Pre-inspection Agreements: Wording Matters

Friday, May 3, 2013

In a perfect world, Home Inspectors would have no need for pre-inspection agreements. Contracts simply wouldn’t be necessary because every client would be completely satisfied with the work you do, conflict would be non-existent, and you would never, ever get sued.

Unfortunately, the world isn’t perfect. Whether warranted or not, clients often do express dissatisfaction with home inspections. When that happens, conflict emerges and the result is often a time consuming and expensive lawsuit.

Getting a pre-inspection agreement signed by your client is the best way to lay out your responsibilities and your expectations in advance. But just “getting a signature” is not enough. If you want to do as much as you can to protect your business from a lawsuit, pay attention to the language used in your contract. It does matter.

Contact a local attorney to write an agreement that’s specific to your business and your state. Be sure to ask your attorney about including language that answers the following questions:

  1. What are you responsible for? Clearly identifying your responsibilities will help you know what’s required of you in order to fulfill your end of the deal?

    • Identify the address of the home to be inspected.

    • If your home inspection duties change based on size of home, location, type of structure, etc. be sure to amend your agreement for each client in order to include specifics on what you will examine during each particular inspection.

    • If applicable, note any deadlines for completing the inspection and for providing a written report to the client.

  2. What responsibilities does your client have? Your client’s main responsibility is payment. Be sure your agreement specifies the inspection fee amount, when it is due, and whether or not you have a refund policy in place.

  3. Are there any exclusions or limitations? Ensure that the agreement you enter into with clients highlights anything you won’t do as well as what you will do. Common exclusions and limitations include:

    • Whether or not the client may accompany the inspector during the inspection (including a statement about how personal risk will be handled for the client during said inspection)

    • The systems and conditions which will not be included in the inspection

    • Whether or not the inspection report can be used as a warranty or guarantee

    • What is your policy on use of subcontractors? What kind of protection do they receive under this agreement?

    • What happens if the inspection uncovers something that needs to be further evaluated by an expert?

  4. What happens if there is a conflict or dispute?

    • How much time does a client have to report an issue after noticing it?

    • How are disputes resolved?

    • Do you have a refund policy in place? If so, do you require a release to be signed?

This isn’t a perfect world. If you do not have the protection of a carefully written pre-inspection agreement, you may become a target for lawsuits.

Protect yourself. If you’re a FREA member, contact us to take a look at a sample pre-inspection agreement. Then contact a local, knowledgeable attorney who can help you write a pre-inspection agreement specific to your business and your state.

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The author of this blog post is not an attorney, and this content is in no way offering or intending specific legal advice. Home inspectors should consult with knowledgeable, local attorney about any pre-inspection agreements.

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