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Pre-Inspection Agreement: Why They're ALWAYS A Must-Have

PRE-INSPECTION AGREEMENTS: WHY THEY'RE ALWAYS A MUST-HAVE
 November 1, 2022 |  Business Tips, Inspection Tips |  inspection industry, small business, money management

By Jon McCreath, NPI, Inc.'s Technical Supervisor & Training Administrator

In establishing a successful inspection franchise, there are so many things to worry about. From learning how to best market yourself and your services, to offering the best possible product, new inspectors have plenty of areas that can command their attention. In these moments, it is important not to overlook the standards and the basics of the business. One standard process that you should never skimp out on is the pre-inspection agreement. Let’s review the pre-inspection agreement and its unique importance.

Background
A pre-inspection agreement is a standard form which outlines standards, scope of work, and expectations for an upcoming property inspection. There are many reasons why this form has become a stock-standard part of every inspector’s business plan, but of particular note are the liability protections that they provide. Although no inspector intends to find conflict with a client, a disagreement is likely to come up at some point. The pre-inspection agreement is the rule-setter that keeps every inspection fair and clear.

Some basic aspects that a pre-inspection agreement describes include:

  • Home Inspection Fee 
  • Inspection Report Due Date 
  • Standards of Practice 
  • Exclusions 
  • Specific Inclusions 
  • Liability Limitations

Considerations
Some inspectors are more strict than others with how they administer and handle their pre-inspection agreements. Some inspectors may proceed with an inspection prior to receiving a signed agreement, then withhold their report until receiving the agreement and payment. However, to practice complete safety in regards to liability risks, inspectors it may be safer to avoid any contact with the specified property up until they have received a pre-inspection agreement.

Though franchisees of National Property Inspections receive a standard pre-inspection agreement, all inspectors should consider edits with their region’s, state’s, and even county’s guidelines in mind. Special additions related to climate and natural events, in particular, should be made with respect to the unique needs of an inspector's region (eg. provisions related to earthquakes in California or ocean damage in coastal zones). There are many samples out there available for reference, but it is recommended to retain an attorney to move through an agreement with a fine-toothed comb, crafting something more personalized that covers any unique needs.

In addition, a pre-inspection agreement is a requirement by any E&O (Errors & Omissions Liability) or GL (General Liability) insurance partners. