The following relates an inspection claim resolved with a dispute resolution provision. All identifiable characteristics removed for anonymity.
“The inspection completed was not only deficient, but negligent. Specifically, the following items were present at the time of inspection and not reported:
At the time of the inspection, the home inspector observed and reported on the following:
In addition to these observations, the home inspector also included a dispute resolution provision in his inspection agreement.
Dispute resolution provisions specify just how clients should file claims. These provisions benefit home inspectors in many ways. Here are just two:
The following showcases a dispute resolution provision written by our claims team:
Provisions, like the one in this example, must have complementary provisions within the agreement so that, when taken in total, you have an enforceable contract. In other words, if you take this sample provision and simply add it to your existing agreement, there’s no assurance that the provision will be enforceable.
In fact, manufacturing an agreement with disparate pieces of material could make a contract less enforceable. Why? Most provisions contain specifics, including what services the inspection covers and how claimants must submit disputes. By inserting unvetted provisions into an existing agreement, you could create inconsistencies or contradictions throughout the agreement.
Recently in Florida, contradictory statements within an inspection agreement rendered the limitation of liability provision unenforceable. The judge deemed the provision “vague and ambiguous” because there were several contradictory statements throughout the agreement.
Don’t risk having a judge dismiss any portion of your pre-inspection agreement for contradictions or lack of adherence to regulations. Be sure that any changes you make mesh with the rest of your contract and abide by local legislation. As you craft your agreement, we strongly recommend you consult a state licensed attorney that’s knowledgeable in contract law and the inspection industry.
Let’s return to our case study. The home inspector and our defense counsel attended the arbitration hearing. The arbiter ruled that “the inspector and the inspection report provided the necessary information to allow for proper repairs to be completed by the claimant to prevent the damages.” Furthermore, all claims made against the inspector were denied.
Because the claimant was unsuccessful in proving the inspector’s liability, the arbiter ruled that the claimant should pay all the defense expenses the inspector incurred. The arbiter awarded the inspector and us over $17,000 to cover arbitration charges, expenses, costs, and legal fees.
Ensure that claims go to courts and arbiters who understand the home inspection industry. You accomplish this by incorporating a dispute resolution provision, where permissible, and getting it and the rest of your pre-inspection agreement signed before every inspection. To learn more about arbitration clauses specifically, read the column next month when we will explore why arbitration is the preferred dispute resolution method for home inspectors.
Published in the ASHI Reporter in May 2020. See how this story appears in print below.
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