After a prolonged home search and several negotiations, your first-time buyer clients have just signed an agreement to purchase their first home on the condition of a satisfactory home inspection. After talking to their parents, they are convinced they need to get a sewer, electrical, and foundation inspection in addition to their home inspection! Your first-time buyers tell you they will be booking these extra inspections at the same time as the home inspection. Let us think through the aspects of this all-too-common scenario and how to manage it.
Transparency TrumpsOne of the key reasons we use written contracts is to ensure that the will of the parties involved is captured entirely. In the AREA standard purchase contract, the standard inspection condition says the contract is subject to the buyer’s satisfaction with a property inspection, conducted by a licensed home inspector. When the buyer and seller agree to this condition, there is a clear intention between the parties that a property inspection will take place and the sole inspection will be conducted by a licensed home inspector. In Alberta, home inspectors are licensed by Service Alberta which defines a home inspection as “an opinion as to the condition of a dwelling based primarily on a non-invasive examination of readily accessible features and components of the dwelling.” The clear understanding of the use of the standard condition is that a licensed home inspector will do this specific kind of inspection.
Care and Control As part of the agreement between the buyer and seller, the seller agrees to provide reasonable access to the property for the home inspection. This does not mean you can have a trades person open house for the 3 hours that the home inspector is conducting his inspection without the permission of the seller for such access. When a REALTOR® provides access to a property, that property becomes their place of business and they have all the responsibility of care and control of the property, only permitted to allow such access as has been granted by the seller. The REALTOR® takes reasonable supervision of the property to ensure that nothing is damaged, stolen, or destroyed before they re-secure the property. All liability rests with the REALTOR® when the home is in their control. Granting unauthorized access to anyone is not permitted.
Proper Process So, in the scenario outlined, what is the right process to follow? The buyer wants these inspections, and they need access to the property to get them done, so the only way to facilitate this is to seek the seller’s permission for the additional access. If the additional inspections can be done in the same time frame as the property inspection, and the buyer is paying for them, the seller will commonly not object to allowing them in as long as they do not need to damage anything for the sake of the inspection. This authorization should be given in writing, but the key is to ensure the authorization is obtained before the inspections themselves. It should be noted however that the contract still only stands conditional on the buyer's satisfaction with the home inspection, so although the other inspections were permitted to happen, they are not a valid cause to collapse the contract whatever they may find.
Best Practice Although the scenario for this article was about inspections requested after the contract is signed, it is a best practice to ensure that buyers know the inspections that they could commonly get during the negotiation process. When the buyer determines that such additional inspections are required, they can simply be added as additional buyers' conditions, and the seller is thereby acknowledging the inspections themselves and that the contract is conditional upon their satisfactory outcome.
The elephant in the article of course is the practice of allowing every possible inspection the buyer could ever want during the 3–4 hour period that the home inspection is taking place. This is not anticipated in the contract, not best practice, and could be seen as purposely evasive or deceptive by the seller who may very likely be sitting up the street in their car during the inspection. By clarifying the expectations of the parties in the agreement or at the earliest possible time thereafter, the buyer and seller will both be satisfied that they were well informed by their professional representatives.
Provincial Practice Advisor
Bryan has many years of experience in the real estate industry including over 10 years as a former broker in the Edmonton Region.
Email: firstname.lastname@example.orgPhone: 403-209-3619