Many times a home for sale may fall out of escrow. The buyer may have had an issue found in the home inspection report, had buyers remorse, had an issue with financing, or canceled escrow for other reasons.
A question that often comes up is what happens to the home inspection report of that property?
The Real Estate Purchase Agreement
The California Association of Realtors (C.A.R.) makes this clear in the newest version of the California Residential Purchase Agreement, revised December 2018, which is the purchase contract used for all purchases of residential property in California.
Section 12 on page 5, item A explains the basics of the home inspection.
If a home inspection report has previously been prepared, a Receipt For Reports addendum is filled out. This form makes it clear a seller has to give copies of any known previously prepared reports to the new buyer.
The Receipt for Reports form very clearly states “Such reports may not be updated or reflect the current conditions of the Property”
It also states “Buyer has been advised that if Buyer receives any reports that have not been ordered by Buyer, the Buyer may have no recourse against the preparer of the report for any errors, inaccuracies or missing information.” The buyer must sign and date this form to receive the reports.
What this means
For a home inspector, this means any reports they have prepared may indeed be shared with future buyers other than the person who hired them. For buyers, this means they should get a copy of any previous reports.
However, this also means a home inspector can only be held liable for inaccuracies by the person who ordered the report. A home buyer, who receives a previously prepared report, may not and can not hold a home inspector liable if it turns out the report has any errors, or if conditions of the property have changed since the report.
What should a home buyer do?
A home buyer in escrow should ALWAYS get their own home inspection regardless of how many disclosures or previous reports they may be given by the seller. If you have any follow up questions, or concerns about a report, only an inspector you have hired can answer them.
Will a new report have the same information as the old report?
The fact is, conditions on a home can, and will change. The seller may have repaired items in a previous report, but repaired them incorrectly. A pipe that did not leak last week may have developed a leak this week. An old furnace may have worked last week, but not this week.
The bigger issue, as discussed in my previous post, Top 5 Mistakes Buyers Make When Choosing a Home Inspector, home inspectors come in a wide variety. They have different experiences and different reporting styles. As discussed in Top 10 Myths about Home Inspections the previous home inspector may only have been chosen for reasons other than being the most qualified.
At IM Home Inspections, LLC, many times I have inspected homes previously inspected only weeks before and found many significant issues that were either not reported, or not made clear in the previous report.
To order your home inspection in the San Fernando Valley, Conejo Valley, Simi Valley or Santa Clarita Valleys or surrounding areas, call 818-298-3405
Special Thank You to Lauren Noack (Senecal) at The TC Advantage, Your Elite Transaction Coordinator Service, for providing additional resources for this article.