Article: Who can sign my pre-inspection agreement?

[InspectorPro Insurance]

Hi TIJ readers!

Recently, a home inspector asked us: 

"I have a real estate agent that sometimes pays for their clients' home inspection and also signs the pre-inspection agreement. If the buyer made a claim, would the insurance company defend me even though it was the real estate agent was the one who paid for the inspection and signed the agreement?" 

We’ve received questions like this numerous times. So, we decided to dedicate our latest article to addressing that question. See an excerpt below.

Enjoy!

Stephanie

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Who can sign my pre-inspection agreement?

Two years after the inspection, a multi-inspector firm received a county court summons. Within the summons, the inspection company’s former clients made a litany of allegations:

• Termites occupied multiple areas on the first floor, including the garage.
• One of the anchor plates on the basement wall was “moldy musty.”
• The bottom of the heating unit was rusty.
• Water wasn’t draining properly.
• There’s evidence of multiple previous fires.
• A master bedroom window refused to open due to foundation sinking.
• Other windows were letting water intrude into the house, subsequently rotting the floor below.
• There were four cracks “around the house.”
• The inspector didn’t use the correct tools for his roof inspection.

To cover the supposed damages, the claimants demanded over $100,000, plus whatever additional costs the claimants incurred during the lawsuit. In their contract, the inspection company had a limitation of liability clause to put a cap on its financial responsibility for missing or omitting defects. But there was one problem: The clients never signed the pre-inspection agreement.

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In order to adequately protect inspectors against claims and preserve insurance coverage, inspectors must get their agreements signed prior to the inspection 100 percent of the time. (Hence the “pre” in pre-inspection agreement. Learn more about the legal reasons why contracts need to be signed prior to inspections here.)

....

But who can sign your pre-inspection agreement? And who should? Read the full article to find out.

[READ MORE]

[Les]

thanks for the information.  However, I think we have to be mindful about the topic.  Insurance coverage and legal indemnification are not synonymous.  I am sure you agree that everyone must read and understand what their coverage is and establish a good working relationship with there insurer. 

Thanks for your input on this board, we all have learned "stuff" from your participation!

[Jim Katen]

Thanks for the article, Stephanie. 

I've got to admit, though, that I'm kind of stunned that this kind of discussion is still going on in 2019. I can't even imagine running a home inspection business in the 21st century where I would not have an inspection agreement signed in advance. Who the heck are all of these inspectors who don't get this? Are they the same ones who are writing their reports on carbon paper? 

[John Kogel]

Foreign buyers leave it up to their realtor on this side to take care of the inspection, and sometimes they don't even come to see the house.

Even so, the best advice is to refuse to inspect until the contract is read and signed by the buyer. It is  even more important to get that signature when you don't meet the buyers face-to-face.

[Jim Katen]

I've had lots of customers who didn't attend the inspection and several who have never even seen the house. All of them provided me with a signed contract well in advance of the inspection. 

*Anyone* buying a house has already had to sign several documents before even calling for an inspection. They can manage to sign an inspection agreement as well. 

[InspectorPro Insurance]

Sorry for taking a while to get to these comments! I've been on the road quite a bit this month, so I haven't been as diligent about checking the forum!

On 3/8/2019 at 4:30 AM, Les said:

thanks for the information.  However, I think we have to be mindful about the topic.  Insurance coverage and legal indemnification are not synonymous.  I am sure you agree that everyone must read and understand what their coverage is and establish a good working relationship with there insurer.

Great point! While I try to make the info in the articles as generic as possible so that it can apply to as many insurance carriers as possible, every insurer has a different set of rules. So, it's important that inspectors know what their insurance companies say about contracts and other policies.

In addition, what works for your insurer may not work for your state or for other laws. A good example of this is independent contractors. At InspectorPro, we don't care if you 1099 your workers so long as they abide by the same standards. However, the IRS does!

On 3/8/2019 at 7:12 PM, Jim Katen said:

I've got to admit, though, that I'm kind of stunned that this kind of discussion is still going on in 2019. I can't even imagine running a home inspection business in the 21st century where I would not have an inspection agreement signed in advance. Who the heck are all of these inspectors who don't get this? Are they the same ones who are writing their reports on carbon paper? 

We've always required signed pre-inspection agreements, but we started making it more apparent in our paperwork around 2016. Back then, we probably got at least one call a day from inspectors that were upset it was a requirement. Now, we get maybe one call every other week about it.

However, we still get plenty of claims in which the inspectors didn't get the agreement signed ahead of time. I think some of them are residual from back when we weren't banging everyone over the head about pre-inspection agreements. Then, there are others that just cave to really pushy clients or agents. In my experience, the inspectors that don't get their agreements signed are rarely doing it because they're old school or arrogant or misinformed. It's usually guys who get tired of fighting an aggressive client or agent and say they'll make an exception just this one time.

[Chad Fabry]

On 3/8/2019 at 10:12 PM, Jim Katen said:

Thanks for the article, Stephanie. 

I've got to admit, though, that I'm kind of stunned that this kind of discussion is still going on in 2019. I can't even imagine running a home inspection business in the 21st century where I would not have an inspection agreement signed in advance. Who the heck are all of these inspectors who don't get this? Are they the same ones who are writing their reports on carbon paper? 

What's carbon paper?