersey home inspectors, on the other hand, usually conduct a volume operation.
• The impact upon the New Jersey home buyer upon receiving an inaccurate New Jersey home inspection report can be indeed monumental, considering issues such as habitability, health and safety, and financing obligations.
• The New Jersey home inspection report is supposed to serve as a reliable evaluation of a New Jersey home’s fitness for purchase.
• What a New Jersey home buyer using New Jersey home inspection services would generally and reasonably expect is an inspection and report which forthrightly discloses physical conditions of a New Jersey house which could reasonably affect the health, safety and welfare of its occupants.
• The New Jersey home inspector’s report should reveal and report conditions which may, presently or in the reasonably foreseeable future, cause the New Jersey home buyer substantial inconvenience or require costly repairs or maintenance expense.
• The very purpose of a New Jersey home inspection is to give a New Jersey home buyer a rational basis upon which to decline to enter into a New Jersey home contract to purchase the New Jersey home.
• New Jersey home inspectors are not required to have an engineering degree or any particular level of experience in the construction industry or in New Jersey home municipal code compliance.

WHAT IS A NEW JERSEY HOME INSPECTION FRAUD LAWSUIT?
A New Jersey home inspection fraud lawsuit is normally a New Jersey lawsuit filed by a New Jersey homeowner against a New Jersey home inspector for committing fraud when selling New Jersey home inspection services or when performing a New Jersey home inspection.

WHAT IS NEW JERSEY HOME INSPECTOR FRAUD?
Every New Jersey home inspector fraud essentially consists of one party obtaining an unfair advantage by some act or omission that is unconscientious or a violation of good faith. There are different types of New Jersey home inspector fraud. Two of the most common types of New Jersey home inspector fraud are New Jersey common law home inspector fraud and New Jersey consumer fraud and these are the types of New Jersey home inspector fraud discussed in this article.

WHAT IS NEW JERSEY COMMON LAW HOME INSPECTOR FRAUD?
New Jersey common law home inspector fraud is a term for the type of New Jersey home inspector fraud that New Jersey Courts have recognized over time in the courts’ written decisions called “case law. New Jersey common law home inspector fraud occurs when a person:
• represents a past or present fact as true when it is in fact false;
• with the intent to deceive the victim to whom the representation is made;
• the New Jersey home inspector fraud victim believes the representation to be true and acts or refrains from acting in justifiable reliance upon the representation; and
• the New Jersey home inspector fraud victim suffers damage as a result of the other person’s misconduct.

HOW DO I PROVE NEW JERSEY COMMON LAW FRAUD IN A NEW JERSEY HOME INSPECTION FRAUD LAWSUIT?
Under New Jersey common law, there are two types of New Jersey common law fraud: New Jersey equitable fraud and New Jersey legal fraud. To prove a New Jersey home inspection fraud lawsuit for New Jersey common law equitable fraud, a New Jersey Consumer fraud home inspection victim must show the following:

• a material misrepresentation of a presently existing or past fact;
• made with the intent that a New Jersey Consumer fraud home inspection victim rely upon it; and
• detrimental reliance by a New Jersey Consumer fraud home inspection victim.

Even an innocent misrepresentation can constitute New Jersey equitable fraud justifying rescission of a New Jersey home inspection contract. But the only remedy available for New Jersey equitable fraud is equitable in nature: rescission or reformation of the New Jersey home inspection contract.

To prove a New Jersey home inspection fraud lawsuit for New Jersey common law legal fraud, a New Jersey home inspection fraud victim must show the following:
• a material misrepresentation of a presently existing or past fact;
• knowledge or belief by a New Jersey home inspector of its falsity;
• made with the intent to mislead the New Jersey home inspection fraud victim;
• that such misrepresentation was justifiably relied upon by a New Jersey home inspection fraud victim; and
• that a New Jersey home inspection fraud victim sustained damages therfrom.

WHAT IS EQUITABLE NEW JERSEY HOME INSPECTOR FRAUD?
Equitable New Jersey home inspector fraud is different from legal New Jersey home inspector fraud because the victim of the New Jersey home inspector fraud seeks equitable relief -- relief originating in the doctrine of fairness rather than merely seeking to recover money for misconduct. Equitable New Jersey home inspector fraud occurs when a person:
• represents a past or present fact as true when it is in fact false;
• the New Jersey home inspector fraud victim believes the representation to be true and acts or refrains from acting in justifiable reliance upon the representation; and
• the New Jersey home inspector fraud victim suffers damage as a result of the other person’s misconduct.

