Pre-list vs pre-purchase inspection and liability

[Stephen Lagueux]

The thought has been running in my head for quite some time. I was wondering if an inspector that performs a pre-list inspection can be held liable for something the pre-purchase inspection may bring up.

On one hand, the pre-list inspector might want to limit his responsibility toward the seller by reimbursing any amount up to the price of the inspection in case he missed something.

But on the other hand, the seller hired a professional to make sure he doesn't have any bad surprises arising from the pre-purchase inspection. I'm no lawyer, but imo, I think there could be huge legal ramification to this service. To me, the idea of limiting the liability to the price of the inspection is just too easy and I'm pretty sure this type of clause could be found null and void by a judge.

A pre-list inspector could be on the hook for the price of repairs or replacement for whatever he may have missed, whatever clauses his agreement with the seller may contain.

Anyone knows of jurisprudence on the matter and is a pre-list agreement considered a contract of service or a contract of result?

Opinions?

[gtblum]

From what I've experienced, it's the perfect tool for those who have a vested interest in the sale to keep the unknowing from hiring an inspection of their own. See? It's already been inspected!

On the other hand, you're a smart guy. I think you already know the answer to this question.

[Neal Lewis]

If what you've missed is so huge as to cause the deal to fall apart, I could see some possible liability. Otherwise, I would highly doubt you would be on the hook for anything you missed during a pre-listing inspection.

[Marc]

If what you've missed is so huge as to cause the deal to fall apart, I could see some possible liability. Otherwise, I would highly doubt you would be on the hook for anything you missed during a pre-listing inspection.

Why not? How could you, as pre-listing inspector, hired by the seller, not be responsible?

Marc

[Stephen Lagueux]

Why not? How could you, as pre-listing inspector, hired by the seller, not be responsible?

Marc

That's why any known jurisprudence on the matter would be important here. To know whether the agreement is a contract of service which does'nt garantee results but provides a service or, a contract of result which would expect you to find everything.

[Neal Lewis]

Originally posted by Neal Lewis

Why not? How could you, as pre-listing inspector, hired by the seller, not be responsible?

Responsible for what, Marc?

[Richard Moore]

Originally posted by Neal Lewis

Why not? How could you, as pre-listing inspector, hired by the seller, not be responsible?

Responsible for what, Marc?

Yeah, I don't get that either. I'm no lawyer, but wouldn't there need to be a financial loss by the seller? All I see is a postponement of expenses the seller would have incurred anyway to fix something. Missing the rotted deck during the pre-list might not be the best way of advertising one's expertise but, presumably, the dollar amount to correct it, then or now, is the same.

Now, if you are doing pre-list inspections with the known intent of the report being handed to prospective buyers, then you are opening a whole new can of worms, all just waiting to take a dump on you. Most buyers are smart enough to get their own inspection, but there will be some who will rely on the existing report. It doesn't matter what your agreement states, they didn't sign it, so good luck in court!

I don't do many pre-lists. When I do, it's strictly meant to provide the homeowner with a to-do list, not as a marketing tool. I usually have the client take their own notes. At most I will produce a brief defect punch list. No one is going to want to display that during an open house.

[Jim Morrison]

My policy on this sort of thing has always been: Asking home inspectors for legal advice is an unfailing sign that things are bad and about to get worse. Save yourself while you can and ask a local RE attorney.

[Marc]

Originally posted by Neal Lewis

Why not? How could you, as pre-listing inspector, hired by the seller, not be responsible?

Responsible for what, Marc?

Yeah, I don't get that either. I'm no lawyer, but wouldn't there need to be a financial loss by the seller? All I see is a postponement of expenses the seller would have incurred anyway to fix something. Missing the rotted deck during the pre-list might not be the best way of advertising one's expertise but, presumably, the dollar amount to correct it, then or now, is the same.

