Thread: Report ownership

This has likely been discussed before, but I have a problem that crops up from time to time.
An agent or a buyer will call me and want my input or further services on a report that I did for someone else. I usually ask how they got it. They always get it from the original listing agent who got it from the original buyer's agent.
My opinion is that I don't own the report. The original client owns the report. If the report was not acquired from the original client, then someone is at least in violation of some ethical standard and at most stealing from the original client. I am very reluctant to discuss the report with the next party.
They think it's public domain because the real estate contract allows for the seller to see the report for purposes of making repairs. I maintain that they are allowed to see it but not possess it.
What say anyone?

JLMathis

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Originally Posted by Jeffrey L. Mathis

This has likely been discussed before, but I have a problem that crops up from time to time.
An agent or a buyer will call me and want my input or further services on a report that I did for someone else. I usually ask how they got it. They always get it from the original listing agent who got it from the original buyer's agent.
My opinion is that I don't own the report. The original client owns the report. If the report was not acquired from the original client, then someone is at least in violation of some ethical standard and at most stealing from the original client. I am very reluctant to discuss the report with the next party.
They think it's public domain because the real estate contract allows for the seller to see the report for purposes of making repairs. I maintain that they are allowed to see it but not possess it.
What say anyone?

JLMathis

Disclosure in our state pretty much says that if there are any home inspection reports the listing agent (if they know about them) or seller (if they have it) must disclose it. I interpret it as disclose the findings, not the actual report. It was actually tossed back and forth a few times between a new buyers agent and the listing agent after the new buyers agent (my client did not buy the home) called me to ask me a few questions about the report. My client was not even off the deal completely yet. I asked my client if he had been contacted and he told me he did not even sign the release yet. What the 2 Realtors finally came up with after checking with the board and such was...No...It is the findings, as in what concerns there were with the property, not all findings. I have no idea if all that is true but right on the TREC portion of the inspection report where it pretty much tells of what a home inspection is and such I have right below that that the report is solely for the named client above Blah blah blah. I also have on there that the no part of the report extends beyond the inspection date as anything can change from the time I walk out the door blah blah blah.

Now whether or not the Real Estate disclosure actually means handing the entire report over I have yet to check into it because I know for a fact it is all the time.

Some Realtors will either email a copy or fax a copy over to the listing agent and say that their (my client) wants every item of concern fixed. Obviously when that happens the listing agent now has a full copy.

I think that pretty much once it leaves your grubby little fingers it is now history no matter what laws there are out there. I see other home inspection reports all the time. Most are from when the seller had their inspection done when they bought the house. They are disclosing the findings as the law states. Are they doing it correctly????? Who knows.

Jeffery, your state law will help you with this. In your state and in most other licensed states as Ted has noted, you can not talk about the report to anyone that your client does not give you permission to do so.

Next call just tell them that since they are not the party that you did the inspection for that state law does not allow you to talk about it. Then add that you would be glad to update the inspection for them by conducting a new inspection on the home.

Scott:

That's pretty much what I did. Told them I'd be glad to work for them for a fee that would be less since I knew the home pretty well. I do think the client should have recourse. It's his property. Not mine or the agent's.

JLMathis

My contract, which is our association's standard contract, does not permit me to discuss the inspection report with anyone without my clients permission. This is usually sufficent to end any discusssion that is inappropraite, including listing agents. I don't see a practical way to avoid inspection reports form getting into the public domain. Here, if my client wants to get out of the sale because of the report they must furnish a copy to the listing agent. I know for a fact seveal times where a listing agent has then given out the report to other potential buyers of the home. If they call me say a few months later I just tell them I cannot comment on the report, conditions may have changed since the report was done and I would be happy to another inspection for them.

Pennsylvania has it written into the agreements of sale that requires the buyers to furnish copies of all reports to the sellers. But it doesn't mean I have to discuss the report or its contents with anybody other than my client.

Our reports unfortunately find their way into other peoples' hands and it's out of our control to stop it from happening.

Originally Posted by Jeffrey L. Mathis

Told them I'd be glad to work for them for a fee that would be less since I knew the home pretty well.

Jeffrey,

You should not charge less, and you do not know the house "pretty well" as you have no idea what was done to it, or has happened to it, since your inspection.

You should, for your current client's best interest, NOT ASSUME ANYTHING is "like it was" the last time you were there and that you should look at everything with the same critical eye you did the first time.

It is quite PROBABLE that you will find more based on your background knowledge of the house as it comes back during the inspection, meaning you will likely actually work harder and spend more time on the inspection and the report - which means you are cutting yourself short if you charge less.

Originally Posted by Jerry Peck

Jeffrey,

You should not charge less, and you do not know the house "pretty well" as you have no idea what was done to it, or has happened to it, since your inspection.

You should, for your current client's best interest, NOT ASSUME ANYTHING is "like it was" the last time you were there and that you should look at everything with the same critical eye you did the first time.

It is quite PROBABLE that you will find more based on your background knowledge of the house as it comes back during the inspection, meaning you will likely actually work harder and spend more time on the inspection and the report - which means you are cutting yourself short if you charge less.

Agreed.
I will give previous clients a break on the price of a second or third home, but not someone who as obtained the report I did previously.
Things change too much, ESPECIALLY if the seller has done repairs based on my report. I know what was wrong and will dig a little deeper than normal just to see how the repair was done. 99% of the re-inspections of repairs show that the repair was done wrong, sometimes dangerously so.

I agree with everyone else... to me the report is the product people pay for. Once you sell it you no longer have it. My SOPs also prohibit discussing the findings with anyone other than the person you're contracted with.

