Sharing Reports: More Liability?

[hausdok]

Q: Can sharing a home inspection report with other persons who aren’t his/her clients open an inspector up to more liability?

A: According to Barry Stone, in an April 8th column in the Washington Post, it can.

Read More…

http://www.washingtonpost.com/wp-dyn/co ... 00804.html

[n/a30]

And the answer is YES.

Realtors want copies of recent reports to hand out to the public. They file them away and disclose what they please based on personal preferences. They also use the reports to judge which inspector will be likely to be a “good inspectorâ€

[MelB]

I had a similar situation, where the same realtor was representing another buyer on a house I had already inspected. When the realtor pushed for a copy of the report for the second buyer, I went through my report, and removed the names and addresses. I sent it to the realtor in an email, as a 'sample' report from my company. There was nothing in the report that said it was for that particular house, or for any particular buyer, so I'm pretty sure I'm safe. Any thoughts?

[Bill Kibbel]

"I sent it to the realtor in an email, as a 'sample' report from my company. There was nothing in the report that said it was for that particular house, or for any particular buyer, so I'm pretty sure I'm safe. Any thoughts?"

Yeah. It doesn't smell right and I would never, ever do that. That second buyer needs to hire an inspector to do an inspection and write a report for HIM/HER. That report, even though it has been slightly altered, was contracted and payed for by the first buyer. It's his/her property.

When I get asked about a second report, I tell them they MUST get their own inspection and I won't do it a second time unless at least a year has passed since the first one. I don't want anyone getting the impression that the second inspection is a just a walk-through to point out what I found the first time. The buyers always completely understand my reasoning and then ask for a referal for another inspector.

That's my thoughts.

[hausdok]

Yeah,

He's the same realtor and he knows that it's the same report - even with the critical information blacked out. If anything ever goes wrong with that house and they start screaming, he's going to be complainant's witness #1 when they sue you in court.

Besides, why would you want to give your work away for free? Because it's a client of the same realtor on the same house? Did the realtor suggest that? Phooey! I would have asked the realtor if he would waive his commission if a different customer bought that same house and used him as the selling agent. Don't be a sucker. You're in business to feed your family and you can't do that by giving your work product away.

I never get requests like that because I work my way through the pre-inspection agreement with the client before every inspection and make absolutely certain that the realtor is listening too and that they (the customer) understand everything in it before I begin.

When it comes to the 3rd party liability clause, here's what I tell them (paraphrased):

"This is the 3rd partly liability section. Make sure you read it very carefully. Basically, it says that this report is done for you and is to be used for your transaction only.

The fee you pay me compensates me for the time it takes me to inspect this home and prepare the report, it does not entitle you to distribute the report freely to third parties because it is my copyrighted work product.

You can share the report with your realtor and, if necessary, share portions of the report with the seller, but what you can't do is give/trade/barter or otherwise distribute it to anyone that will rely on it to purchase this home.

When you sign this agreement this section says that you are agreeing to control distribution of this document. If you walk and another buyer wants to purchase this home and wants my report, he/she can hire me and then stand here and listen to this briefing and read, agree to, and then sign his/her own copy of this agreement, after which I'll do another complete inspection for them and produce a completely new report for them. Otherwise, they have no right to my work."

Sometimes briefing them about the PIA takes a lot of extra time, but so far in 10 years I've never been sued or have even had to sit down to an arbitration table, so I plan to keep on doing it.

ONE TEAM - ONE FIGHT!!!

Mike

[kurt]

I do the same as Mike, although my restriction is stated in about 2 lines.

Very bad business, having your reports shuffled about by morons.....

[n/a30]

It is no secret that real estate agents and brokers use our reports without our permission and try to make the information in them into public domain documents. They don't pay for that assumed “rightâ€

[hausdok]

Al said,

We can do little to stop agents from making our reports distributed as public domain without also changing the legal and government system that lets them steal intellectual property on a daily basis.

Hi Al,

I dunno, I think that the appraiser in the example below will disagree greatly with that statement and I think his case has set some pretty good precedent for us to protect our copyrighted products.

http://www.tijonline.com/forum/topic.asp?TOPIC_ID=2540

ONE TEAM - ONE FIGHT!!!

