In the standard sales agreement there is a “Right to Inspect Property” either by the “Buyer and/or Buyer’s representatives and the inspector (s) shall have the right to enter the Property at Buyer’s expense at reasonable times to inspect, examine, test, appraise and survey Property.”
“Inspector” and “defects” are not defined in the standard sales agreement, however each is defined in an exhibit “Property Sold with the Right to Request Repairs” and “inspector” is defined in the Georgia Code.
From the exhibit Property Sold With Right to Request Repairs:
“Inspector – The term “Inspector” shall mean a person or company with specific, professional expertise in property inspections or in an item, building product or condition contained therein for which the Inspector is inspecting, examining, testing and/or surveying.With respect to inspections for termites and other wood destroying organisms the term “Inspector” shall mean a licensed Georgia pest control operator.
”Defects – The term “Defects” shall mean any infestation by termites, insects or other wood destroying organisms or any condition, building product or item in Property, or portion thereof identified by an Inspector in a written report, which:
(1) is in a condition which represents a significant health risk (including lead-based paint and/or lead-based paint hazards) or an imminent risk of injury or damage to persons or property;
(2) constitutes a violation of current laws, governmental codes or regulations except if it is “grandfathered” because it was initially installed or constructed prior to or in accordance with all applicable laws, codes or regulations; or
(3) is not at the present time in good working order and repair (including damage caused by termites, infiltrating pests, and any other wood destroying organisms), excepting other normal wear and tear.
All parties acknowledge that certain building products are or have been the subject of class action lawsuits and are generally considered by Inspectors to be defective (“Defective Product”).
Notwithstanding the above, all parties agree that if the existence of a particular Defective Product has been disclosed by Seller to Buyer in the Seller’s Property Disclosure Statement prior to Buyer contracting to purchase Property, then that Defective Product, or any portion thereof, as the case may be, shall not be considered to be a Defect if at the time of the inspection it is functioning in accordance with manufacturer’s specifications and is reasonably fit for the purposes for which it was intended.
However, if a particular building product is identified by the Inspector in a written report as generally being a Defective Product and the particular building product is not disclosed in the Seller’s Property Disclosure Statement as set forth above, all parties agree that such a Defective Product shall be considered a Defect which Buyer can request Seller to repair and/or replace.
When booking an inspection, it is import to ask if you are not already asking if the sales agreement is subject to “due diligence” or if a Buyer has the “right to request repairs”. This is not to infer one should write their report differently, but it is important to understand the nuances and that defining a defect is more important in the “right to request repairs agreement” whereas in a “due diligence” agreement one need only state a product is defective.
If you do not ask for a copy of the “Seller’s Property Disclosure Statement” you should start.
An independent Georgia home inspector’s job as defined in the Georgia Code:
“SECTION 1. Chapter 3 of Title 8 of the Official Code of Georgia Annotated, relating to housing generally, is amended by adding at the end thereof a new Article 6 to read as follows:
8-3-330. As used in this article, the term ‘home inspector’ means any person, except an employee of a county, municipality, or political subdivision while engaged in the performance of the duties of his or her employment, who, for consideration, inspects and reports on the condition of any home, or single family dwelling or the grounds, roof, exterior surface, garage or carport, structure, attic, basement or crawl space, electrical system, heating system, air-conditioning system, plumbing, on-site sewerage disposal, pool or hot tub, fireplace, kitchen appliance, or any combination thereof for a prospective purchaser or seller.
8-3-331. Every home inspector shall provide to the person on whose behalf a home or single-family dwelling is being inspected a written document specifying:
(1) The scope of the inspection, including those structural elements, systems, and subsystems to be inspected;
(2) That the inspection is a visual inspection; and
(3) That the home inspector will notify in writing the person on whose behalf such inspection is being made of any defects noted during the inspection, along with any recommendation that certain experts be retained to determine the extent and corrective action necessary for such defects.”
By now you are probably asking, “What’s the big deal?”
- Does your report define “defect”? If not, you should include a definition.
- Citing a code does not necessarily mean there is a defect.
- Safety issues or even potential safety issues should be identified and listed before defects.
- A product involved in a class action lawsuit does not necessarily mean the product is defective.
The Seller in a “due diligence” contract does not have an opportunity to argue or challenge comments in a report when a buyer can walk-away without consequence.
The Seller in a “right to request repair” contract can and most likely will challenge comments, statements or remarks that are not thoroughly and accurately documented. Just to state something does not comply with code is not sufficient if a problem or need for repair is not clearly identified and defined.
Finally, home inspectors who are members of national associations place emphasis on their associations Standards of Practice. Georgia, home inspectors are not licensed, however we do have a code to adhere to. An inspector may not be party to a Real Estate contract however inspectors do provide a professional service to their clients who are a party to a contract. It is up to each of us to provide a thorough and concise report that serves the needs of our clients.