Home inspectors and real estate agents often find themselves in a delicate dance, striving for a successful working relationship. While most real estate agents and home inspectors work well together, there are times when conflicting interests and potential liability concerns can arise. In this two-part series, we aim to help home inspectors feel more confident in their interactions with real estate agents. In this second installment, we will address some of the liability concerns that inspectors may face when accessing properties independently, dealing with pre-inspection agreements, and sharing reports. We will also explore how inspectors can protect the real estate agents who refer them.
Accessing Properties Independently: Supra Real Estate Keys Some states allow home inspectors to use digital keys and scheduling services like Supra, ShowingTime, and BrokerBay to access properties independently. While this can be convenient, it raises questions about liability. Here's what you need to know:
Digital Footprint: These electronic access tools record each use and the person who uses them. This digital footprint can be both helpful and potentially harmful in the event of a claim. It can provide evidence of when you entered and left a property.
Protecting Yourself: When using these tools, take the same precautions you would when working with a realtor present. Ensure you lock up the property correctly to prevent property damage or injury claims. Your inspection report should reflect the start and end times as recorded by these tools.
Realtors Signing Pre-Inspection Agreements Realtors can sign pre-inspection agreements on behalf of their clients, provided they have limited power of attorney. This legal concept ensures that the realtor's signature carries the same weight as the client's. Here's why this is important:
Client Agreement: Your contract is an agreement between you and the client who requested your services. With limited power of attorney, the realtor can sign the agreement on behalf of the client.
Protection: In cases where the authorized agent signs on behalf of the client, this arrangement helps avoid situations where clients later claim they never officially agreed to the contract terms.
Ensure Authorization: Before allowing a realtor to sign on the client's behalf, confirm that they have the authority and permission from the client. Ask the realtor to indicate "Authorized Agent" below their signature and provide a copy of the agreement to the client.
Check Insurance Policy: Make sure your insurance policy allows authorized agents to sign. If you're insured by a provider like InspectorPro, this is permitted, but always verify with your insurer.
Sharing Reports with Realtors: A Risk to Avoid It's generally discouraged for home inspectors to share inspection reports with anyone other than the client. There are two primary reasons for this:
Client Ownership: The inspection report belongs to the client, not the realtor. Sharing it with the agent can lead to potential complications.
Outdated Information: If the agent has access to the report and the deal falls through, they might share the outdated report with someone else. This could lead to misunderstandings and potential future liability for the inspector.
Protecting Referring Realtors with Referring Party Indemnification Home inspectors and real estate agents both face the risk of claims related to inspection findings. To ease realtors' concerns, home inspectors can offer referring party indemnification. Here's how it works:
Coverage for Realtors: Referring party indemnification provides coverage to both the home inspector and the referring realtor if a client files a claim related to a home inspection. This coverage defines the agent as a "limited additional insured."
Limited Scope: It's essential to clarify that this coverage does not extend to lawsuits related to the realtor's duties as an agent, only claims arising from the home inspection.
Marketability: While ideally, you may never need to use referring party indemnification, it can serve as a valuable tool to enhance your relationship with real estate agents.
Navigating the complex landscape of liability concerns and relationships in the home inspection industry requires diligence and a clear understanding of the legal and ethical aspects of the business. By addressing issues related to accessing properties, pre-inspection agreements, report sharing, and offering referring party indemnification, home inspectors can foster positive relationships with real estate agents while protecting their interests and managing potential liabilities. Building trust and effective communication with agents who value thorough reporting and prioritize their clients' well-being is key to a successful and harmonious partnership in the real estate industry.
When it comes to your home inspection needs, you want to make sure you're working with a company you can trust. That's where we come in! Our licensed professionals have been trained to thoroughly inspect all areas of your home, since 1994. With our expertise, you can feel confident that you're making a smart decision about your new home. So why not give us a call today to schedule your home inspection?? For more information on home inspections and how to get ready for them, contact Bryan & Bryan today at (866) 484-8318 to schedule an inspection. We provide other inspections such as pest control services, stucco services, sewer scopes, irrigation inspections, and more.