WHAT IS NEW JERSEY CONSUMER FRAUD?
Often, a person has the right to rely on representations made by a seller of certain goods or services. New Jersey Consumer Fraud Act prohibits certain sellers of goods and services from committing certain types of conduct. There are three possible ways for a seller of goods or services who is subject to the restrictions of the New Jersey Consumer Fraud Act to violate the New Jersey Consumer Fraud Act. The first type of New Jersey Consumer Fraud Act violation involves affirmative acts – something that a person does voluntarily. Affirmative acts do not have to be physical acts, since they can also be any steps taken voluntarily by the person to advance a plan or design or to accomplish a purpose. Under the New Jersey Consumer Fraud Act, it is unlawful for certain sellers of goods or services to engage in any of the following type of affirmative acts:
• unconscionable commercial practice -- an activity in the public marketplace, which is basically unfair or unjust, which materially departs from standards of good faith, honesty in fact and fair dealing.
• deception – conduct or an advertisement which is misleading to an average consumer to the extent that it is capable of and likely to, mislead an average consumer. It does not matter that, at a later time, it could have been explained to a more knowledgeable and inquisitive consumer, nor need the conduct or advertisement actually have misled the consumer. It is not important that the seller may have acted in good faith. Instead, it is the capacity to mislead that is important.
• New Jersey home inspector fraud -- a perversion of the truth, a misstatement or a falsehood communicated to another person and creating the possibility that that other person will be cheated.
• false pretense -- an untruth knowingly expressed by a wrongdoer.
• false promise -- an untrue commitment or pledge, communicated to another person, to create the possibility that that other person will be misled.
• misrepresentation -- a statement made to deceive or mislead. An untrue statement, made about a fact which is important or significant to a sale or advertisement and which is communicated to another person to create the possibility that the other person will be misled.

The second type of New Jersey Consumer Fraud Act violation involves acts of omission – a failure to do something that the law requires be done. Omissions that violate the New Jersey Consumer Fraud Act consist of any of the following:
• knowing concealment of any material fact.
• suppression of any material fact.
• omission of any material fact.
The third type of New Jersey Consumer Fraud Act violation is the violation of a law passed by the New Jersey Legislature or the violation of a regulation adopted by the New Jersey Division of Consumer Affairs. These laws and regulations prohibit certain sellers of goods or services from performing certain kinds of conduct.

The New Jersey Consumer Fraud Act and the common law interpreting it include the following definitions:
• Person -- a human being or his or her legal representative, as well as a partnership, corporation, company, trust, business entity, association as well as his or her agent, employee, salesperson, partner, officer, director, member, stockholder, associate, trustee or beneficiary of a trust.
• Sale -- the transfer of ownership; rental; distribution; offer to sell, rent, or distribute and attempt to sell, rent or distribute, either directly or indirectly.
• Advertisement -- a notice designed to attract public attention. Advertisements may include the following modes of communication -- the attempt, directly or indirectly, by publication, dissemination, solicitation, endorsement, circulation or in any way to induce any person to enter or not enter into an obligation, acquire any title or interest in any merchandise, increase the consumption of any merchandise or make any loan.
• Merchandise -- objects, wares, goods, commodities, services or anything offered directly or indirectly to the public for sale. However, it is important to note that certain types of goods and services are not regulated by the New Jersey Consumer Fraud Act.
• Real estate -- land and if there is a building on it, that building as well.
• Knowingly – awareness that conduct is of a nature that it is practically certain that the conduct will cause a particular result. Therefore, a person acts with knowledge, consciously, intelligently, willfully or intentionally.
• Conceal -- to hide, secrete or withhold something from the knowledge of others or to hide from observation, cover or keep from sight or to prevent discovery of something.
• Concealment – withholding of something which one is bound or has a duty to reveal so that the one entitled to be informed remains ignorant.
• Suppress – to end a thing actually existing, to prohibit or put down or to prevent, subdue or forcibly end something. Suppression is the conscious effort to control or conceal unacceptable impulses, thought, feelings or acts.
• Purposely -- the actor’s conscious object to engage in conduct that is of a certain nature or causes a particular result and the actor is aware of hopes or believes that the attendant circumstances exist.
• Intent -- a design, resolve or determination with which a person acts. It only refers to the state of mind existing when an act is done or omitted.

