Wisconsin legislative changes impact what a home inspector calls a defect

Wis. Act 338, effective July 1, 2018, modified the home inspector statute, Wis. Stat. Chap. 440, to create consistency between the offer to purchase and the home inspector’s report. 

Offer to purchase

The 2011 WB-11 Residential Offer to Purchase defines a “defect” on lines 182-184 as: “a condition that would have a significant adverse effect on the value of the Property; that would significantly impair the health or safety of future occupants of the Property; or that if not repaired, removed or replaced, would significantly shorten or adversely affect the expected normal life of the premises.”

Home inspector definition 

The definition of “defect” in the inspection report is now substantially similar to the definition of “defect” in the offer to purchase. Wis. Stat. § 440.97(2m) “Defect” means a condition of any component of an improvement that would significantly impair the health or safety of future occupants of a property or that, if not repaired, removed, or replaced, would significantly shorten or adversely affect the expected normal life of the component of the improvement.

Therefore, as of July 1, 2018, when a home inspector calls something a defect in the inspection report, the condition must meet the definition contained in the home inspector statute of Wis. Stat. § 440.97(2m).

Discrepancy in the rules and statute

As of July 1, 2018, the home inspector administrative rules of Wis. Admin. Code § SPS 131 are inconsistent with the statutory changes of Wis. Stat. Chap. 440. However, even though the rules use different regarding verbiage and terminology that are inconsistent with the new statutory language, the statutory language supersedes administrative rules. The home inspector administrative rules will be updated, but until then, note the statutory language of Wis. Stat. 440 controls the practice. Home inspectors are also required to be educated about the statutory changes. 

Wis. Stat. § 440.975(3) After completing a home inspection, a home inspector shall submit a written report to a client that does all of the following:
(a) Lists the components of an improvement to residential real property that the home inspector is required to inspect under the rules promulgated under s. 440.974(1) (b).
(b) Lists the components of an improvement to residential real property that the home inspector has inspected.
(c) Describes any condition of an improvement to residential real property or of any component of an improvement to residential real property that is detected by the home inspector during his or her home inspection and that, if not repaired, will have a significant adverse effect on the life expectancy of the improvement or the component of the improvement. *
(cm) Describes any defect that is detected by the home inspector during his or her home inspection. A home inspector is not required to use the term “defect” in describing a defect in the written report required under this subsection. A home inspector may not use the term “defect” in a written report required under this subsection unless that use is consistent with s. 440.97 (2m).
(d) Provides any other information that the home inspector is required to provide under the rules promulgated under s. 440.974(1) (c).
* The strikethrough represents the removed statutory language, while the underline represents new language added by the legislation to the home inspector statute.

*Source WRA, Cori Lamont https://www.wra.org/WREM/July18/Defect/