How Important Is The Home Inspection Agreement?

In every Home Inspection Agreement, no matter the company, there are steps that need to be taken for remedies and proper dispute resolution. If these steps are not followed, claims will often be rejected by the E&O insurance companies.

It is also advisable, as buyer’s agents, that a clause be added to your agreements in which the client acknowledges that he or she has read the Home Inspection Agreement, and that he or she understands it. Having this clause can prevent claims against the buyer’s agent and broker.

Every Home Inspection Agreement (referred to as HIA) needs to have the following to be valid:

• SCOPE OF INSPECTION
  This is exactly what it sounds like; it addresses in no uncertain terms what the inspection is to entail.

The HIA should reference the governing body in which the inspector is licensed. In the case of Florida, we are regulated by the Florida Department of Business and Professional Regulation. Our specific rules are contained in the Florida Administrative Code, Rules 61-30.801 through 61-30.811.

Any additional services must be in writing and signed by the home inspector and client.

NO VERBAL REPRESENTATION IS BINDING

• COMPLIANCE WITH BUILDING CODES
  Consistent with the scope of the HIA, the Inspector will identify items that may present a health or safety issue. However, the Inspector will not provide an opinion on compliance with any particular building code.

One general rule to remember is that code only applies to the year in which the structure was built, or to the specific remodel or improvement (such as adding a new water heater)

• INSURABILITY
  The Inspector will not determine the insurability of the Property. Insurance companies have different underwriting criteria, and the Inspector cannot be expected to determine how a particular system or component may affect insurability.

A 4-Point Report is strictly a snapshot of the current condition.

• RESOLUTION OF DISPUTES
  It is important that the dispute process is followed according to the terms of the HIA.

In most HIAs, the client is instructed to contact the Home Inspector prior to making any alterations or repairs.

Be careful of contractors citing code and convincing your client to make repairs claiming the inspector’s insurance will pay for it.

Every Home Inspection should have photos. Not only are the pictures there to document the current view of the structure, they also aid in notating limitations of access to areas of the home. All inspectors should document those areas of limitations as well. Referencing limitations protects the buyer, the agent, and the inspector.

Below is a quick summary of a good limitations policy and something to be aware of in every inspection.

• LIMITATIONS
  Most, if not all home inspections will reference limitations.

Typical limitations will include: Wall framing or insulation (finished walls); ceiling joists are not visible (insulation in attic); and floor structure is not visible (finished flooring)

Other common limitations can include storage, furniture, and personal items.

Limitations that prevent access, such as permanent siding or mechanically fastened barriers to crawlspaces and attics can be a problem for the inspector, and they cannot be removed by either buyer or inspector, according to the Florida Administrative Code.

In the event that a mechanically fastened barrier or excessive storage exists that prevents access, it is the responsibility of the buyer (or buyer’s agent) to contact the seller (or seller’s agent) to have the owner remove the mentioned barriers.

Once the limitation has been removed, the buyer can request a re-inspection, often for a fee (which can be negotiated with the seller), and the inspector can return to inspect that specific area.

In the event the buyer chooses not to have the limitations corrected and access made, the buyer loses all recourse for a claim that should arise in the specified area.