EXAMPLES OF NEW JERSEY HOME INSPECTION CONSUMER FRAUD CASES
• First time New Jersey home purchasers sued New Jersey home inspection company for alleged New Jersey Consumer Fraud Act violations.
• New Jersey Consumer Fraud case brought against New Jersey home inspection company which performed an inspection of a New Jersey home before its purchase.
• New Jersey home buyers sued New Jersey home inspector for New Jersey consumer fraud associated with New Jersey septic system inspection.
• New Jersey home purchasers brought New Jersey Consumer Fraud Act case against New Jersey builder, manufacturer of exterior siding, New Jersey subcontractor that installed siding and a New Jersey home inspector.

NEW JERSEY CONSUMER FRAUD HOME INSPECTION AFFIRMATIVE ACT VIOLATIONS
The first type of New Jersey Consumer Fraud Act violation involves affirmative acts – something that New Jersey home inspectors do voluntarily. Affirmative acts do not have to be physical acts, since they can also be any steps taken voluntarily by the New Jersey home inspectors to advance a plan or design or to accomplish a purpose. Under the New Jersey Consumer Fraud Act, it is unlawful for certain New Jersey home inspectors to engage in any of the following type of affirmative acts:
• unconscionable commercial practice -- an activity in the public marketplace, which is basically unfair or unjust, which materially departs from standards of good faith, honesty in fact and fair dealing.
• deception – conduct or an advertisement which is misleading to an average consumer to the extent that it is capable of and likely to, mislead an average consumer. It does not matter that, at a later time, it could have been explained to a more knowledgeable and inquisitive consumer, nor need the conduct or advertisement actually have misled the consumer. It is not important that the seller may have acted in good faith. Instead, it is the capacity to mislead that is important.
• fraud -- a perversion of the truth, a misstatement or a falsehood communicated to another person and creating the possibility that that other person will be cheated.
• false pretense -- an untruth knowingly expressed by a wrongdoer.
• false promise -- an untrue commitment or pledge, communicated to another person, to create the possibility that that other person will be misled.
• misrepresentation -- a statement made to deceive or mislead. An untrue statement, made about a fact which is important or significant to a sale or advertisement and which is communicated to another person to create the possibility that the other person will be misled.

NEW JERSEY CONSUMER FRAUD HOME INSPECTION KNOWING OMISSION VIOLATIONS
The second type of New Jersey Consumer Fraud Act violation involves acts of omission – New Jersey home inspectors’ failure to do something that the law requires be done. Omissions that violate the New Jersey Consumer Fraud Act consist of any of the following:
• knowing concealment of any material fact.
• suppression of any material fact.
• omission of any material fact.

DOES THE NEW JERSEY CONSUMER FRAUD ACT APPLY TO ORAL NEW JERSEY HOME INSPECTION CONTRACTS?
• You don’t always need a written contract to have a New Jersey Consumer Fraud Act case.
• The New Jersey Consumer Fraud Act applies equally to both oral misrepresentations & written ones.
• Privity of contract = having a New Jersey home inspection contract with someone else.
• Privity of contract is not a prerequisite to New Jersey Consumer Fraud Act standing.
• If representations are made in connection with the New Jersey sale of merchandise, indirect promises are actionable.
• Parties may conclude a New Jersey home inspection contract for the New Jersey sale of goods notwithstanding whether they agreed upon a price.
• The absence of privity of contract no longer bars a buyer from reaching through the chain of distribution to a product’s manufacturer.
• But not every erroneous statement is an affirmative misrepresentation prohibited by the New Jersey Consumer Fraud Act.
• To constitute an affirmative misrepresentation, the statement must be:
o a statement of fact made contemporaneously with the formation of the bargain;
o material to the transaction;
o made to induce the New Jersey buyer to make the New Jersey purchase; and
o found to be false.
• The New Jersey Consumer Fraud Act claimant does not have to receive the misrepresentation to have standing.
• If the misrepresentation is made to someone acting as the New Jersey consumer’s agent & the agent was thereby induced into entering into a New Jersey home inspection contract with the merchant, the New Jersey consumer has standing to bring a New Jersey Consumer Fraud Act claim.
• But absence of a New Jersey home inspection contract may affect a New Jersey party’s amount of New Jersey Consumer Fraud Act damages.

