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Reviewing Home Inspection Reports with your Clients

As an agent, your responsibilities extend beyond showing properties.  You are in charge of the (probably) biggest purchase of someone’s life, and that is a heavy responsibility so it is extremely important to see it through to the end, not missing any details.

There was a court ruling in January 2011 regarding a 2006 purchase of a house, where the home inspector was found 50% liable, the agent 25% liable, and the purchaser 25% liable.  The plaintiff and purchaser, Glenda Halliwell, sued her agent and brokerage, her home inspector who was recommended by her agent, and the seller.  Here is her story.

One of the clauses in the agreement was a home inspection, which was waived after the home inspector found no major issues with the house.  Four months after the inspection, the house was showing signs of mould, rot, rust, drywall issues, and moisture.  The problem lies in that the agent did not thoroughly review (or even read) the inspection report with the client and simply approved that the clause can be waived, trusting the inspector.  The buyer was particularly concerned with mould due to her allergies, and was assured by the home inspector that there were no concerns in that house for moisture penetration.  The summary of major defects failed to include obvious damage to the parging on the exterior wall at the driveway and the driveway surface was missing an 18-inch strip of asphalt along the exterior wall of the house, both of which were highly relevant in assessing moisture penetration.

In short, there were no signs of moisture penetration but seeing as the purchaser made it clear that mould is her main concern because of her allergies, the inspector fell short in advising her of the potential of moisture penetration, and the agent simply assumed it was the inspector’s responsibility and so did not read the report.

To protect yourself from potential issues (and prevent getting sued), ensure you cover all the bases before, not after, this kind of thing happens to you.  The time and effort you put into it will not only protect you from long-term and costly damage, but result in a positive relationship with your clientele.

The same applies to sellers’ agents.  Cover all the bases!  If you are representing a seller, ensure that everything that may potentially cause problems in the house is disclosed.  Note that the sellers were not found liable in the discussed case, but ONLY because they actually had no idea about the issues in the home.  If you or your client know of existing issues… disclose!

To view the actual ruling, click here or copy and paste the URL into your browser:  http://www.canlii.org/en/on/onsc/doc/2011/2011onsc390/2011onsc390.html

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