The home inspection field is especially fraught with lawsuits. Homeowners all too often believe that their home inspector is their guardian angel and will find any and every flaw in a home. In real life, it doesn’t play out this way.
First-time homebuyers can have particularly unreasonable expectations. When a problem with their house crops up, they take it hard, especially if it’s an expensive problem.
As a home inspector, you mitigate some of your risk in working with homeowners by having them sign a contract before the inspection, spelling out what is included and what is not included, and also listing what you as the home inspector are responsible for.
What should you include in the contract?
We have some suggestions, but always have a lawyer with experience in real estate or home inspections look over your contract and sign off on it to make sure you are fully protected. Ensure that you choose a lawyer who works in the state in which you do business, so they are familiar with the local laws.
- Use easily understood language. Contracts often are written in ways neither party can understand — just the lawyers. This is unnecessary and in fact, as the ASHI Reporter points out, some state governments have “plain language” requirements that forbid writing contracts the customer cannot understand.
- List what you will inspect and what you won’t. What is — and is not — included in a home inspection is an important part of the contract and will protect you against many unwarranted claims. Take the time to go over this in person or over the phone with your client as well. It will cut down on surprises and complaints.
- Have a clause with exclusions. Specifically what you will exclude may be personal to you and your business, but consider mentioning, for instance, that you are not responsible for future defects. You may warn a homeowner about a rotting or sagging roof, old appliances or other parts of the home that look like they are on their last legs. But it’s not always possible to predict when something will break.
- Include the cost of the inspection, what forms of payment you accept and methods of collection if the fee isn’t paid. Potential homeowners who do not buy the home, in particular, are less motivated to pay the home inspector’s bill. Be prepared for this and have a plan to collect your fee.
- Outline the complaint process. Let customers know that they have a specific time period in which to file a complaint. You don’t want customers coming back months — or years — later saying you should have caught thus-and-such. Say if you want the complaints in writing as well.
- Include an exculpatory section. This is where you put any disclaimers or limit liabilities. This will not protect you 100 percent in the event of a lawsuit, but it can help. You can’t just claim that you aren’t responsible for any problems you missed. Include reasonable circumstances in which you cannot be held liable. For instance, if the crawlspace beneath the home has dangling electrical wires, pools of water and a family of angry raccoons living in it, you will most likely be considered reasonable for declining to inspect this area.
These are just a few suggestions. One great way to access a complete list of what home inspectors generally include in reports and what they are (and are not) responsible for is to take advantage of our home inspection report software, offered free to all ICA School graduates. We include this indispensable software in our home inspection training courses because we know that you, as a new home inspector, can benefit greatly from a comprehensive list of inspection points. For more information, check out our website today!