IF I AM A NEW JERSEY VICTIM OF NEW JERSEY CONSUMER FRAUD IN A NEW JERSEY HOME INSPECTION CONTRACT SITUATION, CAN I DO ANYTHING ABOUT IT?
The following are some of the remedies available to New Jersey consumer fraud victims:
• Cancellation or New Jersey fraudulent debts.
• New Jersey Consumer Fraud treble damages for New Jersey ascertainable loss of money or property caused by the New Jersey Consumer Fraud Act Violation.
• New Jersey attorney’s fee award for prosecuting the New Jersey Consumer Fraud Act Violation or defending against lawsuits by contractors to collect a fraudulent debt.
• New Jersey Consumer Fraud refund of money lost due to the home inspection’s New Jersey Consumer Fraud Act Violation.

Whenever there is a fraud in the execution or consideration of a New Jersey home inspection contract, the New Jersey home inspection fraud victim defrauded at any time thereafter may institute a New Jersey lawsuit to recover the money owing on such New Jersey home inspection contract although, by its terms, the debt contracted or the money secured to be paid thereby is not then due or payable; and the New Jersey fraud victim may, upon discovery of the fraud, either rescind the New Jersey home inspection contract entirely and recover the money or property obtained by the fraud, or, sue on the New Jersey home inspection contract to recover thereon.

In certain situations, a New Jersey home buyer could assert that, since the New Jersey home inspection contract was the product of fraud, a New Jersey home buyer is entitled to rescind the New Jersey home inspection contract and/or to recover the money and/or lien on property obtained under same.

New Jersey home inspection contract rescission is the equivalent of New Jersey home inspection contract cancellation. It is an equitable remedy which is only available in limited circumstances. Aside from situations where parties consent to New Jersey home inspection contract rescission, New Jersey home inspection contracts may normally only be rescinded where there is either original invalidity, fraud, failure of consideration, a material breach or default. Even where grounds for New Jersey home inspection contract rescission exist, the remedy is discretionary in nature. New Jersey home inspection contract rescission will not be granted where the party seeking same has not acted within a reasonable time or where substantial performance has already occurred. Indeed, delay in the rescission of a New Jersey home inspection contract is evidence of an election to treat a New Jersey home inspection contract as valid. However, the duty to rescind a New Jersey home inspection contract does not first arise until the party seeking New Jersey home inspection contract rescission discovers the grounds for same. To grant New Jersey home inspection contract rescission, a New Jersey court must be able to return the parties to their position before they entered into the New Jersey home inspection contract. Accordingly, a party cannot usually simply rescind a New Jersey home inspection contract and at the same time keep possession of goods or services received under the New Jersey home inspection contract. To complete a New Jersey home inspection contract rescission following partial performance, the party seeking to rescind the New Jersey home inspection contract must return or tender the consideration previously received. New Jersey home inspection contracts are subject to rescission where they are obtained by fraud. Indeed, the very existence of a fraudulently procured New Jersey home inspection contract causes damage, so that where fraud is found, damage may be presumed. In the absence of actual fraud, undue influence or misrepresentation, New Jersey home inspection contract rescission will not be permitted.

A unilateral mistake of a fact unknown to the other party to a New Jersey home inspection contract is not ordinarily grounds for New Jersey home inspection contract rescission. To qualify for such relief, a party must show special circumstances justifying a departure from the generally controlling principle that parties are bound by the New Jersey home inspection contracts they make for themselves. Accordingly, the circumstances providing for New Jersey home inspection contract rescission due to a unilateral mistake fact are: [1] the mistake is of such a great consequence that to enforce the New Jersey home inspection contract as actually made would be unconscionable; [2] the matter as to which the mistake was made must relate to the material feature of the New Jersey home inspection contract; the mistake must have occurred notwithstanding the exercise of reasonable care by the party making the mistake; and [4] the requested New Jersey home inspection contract rescission cannot cause serious prejudice to the other party, except for loss of bargain.

WHEN IS A NEW JERSEY HOME INSPECTION CONTRACT INVALID BECAUSE IT WAS ENTERED INTO THROUGH FRAUD?
In the absence of a trust or confidential relationship, statements of opinion or matters of judgment, though known to be false when actually made, do not constitute New Jersey fraud. However, false representations as to material elements of the New Jersey home inspection contract are grounds for rescission. Fraudulent misconduct is not excused by the credulity or negligence of the New Jersey Consumer Fraud victim or by the fact that the New Jersey Consumer Fraud victim might have discovered the New Jersey Consumer Fraud through prior investigation.

