Today I received a faxed copy of our contract, with X’s on the part about the client cannot sue for unreported defects that the inspector has a right to sue for fees should he win, that the client cannot sue NACHI, and of course, they only receive up to the amount of the inspection. They did this without even calling to ask questions, or to voice their concerns.
Since they are from out of state, and were traveling here, we tried to contact their agent to let her know that this was unacceptable. We could not. We contacted the client, and they stated that they could not have the inspection done under these contract conditions, and their agent told them, Okay, we will cross it out, then the agent faxed the contract over. Needless to say, we cancelled the inspection.
I wonder how many agents give their sellers and buyers their contracts, let their clients cross out their commission amount and put their own in, sign it and the agent accepts it? :roll:
Ever have this happen anyone?
I’m lucky if the client actually reads any of the contract, let alone cross things out.
You did the right thing though.
Me thinks that you dodged a bullet.
Oh, exactly!! Our contract went from a home inspecton contract to a 2 year warranty…
100% of my inspections are started with out a signature
( boy I love Canada ).
The inspection I did yesterday still has not been signed and she has the Report and I have not been paid yet and no signature .
I expect like always the cheque will get here later this week they always do.
I sure hope we can stay away from the difficulties I see our southern neighbours have .
My heart goes out to you every time I read some of these things.
To bad you couldn’t obtain the real estate agents purchase contract, you could cross out some of their verbiage as well. See how well they like that…
I would add “Should agent mess with the inspector’s contract, the inspector gets half the commision for disrespectful behavior”
Understanding the Inspection Contract
By Barry Stone
During a recent home inspection, I had to review and sign the inspector’s contract that was filled with so many limitations and so much legalese that it forced me to question the quality and thoroughness of the inspection itself. I checked with two other inspectors and found their contracts to be slightly different but just as detailed and complicated. Could you please discuss the various clauses in these contracts and why the contract is needed at all? – Val
A primary business concern among home inspectors is exposure to general liability and the likelihood of eventual litigation. Least among these worries is the expectation of being called to account for professional negligence, such as failure to disclose a significant property defect. The more ominous fear, however, is the specter of a frivolous lawsuit, arising from the unreasonable expectations of a misdirected buyer or the baseless demands of an over-zealous attorney.
Today’s business environment is commonly recognized as a wild litigious jungle, where predatory ambushes in the dense legal underbrush are to be anticipated. For home inspectors, exposure to attack and demise is a dreaded fear to be avoided, defined, and limited as much as possible. Hence, the lengthy and laborious legal clauses of the typical home inspection contract.
Although home inspection agreements vary widely in their specific contents, there are some denominators common to most. Among these are four categories of liability limitation:
- Defining the scope and limitations of the inspection:
Most home buyers have a vague concept of the general scope of a home inspection. The exclusions listed in the inspection contract can dispel uncertainties in this regard. For example, in most states, home inspectors do not inspect for termites and other wood destroying organisms, as this practice is usually reserved by law for licensed pest control operators. Other common limitations involve engineering standards, geological stability, environmental hazards, zoning designations, lot line placement, low voltage electrical equipment, product recalls, and many more. Chief among home inspection disclaimers are conditions that cannot be seen because they are concealed within the construction, buried beneath the ground, hidden behind personal property, or otherwise unobservable. These and many other conditions are listed in contracts as being outside the scope of the inspection.
- Setting a monetary limit on liability:
Many inspection agreements state a specific dollar maximum on liability, commonly a refund of the inspection fee or a multiple thereof. In some states this limitations has been upheld by the courts; in others it has been rejected. Some inspectors have no such limits in their contracts because the deductibles on their errors and omissions insurance policies provide a reasonable ceiling for liability.
- Establishing a means of dispute resolution (usually arbitration or mediation):
Courtroom litigation and the discovery processes that lead to trial are among the most lengthy, costly, and frustrating means of conflict resolution. Even the winners are losers, when the financial and emotional costs are tallied. To avoid such ordeals, inspectors often prefer the less protracted processes of mediation or arbitration, as set forth in their contracts.
