Property Inspections

October 2009
By James L. Goldsmith, Esquire

We are all familiar with the benefits of having a home inspection and we anticipate that a home inspection will be part of every residential transaction. Whereas years ago inspections were not the norm, now we question whether a home inspection is enough. The expertise of home inspectors varies, but many are generalists. Certainly the home inspector should possess the qualifications required by the Pennsylvania Home Inspector Law. But even a qualified home inspector may not have the expertise to identify all conditions. A well-trained inspector may issue a report suggesting that further evaluation be considered. Taken lightly, these recommendations may return to haunt the buyer and the buyer's agent.

Home inspections should be conducted as early as possible in the home-buying process. If a buyer has 15 days to perform a property inspection, see to it that the inspection takes place within the first several days of the contingency period. When the report is issued, it should be carefully reviewed by the buyer and buyer agent. Where additional investigation is encouraged, the agent should underscore that advise for the benefit of the buyer. Remember, the property inspection contingency in the Pennsylvania Association of REALTORS®' Standard Agreement does not limit the buyer to one inspection!

There is no reason not to engage a specialist to conduct a specific inspection limited to an area in question. For example, if the home inspector questions the integrity of the roof and suggests further evaluation, consider hiring a roofer. A roofer, or any other professional who is called upon to inspect only one facet of the property, is not required to be qualified under the Pennsylvania Home Inspector Law. A contractor with specific expertise in a single area is likely to provide a more thorough analysis than the home inspector, who is a generalist.

Arranging for home inspections that allow time for follow-up evaluation will help you avoid disappointed buyers and lawsuits. Suits can also be avoided by assuring that follow-up evaluations are performed by persons with the appropriate expertise. Suit was recently filed in a case where the lender requested that buyer furnish a report as to the structural integrity of the property. Apparently an earlier home inspection suggested that there might be a problem. The buyer agent selected a home inspector to evaluate the structural integrity of the property for purposes of reporting to the lender. The lender was satisfied with the home inspector's report indicating that no problem existed. After settlement, problems arose and were traced to a compromise in the structural integrity of the property. Apparently the home inspector missed something.

Had the buyer agent selected a structural engineer, the problem may have been detected or the buyer agent may have avoided liability by having chosen an appropriately qualified professional.

home inspection conducted early in the inspection contingency period should be a standard. Subsequent evaluations and additional inspections should be considered anytime a question is raised by the original home inspector, the lender, a municipal inspector or by any other source. Contrary to a popular presumption, the property inspection contingency of the Agreement of Sale is hardly limited to a single home inspection. Take advantage of this very liberal due diligence clause to assist your buyers in uncovering latent defect and in protecting yourself from suits from unhappy buyers.

Mr. Goldsmith is an attorney with Caldwell & Kearns and serves as general counsel to PAR. A substantial portion of his practice is dedicated to providing advice and counsel to real estate licensees and representing and defending real estate salespersons and brokers in civil lawsuits and licensing claims across the Commonwealth. He routinely counsels employers on employee relations issues as one of the voices of the PAR Legal Hotline. He may be reached at realcompliance.com.