Purposeful concealment can be as destructive as an affirmative false statement. There exists a duty upon a New Jersey party to a New Jersey home inspection contract to disclose to the other New Jersey party facts basic to the transaction if the first party knows that the other is about to enter into the transaction under a mistake as to the facts and that the other, because of the relationship between the parties, the customs of the trade or other objective circumstances, would reasonably expect disclosure of the facts. Where such a duty to speak exists, the failure to speak constitutes unfair conduct likely to cause harm. An unconscionable bargain is one such as no person in their senses and not under delusion would make and as no honest and fair person would accept.

ARE NEW JERSEY ATTORNEY’S FEE AWARDS AVAILABLE TO A SUCCESFUL NEW JERSEY CONSUMER FRAUD HOME INSPECTION VICTIM?
If the New Jersey court award damages to a New Jersey Consumer fraud home inspection victim, the New Jersey Consumer Fraud Act also requires the New Jersey court to compel the New Jersey Consumer Fraud defendant to pay whatever reasonable attorney’s fees that the New Jersey Consumer fraud home inspection victim incurred in the New Jersey Consumer Fraud Act case. Only a New Jersey judge decides the proper amount of a New Jersey Consumer Fraud attorney’s fee award.

WHAT TYPE OF DAMAGES CAN A SUCCESFUL NEW JERSEY CONSUMER FRAUD HOME INSPECTION VICTIM RECOVER AND HOW DOES A NEW JERSEY HOME BUYER PROVE THEY SUFFERED DAMAGES UNDER THE NEW JERSEY CONSUMER FRAUD ACT?
New Jersey Consumer Fraud triple damages, also called New Jersey Consumer Fraud treble damages, are available to certain New Jersey Consumer fraud home inspection victims. The tripling of the New Jersey Consumer Fraud award is meant to punish the New Jersey Consumer Fraud defendant. To win New Jersey Consumer Fraud triple damages under the New Jersey Consumer Fraud Act, a New Jersey Consumer fraud home inspection victim must prove that the New Jersey Consumer fraud home inspection victim lost money or property as a result of the New Jersey Consumer Fraud defendant’s New Jersey Consumer Fraud Act violation. The New Jersey Consumer fraud home inspection victim is allowed to receive an award of money for the New Jersey Consumer fraud home inspection victim’s Consumer Fraud loss proximately caused by the New Jersey Consumer Fraud defendant. If the New Jersey court finds that the New Jersey Consumer Fraud Act was violated and the New Jersey court awards New Jersey Consumer Fraud damages, the New Jersey Consumer Fraud Act requires the New Jersey court to triple whatever amount of damages that the New Jersey court awards to the New Jersey Consumer fraud home inspection victim.

NEW JERSEY HOME INSPECTION CONTRACT LIMITATION OF LIABILITY CLAUSES
• Many New Jersey home inspection contracts contain a limitation of liability clause under which the New Jersey home owner is allegedly only entitled to a refund of the New Jersey inspection fee.
• If, upon the occasional dereliction, the New Jersey home inspector’s only consequence is the obligation to refund a few hundred dollars, there is no meaningful incentive to act diligently in the performance of New Jersey home inspection contracts.
• As a businessperson who possesses knowledge about and experience in the industry, New Jersey home inspectors are aware of the cost of repairing major New Jersey home defects. In fact, that is a major selling point of a New Jersey home inspector’s service to New Jersey home buyers.
• New Jersey home inspector limitation of liability clauses will not necessarily hold up to protect a New Jersey home inspector in a New Jersey home inspector arbitration or New Jersey home inspector lawsuit. For example, New Jersey home inspector limitation of liability clauses may be unconscionable as a matter of law by unfairly attempting to defeat the New Jersey homeowners’ right to relief against the New Jersey home inspector.

NEW JERSEY HOME INSPECTION CONTRACT ARBITRATION CLAUSES
• Many New Jersey home inspection contracts contain mandatory New Jersey home inspection contract arbitration clauses under which the New Jersey homeowners and the New Jersey home inspector agree not to sue one another if they have a dispute but instead, to resolve their disputes through New Jersey arbitration conducted outside the New Jersey court system.
• New Jersey Arbitration clauses substitute the New Jersey arbitration process for the New Jersey court system.
• New Jersey courts are strongly committed to arbitration and agreements requiring the arbitration of disputes.
• If the New Jersey homeowner’s home inspection contract contains such a mandatory arbitration clause, a New Jersey homeowner’s claim against a New Jersey home inspector may have to be arbitrated instead of being handled by New Jersey courts.
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