Now, if you are doing pre-list inspections with the known intent of the report being handed to prospective buyers, then you are opening a whole new can of worms, all just waiting to take a dump on you. Most buyers are smart enough to get their own inspection, but there will be some who will rely on the existing report. It doesn't matter what your agreement states, they didn't sign it, so good luck in court!

I don't do many pre-lists. When I do, it's strictly meant to provide the homeowner with a to-do list, not as a marketing tool. I usually have the client take their own notes. At most I will produce a brief defect punch list. No one is going to want to display that during an open house.

Sounds like the contract for the pre-list inspection has different language than the one for the pre-purchase. Correct?

Marc

[Richard Moore]

Originally posted by Marc[/br]

Sounds like the contract for the pre-list inspection has different language than the one for the pre-purchase. Correct?

Marc

Most of the language is the same but for pre-lists I add reduced fee options the client can select for abbreviated reporting. Officially they could get a normal report, but by prescreening I have never had anyone take that route. I have a somewhat similar system for pre-offer inspections. I lose a bit of money on these but gain a free evening.

Over the years I have turned down quite a few jobs where it was clear that the objective was a coffee table report for strangers viewing an open house. Maybe there's a bullet proof way to limit liability doing these? I can afford to be selective and just chose not to go there.

[kurt]

Over the years I have turned down quite a few jobs where it was clear that the objective was a coffee table report for strangers viewing an open house.

Yes. I hate pre-listing inspections. I'll do walk and talks, but if someone wants a full write up, I tend to find something else to do.

As for all the legal stuff, don't even begin speculating. It can go every which way depending on a million variables.

[Scottpat]

I'm with Kurt, I tend to be busy if a person wants a pre-listing inspection. But then it is all about managing your clients expectations. Let them know upfront that you are looking for the big items and safety concerns that are Red Flags for potentional buyers and their inspectors.

[Marc]

A pre-listing might not get you in trouble with the seller but if you miss any of several categories of issues, you'd be in hot water with the State Board here. It doesn't recognize any inspection fitting their definition of it other than home inspection. Kurt's walk-and-talk would cost you a hefty fine on the first count.

It's easy for a pre-list inspector to get caught if a pre-purchase inspection follows.

I've much disagreement with our Board.

Marc

[Stephen Lagueux]

Sounds like the contract for the pre-list inspection has different language than the one for the pre-purchase. Correct?

Marc

It has to be different, it's the same job but to a different purpose.There's this new book that just came out here in Qc (french) written by lawyers and it's about pre-purchase inspections, their agreements and jurispridences. After reading it, I found out that many judges will have a different definition of the law when it comes to the agreement. Whether it is a contract of service, as to where the inspector does'nt garantee results or, a contract of result as to where the inspector would be expected to find everything.

Same thing would apply to a pre-list agreement if it ever finds it's way onto a judge's desk. I'll try to find out more by contacting those lawyers. I like to get to the bottom of things.

[Erby]

It's just another of those "if you are not confident in your abilities, stay away" things.

I do them sometimes but charge more for them to answer all the seller's questoins.

[Neal Lewis]

It's just another of those "if you are not confident in your abilities, stay away" things.

Exactly, Erby.

We do a lot of them. Charge top dollar with a report. Very low liability as far as I'm concerned.

[kurt]

Actually, they're relatively low liability. I don't think there's much risk at all.

I just don't like doing them.

[Chris Bernhardt]

I don't like doing them either. Never had a problem. But I feel compelled to document more of the stupid piddly stuff that I would otherwise ignore.

Chris, Oregon

[Mark P]

Not much call to do them around here. I do less then 5 a year. A recent pre-listing customer I had was just happy to know what might come up on the report - he did not fix anything he just wanted to know what he might have to fix. Later on I when I was inspecting the house he was buying he told me the inspector that did the inspection I had pre-inspected did not call out any of the stuff I had told him about i.e replace the plastic dryer vent, no anti-tip on the stove...

[kurt]

Same here. I list stuff that the buyer's inspector never finds or reports. It's part of the silliness, and part of why I don't like doing them.