Why is Your Inspection Contract Important?
By Joseph Denneler,Esquire
I am a lawyer whospecializes in the defense of home inspectors in litigation.
I’ve been representing homeinspectors for many years and my law practice is almost entirely dedicated to this work.
Being in this position has given me a wealthof knowledge about inspector claims.
Once I became established in this field and my practice began to grow, I also started teaching risk management to home inspectors all over the United States.
An inspection contract isan important and necessary risk management tool that provides the first level of defense to an inspector.
Many states that areregulated require that a contract be used to establish the scope of the services to be provided to the client.
Even in states that have no such regulations,an inspection contract may be required by your insurance carrier.
Why? Well, more often thannot, your inspection contract can prevent significant legal expenses defending a claim in court.
It is also the best way to let your clientknow exactly what is included and what is not.
Many homebuyers only go through the process ofbuying a home once or twice in their lifetime.
They are not familiar with the ins and outs ofa home inspection.
A well-written contractgives the client all of the information needed to make an informed purchase ofthe services of an inspector. State Specific
Based on numerous conversations with inspectors about claims over the years, aswell as the many cases I’ve handled personally, I have learned some universal truths.
One is that many claims arise from ambiguity,particularly ambiguity about what a home inspector does and, more importantly,what a home inspector does not do.
I realized that in many cases claims could beavoided with a clear, concise and accurate inspection contract.
The contracts I saw in my cases were oftenhaphazardly put together documents combining several other contracts,
without regard to the standard of care beingemployed by the inspector or the scope of the inspection.
Many lacked the required statutorily language.They were often several years old, with no revisions for changing laws,changing conditions or changing times.
I know from my years ofdefending inspectors in litigation and assisting insurance carriers with claimsall over the country that the requirements fo
r what must be in aninspection contract vary widely among the states that have regulations inplace.
Some, like Kentucky,require that the contract contain a “right to cure” provision allowing an inspector the opportunity to cure a defect before the client can file a legal action.
New Jersey has many requirements, includingspecific language identifying the correct standards of practice.
Virginia has differentrequirements for contracts used by “certified” inspectors and those who are notcertified.
In addition to the standards of practice, an inspection contractmust reflect that state’s position on things like arbitration,
limit ofliability and other defensive clauses found in most inspection contracts.
These nuances are criticalfrom a legal standpoint. In many states, if the inspection contract does notfollow the requirements of that state, the entire contract can be voided.
This means no chance for arbitration, no limitof liability and no opportunity to see the alleged damages before they areprepared.
Moreover, I need to be able to show a judge ora jury that my client followed the applicable standards in every aspect of theinspection.
The advantage to having an inspection contractthat speaks the language of a particular state is invaluable.
When I can show a judge or jury that my clientagreed to do exactly what was required under a particular state’s inspectorregulations,
it creates the inference in the judge orjury’s mind that my client is focused on the appropriate standards and nothingelse.
It eliminates ambiguity as to what was part ofthe inspection and what was not.
Your inspection contract is the most important partof the home inspection transaction.
It sets thestage for what you will do, the limits on your ability to inspect and addressesspecific state standards.
It is theprimary communication given to your client before you perform your work.
Itshould be written in tandem with your applicable standards of practice.
It should bewritten based on your state’s specific laws and regulations. It should work.
You should be using contracts that are specific toyour state and specific to their regulations.
Your contract needs to be rightthe first time.
It needs toreflect your standards of practice and your duty to your clients.
It is themost important first step in preventing ambiguity.
It is thefirst step toward preventing claims before they happen.
You should always have an up-to-date, correct contract.
**
About the Author
**Attorney Joe Dennelerprovides inspection contracts written to the home inspection standardsapplicable and specific to your state.
OREP Insured’senjoy 25% off these services.
You can contact Joe directly atJDenneler@srstlaw.com or if you’re an OREP Insured and would like your discount code,
email subscription@workingre.com.
A PIA, or Property Inspection Agreement, a contract by any other term, (An agreement creating obligations enforceable by law,) is a very import means of explaining as well as defending your company/entity/person.
PIA’s, should be forwarded to your clients ASAP, or between 24 to 48 hour prior the inspection.
I use Carson and Dunlop Horizon. An email attachment containing the PIA in PDF format is completed on the clients computer, tablet or cell phone.
No need to print, sign, copy and return via fax or email. As well, all reports and contracts are kept for 7 years.
Great system. HORIZON
Tell Nathan or John C. I sent you. Free one month trial.
I also recommend retaining…JOE fERRY CLAIMS INTERCEPT. Joe is a great guy, wonderful legal consultant, educator, and has been with InterNACHI sense its inception if I am not mistaken.
For the price of a home inspection Joe will defend you from meritless claims for one year and has successfully defended 99.7 percent of his claims.
Sorry to disappoint you but I feel good Information is always important .
I am sure you read a lot of information that is posted by our American’s friends like I do .
If you do not like what I post then you can put me on your not read list .
Ignoring could be your loss.
It seem’s many like my posts , and there are a lot of views 144 on this one in one day…
Doug, don’t get my post wrong. I think the information Joe Ferry gives to inspector is just as invaluable here in Ontario as it is anywhere else.
My concern was that recommending someone retain a Lawyer from out of Province or out of Country is bad-advice.
I think this is what both you and I referred to with our posts, and I suspect as usual, we will get the same grief from the same people using the same rhetoric as always.
I guess we must be sad to think that factual information, relevant to CANADIAN inspectors, in the CANADIAN section of InterNACHI should take precedent.
Maybe you and I should take a course that is obviously well attended by certain others.
I am far from perfect and do make errors I try to always tell the truth , Unfortunately I can not say the same about Len he frequently lies and does not seem to care about doing it.
I am still waiting for the two letters you said I would be getting from your lawyer Len.
Len your showing your Jealousy about Roy again.
You seem to love showing you hatred of many other home Inspectors on The NACHI site .
You love to try and embarrass me even to posting confidential information from me that I sent to you .
I’m not going to participate in this piss*** contest.
I have attended Joe Ferry’s lecture on limiting liability and his claim intercept program. Great information! I have utmost respect for him.
My point was that an opposing lawyer in this province would not likely pay much heed to an out of Province or out of Country lawyer, unlicenced to practice in this jurisdiction.
On the other hand a citizen (customer) might be intimidated enough to back off based upon Joe’s involvement.
No way would I ever I recommend Leonard Inskter to do an Home Inspection for any of my family .
**
Future Proof Property Inspections Inc.**
**LeonardInkster,*CMI CITP, CCHI, CPI, IAC2
*
Web: http://fppi.ca](http://fppi.ca/)
Mail: leni@fppi.ca
Looks like one of the usual cartoon bobs has decided to further show how ignorant he can be by attacking… That’s all he knows to do… Fire insults to further demonstrate how much of an ignorant arse he really is…
You can’t argue with this hypocrite and any attempt to do so is a total waste of valuable energy!
Just wait… Cartoon bob JR is going to chime in to tell us how life is unfair to the unicorns of his world (you’ll owe the unicorns an apology!) and how you should get in touch with someone from a different jurisdiction, who has nothing to do with the subject at hand but knows about donkeys somewhere in New Jersey…
Oh… You’ll then have to apologize to Eddy Murphy 'cause he played a donkey in a cartoon and he may feel hurt…
