For your review: First draft of InterNACHI's new "Plain English" inspection agreement

General Inspection Topics Legislation, Licensing, Ethics & Legal Issues
1

HOME INSPECTION AGREEMENT

This is an Agreement between you, the undersigned Homeowner, and us, the Inspector, pertaining to our inspection of your Property at:
______________________________________________________________________________________________________________________. The terms below govern this Agreement.

  1. You will pay us __________ for our inspection. You have paid us a deposit of __________.

  2. We will perform a visual inspection of the home/building and provide you with a written report identifying the defects that we both observed and deemed material. We may offer comments as a courtesy, but these will not comprise the bargained-for report. The report is only supplementary to the seller’s disclosure.

  3. Unless otherwise noted in this Agreement or it is not possible, We will perform the inspection in accordance with the current Standards of Practice of the International Association of Certified Home Inspectors (“InterNACHI”) posted at http://www.nachi.org/sop.htm. You understand that these standards contain limitations, exceptions, and exclusions. You understand that InterNACHI is not a party to this Agreement, has no control over us, and does not supervise us.

  4. Unless otherwise indicated in writing, we will NOT test for the presence of radon – a colorless, odorless, radioactive gas that may be harmful to humans. Unless otherwise indicated in writing, we will not test for mold. Unless otherwise indicated in writing, we not test for compliance with applicable building codes or for the presence of potential dangers arising from asbestos, lead paint, formaldehyde, molds, soil contamination, and other environmental hazards or violations. If any structure or portion of any structure that is to be inspected is a log home, log structure or includes similar log construction, you understand that such structures have unique characteristics that make it impossible for us to inspect and evaluate them. Therefore, the scope of our inspection will not include decay of the interior of logs in log walls, log foundations or roofs, or similar defects.

  5. Our inspection and report are for your use only. You give us permission to discuss observations with real estate agents, owners, repair persons, and other interested parties. You will be the sole owner of the report and all rights to it. We are not responsible for use or misinterpretation by third parties, and third parties who rely on it in any way do so at their own risk and release us (including employees and business entities) from any liability whatsoever. Our inspection report are in no way a guarantee or warranty, express or implied, regarding the future use, operability, habitability or suitability of the home/building or its components. We disclaim all warranties, express or implied, to the fullest extent allowed by law.

  6. We assume no liability for the cost of repair or replacement of unreported defects or deficiencies either current or arising in the future. You agree that in all cases our liability shall be limited to liquidated damages in an amount equal to the fee you paid us. You waive any claim for consequential, exemplary, special or incidental damages or for the loss of the use of the home/building. You acknowledge that the liquidated damages are not a penalty, but that we intend them to (i) reflect the fact that actual damages may be difficult and impractical to ascertain; (ii) allocate risk between us; and (iii) enable us to perform the inspection for the agreed upon fee…

  7. We do not perform engineering, architectural, plumbing, or any other job function requiring an occupational license in the jurisdiction where the property is located. If we hold a valid occupational license, we may inform you of this and you may hire us to perform additional functions. Any agreement for such additional services shall be in a separate writing.

  8. If you believe you have a claim against us, you agree to provide us with the following: (1) written notification of adverse conditions within 14 days of discovery; and (2) access to the premises. Failure to comply with these conditions releases us from liability.

  9. You agree that any litigation arising out of this Agreement shall be filed only in the Court having jurisdiction in the County where we have our principal place of business. If you fail to prove any claim against us, you agree to pay all our legal costs, expenses and fees incurred in defending that claim. You agree that any legal action against InterNACHI itself, allegedly arising out of this Agreement or our membership in InterNACHI, must be brought only in the District Court of Boulder County, Colorado. Before bringing any such action, you must provide InterNACHI with 30 days’ written notice of the nature of the claim. In any action against us or InterNACHI, you waive trial by jury.

  10. If a court declares any provision of this Agreement invalid, the remaining provisions remain in effect. This Agreement represents our entire agreement; there are no terms or promises other than those set forth herein. No statement or promise by us shall be binding unless reduced to writing and signed by one of our authorized officers. Any modification of this Agreement must be in writing and signed by you and by one of our authorized officers. This Agreement shall be binding upon and enforceable by the parties and their heirs, executors, administrators, successors and assignees. You will have no cause of action against us after one year from the date of the inspection.

  11. Payment of the inspection fee (less any deposit noted above) is due when we complete the inspection. You agree to pay all costs and attorney’s fees incurred in collecting the fee owed to us. If the Homeowner (or other client) is a corporation, LLC, or similar entity, by signing this Agreement you personally guaranty payment of the fee.

  12. If you request a re-inspection, the re-inspection is subject to the terms of this Agreement.

  13. You may not assign this Agreement.

  14. If a court finds that any term of this Agreement is ambiguous or otherwise requires judicial interpretation, the court shall not construe that term against us by reason of the rule that any ambiguity in a document is construed against the party drafting the document. You had the opportunity to consult qualified counsel before signing this Agreement.

