Contract

[Tom Rees]

I am looking for a good downloadable contract. I am currently using ITA standard contract and am looking to see what else is out there. Thanks. :D

[Matthew Barnicle]

When I first started, I reviewed 10 different agreements from different companies. I came up with what is attached. I had it reviewed by an attorney (for whatever that is worth). I welcome anyone to critique it.

[Tom Rees]

Thanks Mathew.:D

[Matt Fellman]

Every area/state has different things they look for and like-dislike in HI contracts. The best thing you can do is spend some time researching your areas trends.

After a quick glance the contract looks like many others out there. My state has a particular preference for LOL (limiation of liability) clauses that are set apart from the other text and are initialled or signed separately. The bold is good. You might consider a bigger font size and and/or a set of initials directly beneath that paragraph.

Again, it's a regional thing... just my $.02

[Tom Rees]

Thanks Matt.:D

[Scott Patterson]

My contract/agreement is on my site if you want to take a look or steal whatever you want. It is a simple contract that gets to the point and is easy to read and understand. Keep in mind that a contract is really just a bluffing tool that has a good chance of being ignored by most attorneys. If you screw-up, and most of us will in our professional lifetime a contract will not help very much.

http://www.traceinspections.com/TN%20Inspection%20Agreement.pdf

[Tom Rees]

Thanks Scott.:D

[Mitchell Meeks]

<Quote ...The customer agrees
and understands that the maximum liability incurred by The Inspector/The Company for errors and
omissions in the inspection shall be limited to the amount of the fee paid for the inspection..>

Scott, thanks for the contract info. I am still working on mine and while I have similar language I am curious if this particular statement has come back to haunt anyone? Also how often?

I do not want to do inspections for free. While I feel that I may miss something, they are getting a wealth of other information. Why should I give that away for free?

[Jim Luttrall]

Mitchell, I think the key here is that you are TRYING to get the customer to agree that you won't owe them any more than the inspection fee charged if you screw up. Most states won't allow this from what I have heard, so some contracts put in treble (sp?) damage clause (3 x the fee) to try and allow more compensation but still keep the damage limit within reason.
If you go to court and it is not a reasonable limit, your chances of having your limit and contract thrown out increase.
Any limit you can put in your contract would likely be more palatable than the judge or jury's amount if you screw up.

[Matt Fellman]

Lots of case law out there on this stuff... again, a lot varies by area. Generally, any less than the fee is laughed at as being way too favorable to the inspector. What's the motivation for an inspector to try hard if the most he stands to lose is 1/2 his fee? This means just for showing up and wandering through a house you're guarenteed half of your fee.

The full fee LOL is the most common and makes the most sense. We're not in the business of offering insurance policies on houses. We couldn't make money for what we charge if we did. Therefore, we can't have more to lose than what we made in the first place.

To the earlier poster worried about giving back too many fees..... if you have more than a couple in a thousand asking for their fee back you're in the wrong biz.

I've asked the exact question hinted at here of every attorney i've met at educational conferenes.... does it make sense to up the LOL to 3X the fee or $1,000 so we have more at stake? All have said it really doesn't matter. The advice I've received has been to leave it at the fee of the inspection.

As eluded to by Scott, this is all assuming we're operating by the terms of the contract. Keeping in mind this country is basically ran by lawyers. We get to pay them 100's or 1,000's of dollars to write us a contract and then we have to pay 1,000's for them to tell us why it doesn't stand up.

Back to the regional stuff.... everywhere has different ways of handling disputes. There's a couple rules I was taught early on that are worth remembering:

When in a dispute, the early money is the best money. Meaning if you mess up, realize it and pay for it quickly. Often paying even when you're not really wrong. Sometimes it's worth just being done with.

Don't ignore people. Whenever a problem arises get back on-site asap. Take lots of pictures and try to not discuss fault or blame if possible. If you have a multi inspector company or a biz partner try to have someone other than the original inspector go back. It's just easier to be objective if you're not defending your work.