On a few occaisons I've allowed a transfer of the report when the original buyer 'sells' it to a new buyer. Basically, new buyer signs a contract with me and old buyer signs a release of all interest of the report. I charge $75 to push the paper and the new buyer pays the old buyer somewhere around 1/2 the initial cost of the inspection.

If nothing else, this gives you something to offer the people trying to get you to talk about the report. Realistically, getting a hold of the original buyers (likely disgruntled and have moved on since finding out the house was a POS) and getting them to sign the paperwork is difficult.

Originally Posted by Matt Fellman

I agree with everyone else... to me the report is the product people pay for. Once you sell it you no longer have it. My SOPs also prohibit discussing the findings with anyone other than the person you're contracted with.

On a few occaisons I've allowed a transfer of the report when the original buyer 'sells' it to a new buyer. Basically, new buyer signs a contract with me and old buyer signs a release of all interest of the report. I charge $75 to push the paper and the new buyer pays the old buyer somewhere around 1/2 the initial cost of the inspection.

If nothing else, this gives you something to offer the people trying to get you to talk about the report. Realistically, getting a hold of the original buyers (likely disgruntled and have moved on since finding out the house was a POS) and getting them to sign the paperwork is difficult.

Paper work, paper work. Call me lazy but I never get involved in any of that. I offer a new inspection and thats about it. For some reason or other they will get a new inspector instead of the one that was there.

No logic in that. The past buyer, your client, walks because of the extensive findings or no allowance. I guess you did a good job! You don't talk to the next buyer of the property about the report. He gets PO and hires someone else or just goes with the info someone already gave them.

I hate getting into the nea nea crap. Next!!!!!!!!!!!!!!!!!!!!!

I guess I am getting old or fed up with the nit pickin crap. I gave up over 1000 in work last week because I hit my bottom dollar on a few homes literally in my back yard that I priced out very reasonably because I could roll out of bed to get there. Wasn't enough and they actually wanted to beat me up for less money. Sometimes I kick myself but in these times but I am only going so far before the off button gets hit.

Can anyone list any important reasons as to why we should not go ahead and include the "permission clause" in the agreement to allow us to distribute the report as we see fit and to discuss it with interested parties? (This of course would all be in effect with just one signature from the client.)


Also, why not include in your agreement "report ownership is retained by the inspector" so that you can have legal recourse (copyright) when an agent gives it out to other buyers?

Good points about under-valuing my services.
RE: retaining the report: I guess language could be made, but you took a fee for the report and presented it to the client. I think that makes it theirs.

JLMathis

If you 'copyright' it; doesn't it belong to you?

All reports are under copyright protection since its written work, you can also choose to have a registered copyright but I see no reason to do that with inspection reports.

The client can do whatever he wants with the report except sell it or anything disallowed in the agreement, in the case where the inspector retained ownership.

I guess you would have to look at the interpretation of questions for the report. First of all, I agree that the original client is the owner of the report. If another potential buyer got a hold of the report, then why should you go out on a limb when someone else paid for it?

A couple of scenarios.

1. New client calls and has questions about the report such as where exactly in the crawlspace is the rotten wood and how bad? You could tell the client to get a release from the original client and for an hourly fee with a minimum of $ you will try and answer questions about the report but the questions have to be in general. This will probably cost more that just getting a new inspection.

2. Tell them you will have to do a new inspection and they will have to pay full price as you have to reinspect everything just like it is your first time on that house.

I am beginning to rethink this copyright thing. An inspection report is not like a design on a house. I think a report is just what it is on the day and time that you did the inspection. The client pays for it and you move on. The report is only good for the time and day that it was done, much like an appraisal. I think the only thing you have a leg to stand on is the pictures that you took and any disclosures that you put in the report.

I agree. I don't see copyright as a legal option. The client that did not buy the house would rightly say it was his. He paid for it and he can sell it to another buyer to recoup costs.
Now, then the question becomes: Do I have any obligation to the next buyer. On that I think not and I charge my hourly for consultation.

JLMathis

Originally Posted by Jeffrey L. Mathis

I agree. I don't see copyright as a legal option. The client that did not buy the house would rightly say it was his. He paid for it and he can sell it to another buyer to recoup costs.
Now, then the question becomes: Do I have any obligation to the next buyer. On that I think not and I charge my hourly for consultation.

JLMathis

Not necessarily so. It depends on your state laws. If the person holding an inspection report is not a home inspector he cannot sell findings on a home inspection. He cannot perform a home inspection. Selling an inspection report is a home inspectors right only. Not a home inspector..cannot perform a home inspection...not an inspector cannot sell an inspection report. The law is there to protect the home buyers. As many have stated anything could have changed since you left that home that you inspected. For someone to buy a home based on your inspection findings puts that person not only liable for anything that may be wrong with the home but is also breaking the law and can be fined/charged for a crime for selling a second hand inspection report seller. Home inspection laws are in place to protect all. Part of a real estate transaction ... Inspector must be involved in the inspection and handing out/selling the report.

It's obvious that the reports will be passed around. However, I don't see myself as obligated to spend time discussing it with anyone other than the person who paid me.

I don't care what legal clout this following comment holds but it is part of a preface that is in my reports.

This report and the photos in all of their forms are the copyrighted material and intellectual property of Arundel Home Inspection LLC, as of the date of this report. No one other than the client named in this report is authorized to use this material for any purpose, and absolutely no one is authorized to resell or otherwise trade on this material under any circumstances.