Thanks to the strong advocacy of the HBRAMA, new home construction is exempt from regulations adopted by the Executive Office of Housing and Livable Communities (EOHLC) prohibiting the waiver of the right to a home inspection prior to the acceptance of an offer to purchase. The new regulations, which became effective for sales of residential properties on or after October 15, seek to protect a homebuyer’s rights to a home inspection. It prohibits sellers or their agents from selling a home on the condition that a buyer waive an inspection. The regulations also prevent a seller from accepting an offer if the seller is informed in advance that the buyer intends to waive their right to an inspection.
The regulations were promulgated by EOHLC pursuant to a provision in the Affordable Homes Act. It was passed by the Legislature to address the phenomenon of prospective buyers waiving a home inspection to make their offers more attractive. That, of course, was due to the lack of inventory of single-family homes for sale.
The regulations confirm that a buyer may choose not to conduct an inspection, as long as the decision is not influenced by the seller or their agent, and prohibits contract terms that decrease the effectiveness of inspections, while still permitting reasonable, negotiated terms (e.g., repair cost thresholds or return of deposit).
The regulations require sellers to provide a separate written disclosure informing buyers that acceptance of their offer is not contingent upon the waiver of a home inspection and that the buyer may choose to have the home inspected. EOHLC has developed a standard disclosure form. The failure to provide the required disclosure is considered a violation of the consumer protection act.
Following the publication of the initial draft regulations, several key changes were included in the final version to incorporate feedback from stakeholders, including the HBRAMA. At the request of the HBRAMA, the final regulations include a limited exemption for pre-sales of newly constructed homes provided the purchase contract is signed before substantial completion and the seller offers at minimum a one-year express written warranty. This exemption supports continued housing development by helping builders secure additional financing to produce more units without delay.
A copy of the regulations can be found at: https://www.mass.gov/doc/760-cmr-74-residential-home-inspection-waivers/download