In the end the best way to stay out of trouble is to leave people with a feeling that you are competent and did your best. Of course the best way to convince people of those two things is to be competent and to really try your best. I've found that people are far less likely to come after you if they respect you and think you did your best.

Sorry for the long rant.... ;)

[Mitchell Meeks]

I have been putting off doing some contracts for a while now. I have gotten my Level 1 Thermographer and I am thinking about marketing that more than home inspections. If the case should be then I will do home inspection and hopefully a thermal scan. I have developed a thermoscan contract. Should I keep them separate or just have an addendum on the inspection contract if they want it?
I am more interested in energy scans and consulting than just regular home inspections. Thoughts anyone?

[Matt Fellman]

Pretty much anything seems more profitable than inspections lately... Or, at least if I had another spin or something developed I would certainly be marketing that as well. People aren't buying houses as quickly as before but heat loss is always occuring. :)

[Tom Rees]

Mitchel, Visit this site for Thermography forums: Infrared Thermal Imaging Network™ - Home (http://www.itinetwork.net/) :D

[JB Thompson]

I am looking for a good downloadable contract. I am currently using ITA standard contract and am looking to see what else is out there. Thanks. :D

Tom, I don't know if you're a member of NACHI, but they have a pretty good contract that you can use. I did doctor it a little for Texas, but it's only 1.5 pages long.

[Mitchell Meeks]

Mitchel, Visit this site for Thermography forums: Infrared Thermal Imaging Network™ - Home (http://www.itinetwork.net/) :D

Thanks Tom. I have this site in my bookmarks but I have not seen much activity in it lately. I would say InterNachi probably has the most active side for thermography. Another one is IRTalk.com

[Tom Edwards]

Copied from the Inspection Agreement submitted on this post: LIMITATION OF LIABILITY: ANY LIABILITY OF THE INSPECTION COMPANY AND THE INSPECTOR FOR MISTAKES OR OMISSIONS IN THIS INSPECTION REPORT, THE INSPECTION AND OTHERWISE IS LIMITED TO A REFUND OF THE FEE PAID FOR THIS INSPECTION AND REPORT. THE CLIENT ASSUMES THE RISK OF ALL LOSSES GREATER THAN THE FEE PAID FOR THE INSPECTION. THE CLIENT AGREES TO IMMEDIATELY ACCEPT A REFUND OF THE FEE AS FULL SETTLEMENT OF ANY AND ALL CLAIMS WHICH MAY EVER ARISE FROM THIS INSPECTION.
__________________________________________________ ____
I know that I am swimming against the tide to say this but I think that professionals should get away from this type of language in their service agreements. If you are a professional you should be willing to be held responsible as a professional. To ask a client to trust you to evaluate their prospective home's systems and then weasle on the limit of liability is less than professional gentlemen. They are trusting you for thousands of dollars worth of equipment functionality and you only agree to give back the fee?

We need to stop thinking like tradesmen (who give back the fee) and start acting like professionals who are willing to be held responsible for our work.

You should really think about it.

[Mitchell Meeks]

Copied from the Inspection Agreement submitted on this post: LIMITATION OF LIABILITY: ANY LIABILITY OF THE INSPECTION COMPANY AND THE INSPECTOR FOR MISTAKES OR OMISSIONS IN THIS INSPECTION REPORT, THE INSPECTION AND OTHERWISE IS LIMITED TO A REFUND OF THE FEE PAID FOR THIS INSPECTION AND REPORT. THE CLIENT ASSUMES THE RISK OF ALL LOSSES GREATER THAN THE FEE PAID FOR THE INSPECTION. THE CLIENT AGREES TO IMMEDIATELY ACCEPT A REFUND OF THE FEE AS FULL SETTLEMENT OF ANY AND ALL CLAIMS WHICH MAY EVER ARISE FROM THIS INSPECTION.
__________________________________________________ ____
I know that I am swimming against the tide to say this but I think that professionals should get away from this type of language in their service agreements. If you are a professional you should be willing to be held responsible as a professional. To ask a client to trust you to evaluate their prospective home's systems and then weasle on the limit of liability is less than professional gentlemen. They are trusting you for thousands of dollars worth of equipment functionality and you only agree to give back the fee?

