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Your inspector’s job — little known facts |
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Did you know it is illegal for an inspector to also perform any repairs on a property on which he performed the inspection? CA AB 1357 states: “7197. (a) It is an unfair business practice for a home inspector, a company that employs the inspector, or a company that is controlled by a company that also has a financial interest in a company employing a home inspector, to do any of the following: (1) To perform or offer to perform, for an additional fee, any repairs to a structure on which the inspector, or the inspector’s company, has prepared a home inspection report in the past 12 months.” This also applies to SB 326 & SB 721 (decks and balconies) inspections.
Did you know that it is illegal for an inspector to reward or compensate a real estate agent in any way for referring the inspector? CA AB 1357 states: “7197. (a) It is an unfair business practice for a home inspector, a company that employs the inspector, or a company that is controlled by a company that also has a financial interest in a company employing a home inspector, to do any of the following:
(3) To offer or deliver any compensation, inducement, or reward to the owner of the inspected property, the broker, or agent, for the referral of any business to the inspector or the inspection company.” In case any of you wonder why we don’t send gifts for Christmas or any other occasion.
Did you know that it is illegal for the inspector’s payment to be dependent on escrow closing? CA AB 1357 states: “7197. (a) It is an unfair business practice for a home inspector, a company that employs the inspector, or a company that is controlled by a company that also has a financial interest in a company employing a home inspector, to do any of the following:
(4) Accept an engagement to make an inspection or to prepare a report in which the employment itself or the fee payable for the inspection is contingent upon the conclusions in the report, preestablished findings, or the close of escrow.” Although the inspector getting paid doesn’t have to be dependent on escrow closing, it’s still a conflict of interest. An inspector should not be concerned with escrow closing and that’s why so many inspectors won’t allow payment through escrow.
Did you know that the only legal requirement of an inspector is to identify and note defects which significantly affect the value, desirability, habitability or the safety of the dwelling? CA SB 258 states: “(b) A “material defect” is a condition that significantly affects the value, desirability, habitability, or safety of the dwelling. Style or aesthetics shall not be considered in determining whether a system, structure, or component is defective. (c) A “home inspection report” is a written report prepared for a fee and issued after a home inspection. The report clearly describes and identifies the inspected systems, structures, or components of the dwelling, any material defects identified, and any recommendations regarding the conditions observed or recommendations for evaluation by appropriate persons.” Fortunately, inspectors usually go well above that minimum standard! |