  15. If there is more than one owner of the property, you are signing on behalf of all of them, and you represent that you are authorized to do so.

I HAVE CAREFULLY READ THIS AGREEMENT. I AGREE TO IT AND ACKNOWLEDGE RECEIVING A COPY OF IT.

CLIENT (Date) CLIENT (Date)

2

The plain English movement seeks to promote the use of plain English over Legalese in business and law. Plain English is writing that is clear, concise, and readily understood by the target audience. The use of plain English lowers costs, improves productivity, increases credibility and reduces misunderstandings.

InterNACHI is moving toward making all its documents available in plain English.

3

This seems directed to the homeowner, not the homebuyer client.

4

I like this idea a lot. It probably makes sense to refer to “the property” instead of “your property” since the client may or may not be the current owner of the property. Keep working on this agreement and it will be a great improvement over the older legal version…

5

The plain English or plain language movement is gathering steam. Courts are looking favorably on companies that use plain English contracts.

6

Nuff said!

7

Just curious

Why is this in there?

third parties who rely on it in any way do so at their own risk and release us (including employees and business entities) from any liability whatsoever.

The third party won’t see or sign the agreement.

8

I think it is referring to third parties using the final report.

9

It’s in there so that parties other than your client don’t rely on it. Sometimes agents give your reports to subsequent buyers.

10

They should be subject to $250,000 fine and/or five years imprisonment in a federal prison as if they had copied a movie!

Ooops! Sorry, we don’t have the clout of the movie making industry do we?

:nachi:

11

What about Buyers or anyone else that ordered the inspection?
It is typically not the actual Owner orders an inspection.

That needs to be changed. After that I will continue my assessment…:cool:

Jim

12

Nick,

I’ve added my 10c in blue, which includes some typo correction of the original text. The stuff in red I would propose are either not needed (fluff) or not plain English. Especially the bit about the report being supplementary only to the sellers disclosure. :smiley: Hope this helps.

13

Thanks Len.

14

I love this!!

15

What about using I vs we for a single inspector firm or make it I/WE.

Nice contract!!

Also what about the radon clause if a test is being performed by the licensed radon tester that is also the home inspector? Maybe an exclusion.

16

we will not test for compliance with applicable building codes.

Do we test for code compliance? John

17

Thank you all for your comments on this. They were helpful. I have revised the proposed Agreement, and the second draft appears below. Let me make a few comments:

  1. I used “us” rather than “I” because most inspectors should be doing business as an LLC or corporation. If you are a sole proprietor and want to change it to “I,” that is fine.

  2. It’s very important to try to keep this to one page because I think long contracts scare clients. Obviously, each inspector can make any modifications or additions that he/she sees fit to make.

  3. Some of the proposed changes are not consistent with the Plain English principle of using as few words as possible. By way of example only, I believe “You understand…” works just as well as “You confirm that you understand…” Again, if people don’t like that style, they are free to modify it as they see fit.

  4. This language is included because some states have outlawed these types of clauses and other states have said they will consider these factors in deciding whether to enforce these clauses: You acknowledge that the liquidated damages are not a penalty, but that we intend them to (i) reflect the fact that actual damages may be difficult and impractical to ascertain; (ii) allocate risk between us; and (iii) enable us to perform the inspection for the agreed upon fee.

  5. This language puts the client on notice of the dangers of radon - – a colorless, odorless, radioactive gas that may be harmful to humans

  6. As I thought about it, I took this out: We may offer comments as a courtesy, but these will not comprise the bargained-for report. I think this opens up an ambiguity we don’t want. Are these comments written or oral? Why give a client a chance to claim you were negligent in a comment you made?

  7. I think this language could be important in a case where the buyer sues both the seller and the inspector. A jury or judge apportioning fault will have to assign a percentage of blame to each. Moreover, it makes clear to the Client that they should review the Seller’s disclosure carefully, possibly allowing an inspector to argue that the Client was contributorily negligent in failing to carefully review the Seller’s disclosures: The report is only supplementary to the seller’s disclosure.

This is an Agreement between you, the undersigned Client, and us, the Inspector, pertaining to our inspection of the Property at:
______________________________________________________________________________________________________________________. The terms below govern this Agreement.

  1. You will pay us __________ for our inspection. You have paid us a deposit of __________.

  2. We will perform a visual inspection of the home/building and provide you with a written report identifying the defects that we both observed and deemed material. The report is only supplementary to the seller’s disclosure.

  3. Unless otherwise noted in this Agreement or it is not possible, We will perform the inspection in accordance with the current Standards of Practice of the International Association of Certified Home Inspectors (“InterNACHI”) posted at http://www.nachi.org/sop.htm. You understand that these standards contain limitations, exceptions, and exclusions. You understand that InterNACHI is not a party to this Agreement, has no control over us, and does not supervise us.

[size=2]4. Unless otherwise indicated in writing, we will NOT test for the presence of radon – a colorless, odorless, radioactive gas that may be harmful to humans. Unless otherwise indicated in writing, we will not test for mold. Unless otherwise indicated in writing, we will not test for compliance with applicable building codes or for the presence of or for any potential dangers arising from the presence of asbestos, lead paint, formaldehyde, molds, soil contamination, and other environmental hazards or violations. If any structure or portion of any structure that is to be inspected is a log home, log structure or includes similar log construction, you understand that such structures have unique characteristics that make it impossible for us to inspect and evaluate them. Therefore, the scope of our inspection will not include decay of the interior of logs in log walls, log foundations or roofs, or similar defects.[/size]

[size=2]5. Our inspection and report are for your use only. You give us permission to discuss observations with real estate agents, owners, repair persons, and other interested parties. You will be the sole owner of the report and all rights to it. We are not responsible for use or misinterpretation by third parties, and third parties who rely on it in any way do so at their own risk and release us (including employees and business entities) from any liability whatsoever. If you or any person acting on your behalf provide the report to a third party who then sues you and/or us, you release us for any liability agree to pay our costs and legal fees in defending any action naming us. Our inspection report are in no way a guarantee or warranty, express or implied, regarding the future use, operability, habitability or suitability of the home/building or its components. We disclaim all warranties, express or implied, to the fullest extent allowed by law. [/size]

  1. We assume no liability for the cost of repair or replacement of unreported defects or deficiencies either current or arising in the future. You agree that in all cases our liability shall be limited to liquidated damages in an amount not greater than the fee you paid us. You waive any claim for consequential, exemplary, special or incidental damages or for the loss of the use of the home/building. You acknowledge that the liquidated damages are not a penalty, but that we intend them to (i) reflect the fact that actual damages may be difficult and impractical to ascertain; (ii) allocate risk between us; and (iii) enable us to perform the inspection for the agreed upon fee…

  2. We do not perform engineering, architectural, plumbing, or any other job function requiring an occupational license in the jurisdiction where the property is located. If we hold a valid occupational license, we may inform you of this and you may hire us to perform additional functions. Any agreement for such additional services shall be in a separate writing.

  3. If you believe you have a claim against us, you agree to provide us with the following: (1) written notification of adverse conditions within 14 days of discovery; and (2) access to the premises. Failure to comply with these conditions releases us from liability.

  4. You agree that any litigation arising out of this Agreement shall be filed only in the Court having jurisdiction in the County where we have our principal place of business. If you fail to prove any claim against us, you agree to pay all our legal costs, expenses and fees incurred in defending that claim. You agree that any legal action against InterNACHI itself, allegedly arising out of this Agreement or our membership in InterNACHI, must be brought only in the District Court of Boulder County, Colorado. Before bringing any such action, you must provide InterNACHI with 30 days’ written notice of the nature of the claim. In any action against us or InterNACHI, you waive trial by jury.

  5. If a court declares any provision of this Agreement invalid, the remaining provisions remain in effect. This Agreement represents our entire agreement; there are no terms or promises other than those set forth herein. No statement or promise by us shall be binding unless reduced to writing and signed by one of our authorized officers. Any modification of this Agreement must be in writing and signed by you and by one of our authorized officers. This Agreement shall be binding upon and enforceable by the parties and their heirs, executors, administrators, successors and assignees. You will have no cause of action against us after one year from the date of the inspection.

  6. Payment of the inspection fee (less any deposit noted above) is due when we complete the inspection. You agree to pay all costs and attorney’s fees incurred in collecting the fee owed to us. If the Client is a corporation, LLC, or similar entity, you personally guaranty payment of the fee.

  7. If you request a re-inspection, the re-inspection is subject to the terms of this Agreement.

  8. You may not assign this Agreement.

  9. If a court finds any term of this Agreement ambiguous or that it otherwise requires judicial interpretation, the court shall not construe that term against us by reason of the rule that any ambiguity in a document is construed against the party drafting it. You had the opportunity to consult qualified counsel before signing this Agreement.

  10. If there is more than one Client, you are signing on behalf of all of them, and you represent that you are authorized to do so.

I HAVE CAREFULLY READ THIS AGREEMENT. I AGREE TO IT AND ACKNOWLEDGE RECEIVING A COPY OF IT.

18

Mark, in all fairness, I do not believe it is possible to fit all of this on One page, unless you use the smallest font possible, and widen the margins, which would make it more difficult for the average person (client) to read.

19

Maybe copy and paste it into a WORD doc, save it as an 8.5" x 11" PDF, and then post a link to the PDF to see how it looks on one page?

20

Her you go. Maybe it isn’t too small, for some anyway.