We need to stop thinking like tradesmen (who give back the fee) and start acting like professionals who are willing to be held responsible for our work.

You should really think about it.

Tom, I must say that i disagree. I consider myself a professional in inspections and contracting and a lot of other things I do, but I can make a mistake. With inspections, as you know, there are a number of components that have to be checked and with distractions there is a possibility of missing something. There is also a possibility of just missing something because you forgot to go back and look at it or something was OK that day but now the next.
There was a case of my CE instructor who went and did an inspection one day. The buyer bought the house and and a fews later the inspector received a call that a window was messed up. He went right on over there and after looking at it, he realized that when the sun hit the glass a certain time of the day it caused condensation between the panes of glass. Something he did not see when he was there the first time. He offered to refund the inspection fee. I do not feel that he should have offered nor should he have done it in the first place. That has nothing to do with professionalism, but unfortunately lawyers and the general public look after someone to start blaming regardless of what the problems are. Especially when they find out who has the deepest pockets.

[Tom Edwards]

Thanks for the friendly reply.
I was a little concerned that I might get blasted for my remarks.

I see your comment and understand your concern regarding liability for "unknowns" as you decribed your Instructor's experience.
I explain to my clients in my report that the "view" on insulated windows, as an example, can change daily due to temperatures and the angle of the sunlight through the panes. I make my statement in my report and that settles it. There may have been others that were "fogged" but they "did not present" during the inspection. Try thinking about your inspection as a doctor might during a "physical exam" for a patient. I think it might help you with the concept of liability and what "presents" during the "exam".
Having said that....I am looking for the day when "fee return" language in an inspection agreement will be rejected "out of hand" by even the least savvy homebuyer.
This profession will never get out of the blue collar era as long as we act like blue collars.
I place no limitations on my liability to my client.
I have studied the issue quite thoroughly attempting to view it from both sides. No merchant can stay in business very long by "giving the store away" each time someone complains about the service. I believe I have positioned myself and my service in an equitable position with my client. I provide a valuable service and charge all that I feel I can in my market. I place some liability on my client to read the report and follow up on all my recommendations prior to purchase knowing that there may be further discoveries made "prior to purchase" that aids my client in his decision to buy.
Placing a limitation on your liability just defines how you view your own abilities. If you believe yourself to be a professional "worthy of your client's trust" I would rethink it.

[Tom Edwards]

With inspections, as you know, there are a number of components that have to be checked and with distractions there is a possibility of missing something. There is also a possibility of just missing something because you forgot to go back and look at it or something was OK that day but now the next.
he realized that when the sun hit the glass a certain time of the day it caused condensation between the panes of glass. Something he did not see when he was there the first time.

I wanted to expand my remarks a little.
Please don't think that I am judging your professionalism as an inspector.
I do not know you well enough to do that.
My remarks are only to state that "professionals are willing to be held responsible for their work". Simply stated.
No one can give away the store at every complaint.
The true answer is to inform your client more fully as to the limitations on the inspection and how certain systems are dynamic in nature and changes are likely.
I do not promise perfection but I make an attempt at it as best I can each try.
In the end, I am willing to be judged by my peers (a home inspection arbitrator) but only after my client has fully stated their claim against me in writing so that I am not responding to shadows on the wall.
Licensing, in my view, has helped this profession in states where it has been applied with due consideration.
The public is becoming smarter and there will soon be a time when a "weasel clause" will not be acceptable to the homebuyer because they will have read about it or heard about from others.
To be regarded as a professional you must be willing to be held responsible for your work.
Who would visit a doctor or any other professional who placed a sign in his office that stated that their "liability is limited to the fee paid by the client"? My wife is an RN, my sister a CPA and neither would think of doing so. Of course, an RN can't open their own shop anyway. But what MD would do that?
The answer is to more fully explain the limitations to a home "exam" and how it may change from the inspection event. Informing the client of their contractual responsibilities regarding the report is the second part. It is equally important. Most HI's never think of doing that.