Mike

[n/a30]

Subject: Propitiatory Protected Documents

(All my verbiage is intentionally copy rights reserved)

In practical terms we have little control over our reports once they are handed over to the client. Reports travel often with the assistance of real estate agents who have very vested interests and entangling alliances.

A precedence setting court case and some legal legwork and state or federal enforcement that actually has some teeth is needed. You can't expect corrupt people to change habits without some deep healing medicine. How many inspectors have sued agents for illegally copying reports? My guess is "zero". Who is first brave soul to file a civil action?

[Les]

Most of you know I spend a good bit of time looking at other inspector's reports and giving my "world famous opinion".

The data in the report does not belong to you. The report, if narrative, does belong to you. The process for preparing the report belongs to you. Once you agree to perform the inspection and insert data and prepare a report, the actual document belongs to the client. The use of that report/document still belongs to you. There is nothing "propriatary" about it except if you designed your own software or forms - then it is.

Kurt is on the right track with something very direct and simple "This inspection and report is for your use only and no other party may rely upon it" Anything more, within reason, will just get you into trouble.

Yes, I have sued a real estate agent for improper use and benefit. Won. Sued client for selling my report - won. Sued a third party for using my report - lost. I did not have any legal standing in that transaction and was not injured.

It ain't simple!

[Bain]

Les, what relief were you seeking? How did you claim or demonstrate that you or your company were injured?

[swarga]

Who is first brave soul to file a civil action?

No Civil action but I did file a ethics complaint with the AZ Department of Real Estate (ADRE)against an agent for doing it. Just for good measure I added the broker in the complaint.

The broker fired the agent then paid his clients the money they needed to pay me to come back to the house and inspect it again.

I got paid, wrote a new report, then dropped my complaint. The ADRE did not drop it and disciplined the now unemployed Realtor.

Cool.[]

[Jeff Beck]

Does anyone else use a Summary Report for the real estate agent and the attorney?

My Summary Page outlines the Safety Hazards, Items not Operating, Defective items needing immediate repair, and marginal items or items that have exceeded the useful life according the manufacturer.

Even though I have copy write notices in the report and the inspection agreement, I know that some people will assume that this verbiage is boiler plate and doesn't apply to them.

The idea is not to tempt honest people.

[n/a30]

Jeff, I don't use a summary page. I let the client determine what is important to them with their own set of priorities and values. I could try and lead them to my values but in the end it is their call as to what takes precedence in relation to repairs and their costs. For example: Often I see very poor drainage and grading that can cause serious problems, yet few homeowners think it is important enough to fix until it too late.

As far as I am concerned the client does not have to prove anything to the seller via a report. The seller can on their own (re)negotiate based on the general information I give them. If a problematic exists it may or may not be a deal breaker based on the extent of the problem, the desire to have it fixed and how the buyer wants to address it. However they justify any judgments on their part is in part based on the inspection and in part based on the client’s personal needs.

When a third party views a report they only get a small glimpse of the property conditions and thus have a limited view of the situation that is colored by their on separate perspectives and needs.

If the seller accepts a downwardly adjusted sales price then might be a side effect of the inspection. The inspection report can and is often used as a negotiation tool but that is not the intent of the report or the inspection. I just don't want my work illegally duplicated and distributed for free without my expressed content. It is important to control the report to the point that it does not become misused. Agents (and sometimes buyers and sellers) use the reports far too often in less than honorable ways.

[n/a30]

Working RE magazine has a number of articles on this subject as it related to apprasers.

The latest is entitled Copyright Controversy Flares up (again). The weblink for the mag is www.workingre.com

I believe the subscription is free as supported by ads. There is a small general section related to the inspection industry included.

[Editor]

Hi Al,

That generates a log-in box and subscription cost notice for me. That's OK, David Bauner, Working RE's Editor, is one of TIJ's sponsors, I'll see if I can get the article and post it. Thanks for pointing us to it.

ONE TEAM - ONE FIGHT!!!

Mike

[n/a30]

If anyone is interested the telephone number for the Working RE mag is 888-347-5786. The last I heard the subscription was free.