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Officials in Massachusetts have passed a new state policy prohibiting homesellers and their agents from pressuring or requiring buyers to waive a home inspection as a contingency of buying their property.
The new policy was signed into law by Governor Maura Healey during the first week in June and is included in the state’s larger Affordable Homes Act, the Executive Office of Housing and Livable Communities (EOHLC) announced on June 6. The law will apply to home sales after Oct. 15, 2025.
The policy also stipulates that sellers may not accept an offer if they are informed in advance that the buyer plans to waive their right to an inspection. Still, buyers may choose to not get a home inspection if they wish, but sellers must provide a written disclosure affirming the buyer’s right to an inspection.
“A home inspection is an important step in buying a property,” Executive Office of Housing and Livable Communities Secretary Ed Augustus said in a statement.
“Homebuyers must have the ability to make informed financial decisions and be given a clear picture of needed repairs or safety issues that could arise,” he added. “This new regulation creates a fairer, more even playing field for buyers and sellers, and HLC is proud to implement yet another smart policy from the historic Affordable Homes Act.”
The new regulation is a sharp rebuke to the pandemic-era days of buyers waiving their right to a home inspection all too readily, simply for the chance to have their offer considered by a seller.
Bidding wars and waived contingencies that hit a peak around 2020-2021 as buyers were fighting for a chance at scant inventory amidst record-low mortgage rates had some taking measures like “walk-through” or “walk-and-talk inspections” rather than no inspection at all. Although such inspections cannot replace a full home inspection, these abbreviated inspections could at least help buyers uncover major issues in a home before they purchase it.
Errors and omissions lawsuits against real estate professionals saw a substantial increase in 2022, according to a report from underwriting firm Victor Insurance Managers, and likely correlated with increased waived inspection contingencies. The amount in damages that losing agents in these lawsuits were liable for also ballooned 13 percent higher than the previous year to an average of $39,000.
After a draft home inspection regulation was published by the EOHLC, the office welcomed public comments on the policy in May, and received more than 100 submissions.
In response to feedback, the EOHLC pushed the implementation date to October so that real estate industry professionals would have time to create new forms, trainings and educational materials in compliance with the regulation. The extended timeline also allows consumers and the public more time to become aware of the law.
Any contract terms that impede on the effectiveness of an inspection will also be prohibited. Limits on repair costs or deposit returns that are negotiated between buyer and seller will still be allowed.
The EOHLC is also providing a standard disclosure form, and those individuals facilitating the transaction in a business capacity will be required to provide the disclosure, or risk violating consumer protection law. Other violations will be addressed on a case-by-case basis.
Pre-sales of new construction homes will have a limited exemption from the regulation to support new construction in the state, as long as a purchase contract is signed before “substantial completion” and the seller offers a one-year written warranty, at a minimum. Exemptions will also be applied to domestic partners, extended family members and estate planning, the EOHLC said.
The Greater Boston Real Estate Board, Massachusetts Association of Realtors, Massachusetts Mortgage Bankers Association and the Commercial Real Estate Development Association all opposed the regulation in a joint statement published during the May feedback period.
Concerns about the policy included an earlier timeline (which the EOHLC responded to by pushing the implementation date to October), profession-based exemptions (a previous version of the legislation also exempt licensed home inspectors from the prohibition on waiving inspections) and a need for more clarity and consistent guidance within the regulations. The organizations also questioned whether the state would have the capacity to meet a resulting surge in home inspection demand.