[Mitchell Meeks]

I wanted to expand my remarks a little.
Please don't think that I am judging your professionalism as an inspector.
I do not know you well enough to do that.
My remarks are only to state that "professionals are willing to be held responsible for their work". Simply stated.
No one can give away the store at every complaint.
The true answer is to inform your client more fully as to the limitations on the inspection and how certain systems are dynamic in nature and changes are likely.
I do not promise perfection but I make an attempt at it as best I can each try.
In the end, I am willing to be judged by my peers (a home inspection arbitrator) but only after my client has fully stated their claim against me in writing so that I am not responding to shadows on the wall.
Licensing, in my view, has helped this profession in states where it has been applied with due consideration.
The public is becoming smarter and there will soon be a time when a "weasel clause" will not be acceptable to the homebuyer because they will have read about it or heard about from others.
To be regarded as a professional you must be willing to be held responsible for your work.
Who would visit a doctor or any other professional who placed a sign in his office that stated that their "liability is limited to the fee paid by the client"? My wife is an RN, my sister a CPA and neither would think of doing so. Of course, an RN can't open their own shop anyway. But what MD would do that?
The answer is to more fully explain the limitations to a home "exam" and how it may change from the inspection event. Informing the client of their contractual responsibilities regarding the report is the second part. It is equally important. Most HI's never think of doing that.

Tom, very interesting way to put it. You have several valid points. I guess I read and hear a lot of bad cases and most of the time the homeowners are quick to blame the home inspector and real estate agent when something goes wrong. As you and I know there are going to be problems with just about any house regardless of age. We are only human and as I said before there are numerous components in a house and we cannot guarantee any of them will be working at any given time.

Ultimately it comes down to education of the consumer. We are all professionals and we all have to band together and make sure it stays that way.

By the way, in regards to your remarks that you get blasted. I really believe that we can all act professional and we can also agree to disagree. Just keep it nice like my mother used to always say.

[Tom Edwards]

Tom, very interesting way to put it. You have several valid points. As you and I know there are going to be problems with just about any house regardless of age. We are only human and as I said before there are numerous components in a house and we cannot guarantee any of them will be working at any given time.


Thanks, Mitchell.
With the "Standards" of the inspection written as a statute in NC it is fairly easy to operate within those guidelines. I'm sure many HI's inspect above those minimums, however, many fail to even try. I have no patience with those who "can't do the minimum" for their fee.
Having said that, why can't HI's be "held resposible for their work". That means clearly stating what you are inspecting, inspecting as you agree to do and providing a clearly written report that states the "condition of the systems at the time of the inspection". I even state in my report where all the water stains were and if there were none, I state that as well.
If you don't do that it can come into question later. I stand responsible to inspect the systems as they were on the day of the inspection. My client has the responsbility to fully read the report and take affirmative action on all my recommendations regarding those system prior to purchase.
An analogy....Going to the doctor, receiving a prescription and directives and not following any of them. How would the doctor be responsible for your health if you did that? He wouldn't, of course. And neither will I.
Having a wife who is a medical professional has helped clarify this responsibility issue for me. The medical analogy works very well.
Give it some thought.

Now, the field has been leveled. I'm OK with it. No weasel clauses.
There is no doubt in my mind that "further investigation" regarding a system will likely uncover additional issues that could not be evaluated within the scope of my inspection. I'm ok with that.
Occasionally a client comes at me for minor damage that would have been discovered if they had complied with the inspection agreement. I can point out their error and stand behind my contract because it is an equitable agreement; not one-sided.
Think about it. Isn't that more "professional"?

I would gladly share my agreement with you if you ask.
I love to share.

[Mitchell Meeks]

I would gladly share my agreement with you if you ask.
I love to share.

That would be great. It would give me some insight as what others are doing.