- Shortening the statute of limitations:
In many states, there are no laws defining the time limit on home inspector liability. In others, statutes of limitations can expose an inspector to potential litigation many years after the inspection. Some inspection contracts address this by limiting liability to a specific time frame, such as one year. Enforcability of such clauses can vary from one state to another, and in some areas, from one court to another.
The cautious structures of home inspection agreements, in most cases, should not arouse concern as to the quality of the inspection being performed. These contracts are simply a reflection of the conflict oriented business environment in which we live, a marketplace where every adverse event is “someone’s fault;” where someone, somehow, must be held accountable. Home inspectors, along with the rest of us, are caught in this regrettable tangle. To ensure that you receive a thorough and competent inspection, check the inspector’s qualifications and reputation beforehand, and read the contract carefully before you sign it. You can also request an advance copy the contract for review by your attorney.
Your contract does not stop you from being sued. In some states, it will not even hold up in court. Without it you have no defense. I too, would have cancelled the inspection.
I would have educated the prospective Client and Realtors about why the clauses are necessary and then rescheduled the inspection. I’ve only had to do that once, though.
Most parts of the Inspection Agreement that will not stand up in court are because they are not bargained for by the client, they are “take it or leave it” contracts and get thrown out because of this in many cases.
If your client doesnt want to contract those parts then I guess it is up to you to decide if you want to do the inspection under that agreement.
It sounds to me as if they did exactly that.
Way to go, Gloria.
You did the smart and sensible thing!
I was given this advice:
- I create a contract and send it off to a client.
- The client makes changes to the contract.
- I fail to notice/agree to the changes.
Result: If you do work, you were operating under “NO WRITTEN” contract. Since a contract requires both parties to agree to it (their X’s without your sig is an unapproved modification). This can be very dangerous to both parties.
tom <not a lawyer>
I would have gladly went through it with them, but they didnt give me a chance. When I contacted the client Sunday evening, they were on their way here from out of state. Inspection was set for 9am Monday. I told them that the changes were unacceptable. I tried to tell them what they crossed out was “unreported” ie outside the scope of the inspection. Our contracts states that we are not responsible for any item outside the scope. Before I could finish the sentence, he said “YOUR contract is unacceptable.”
Oh, and his wife that answered the phone: When I told her who I was she said “We have never sued anyone”
I am willing to work with anyone concerning the contact. What bothered me was the agent crossing out the distasteful issues and faxing it over. I found that to be the most unprofessional thing to do.
I would classify this as an act of arrogance. I think your response was appropriately measured and professional.
With the client objecting to your contract and bringing up the topic of litigation, herself…even had the client later relented and agreed to sign an unmodified agreement, I would have had to increase my price to such a ridiculous level that they would refuse to hire me.
Let’s all agree on this one point…that there are certain inspections that we actually would prefer our competitors to book. This would be one of them, as far as I’m concerned.
What about 3rd party interference? Agents have no legal business crossing out anything in a contract between client and inspector. In this transaction, the agent is not a party. Anyway, as previously stated, you probably did the best thing; indeed, the only thing you had a chance to do. Anybody wanna take bets this was an inexperienced agent? There’s probably not a dime’s worth of difference between inspector’s contracts, overall. You’d think the agent would have noticed before.
I can’t agree on that one point. I never wanted my competitors to have any inspections. I’ve even done inspections for straight people.
Hey Russel, I agree.
I’ll do an inspection for anyone. Even not straight people.
Of course if I get the feeling someone is looking for me to be their “home warrantee” I’ll probably bump my fees a little bit.
I state many times–in my contract, at the inspection, after the inspection, and in the report–that the home inspection is not a warranty or a guarantee, so I don’t have any problems there. However, if someone needs a warranty, I offer such free with my PREMIUM and TECH inspections, and charge $19.99 for my STANDARD inspection.
My customer service program also encourages my Clients to contact me if they, or their family members, or their friends, or their business associates, have any questions about real estate (or The Beatles, or The Power of P, or landscaping, or marketing, or railroads). I love to help people, and most of the time I even get paid for helping them.