Good News for California Inspectors

(Ian W. Mayer, CMI) #1

For years inspectors have asked and debated on this forum (and others) about just what happens with an inspection report when a home falls out of escrow.

The California Association of Realtors December 2018 revision of the California Residential Purchase Agreement makes it clear, and the revision gives home inspectors a boost.

In short:
A seller has to disclose previous reports to the buyer
The buyer has to sign a Receipt for Reports that acknowledges the new buyer cannot hold the previous inspector liable for errors.

C.A.R. is actively encouraging buyers to always get their own inspections!

Read More:
Previous Home Inspection Reports - IM Home Inspection

(Roy D. Cooke, Sr) #2

Ian Mayer

Interesting Info thanks for posting this … Roy

(Stephen W. Stanczyk, WA License #221) #3

It will be interesting since the court denied that Inspectors could use a “lack of privity” as a defense and could not create that defense through contractual language. There is no seeming defense for negligence.

Now this language in the Purchase & Sales agreement may protect the seller / agent, but I’m not too sure it is written in stone that it protects the inspector. Of course in litigation central California, it may not be long before this is tested.

I sure hope it stands up. That may very well change the inspection industry in California.

(Ian W. Mayer, CMI) #4

It is true language in the purchase contract does not make this actual law. I will not claim to know how a court would actually view this revision if it came down to it.

But it is nice to see CAR (The California Association of Realtors) throw inspectors a bone and at least inform home buyers the importance of getting their OWN inspection, and take a stand against reusing inspection reports.

As many jobs as I’ve gotten from people reading my reports on homes where a buyer didn’t close, I also occasionally lose deals when a client cancels because the seller gave them an old report that the buyer considers that “good enough”. :roll:

(Dave Fetty, CMI) #5

Interesting, thanks Ian!

(Gary D. Rowden) #6

Thanks Ian this looks interesting, and by the way I like how you added it to your website, great job….

(Mike Hazelwood, CMI) #7

There has already been a case here in Cali in the last year or two where a buyer successfully sued an inspector over a report that was not performed for them (they were not the client and no signed agreement). They used a report performed for a different client. A precedent has been set unfortunately…

(Jeffrey R. Pope, CMI) #8

The language and intent of this new addendum is to protect the member-agents (Realtors). It has no real affect on the liability of the inspector.

This is essentially a “warning” to the parties that if they rely on an inspection they did not pay/contract for, they MAY not have legal recourse should an issue arise after the sale. There are a number of reasons why they (the client) would not have legal recourse and any buyer is well advised to have their own inspection(s) performed regardless of any existing reports.

(Gary D. Rowden) #9

I wonder would this increase pre listing home inspections for sellers \:D/

(Ian W. Mayer, CMI) #10

Jeff Pope is, of course, quite correct.

I still say it is good news that CAR is at least encouraging buyers to get their own inspections and not rely on whatever.

It also subtlety encourages comparing inspection reports, which just maybe will encourage a few people to realize just how bad the minimalist, “do the job quickly” inspectors are.

(Jeffrey R. Pope, CMI) #11

Absolutely. It also puts a “bug in their brain” in the event they do think about suing an inspector for a service they didn’t pay for. They’re put on notice that it may be an uphill battle. Every roadblock provided in that respect is a welcomed effort.

(Nick Gromicko, CMI) #12

I’m quite certain you are incorrect.

(Stephen W. Stanczyk, WA License #221) #13

It was probably based on the Leko decision and is quite possible since there is case law on the books.