Inspection Liability Buyers, Sellers Should Understand Inspection Contracts

Though the legal clauses of a home inspection contract can seem complex, they are designed primarily to minimize the inspector's exposure to general liability as well as to prevent frivolous lawsuits. Inspection contracts typically explain which items are excluded from the inspection - most commonly termites, engineering standards, geological stability, environmental hazards, zoning designations, lot line placement, low voltage electrical equipment, product recalls, and anything not readily visible.

Some contracts also specify a maximum liability amount - usually a refund of the cost of the inspection - though many inspectors do not include a limit because their insurance offers sufficient coverage. Moreover, inspection contracts often stipulate that disputes will be resolved through mediation or arbitration to avoid costly and time-consuming lawsuits. They also often spell out the statute of limitations in a specific time frame.

Homebuyers and sellers should be aware that such contracts are not a reflection on the quality of an inspection but are simply there to protect the inspector from legal challenges. Even so, they should make sure that they hire a competent, qualified inspector and read the contract thoroughly or have it reviewed by an attorney.

Understanding the Inspection Contract, Inman News Features Online (04/09/02); Stone, Barry. Abstracts Copyright © 2002; Information Inc., Bethesda, Md.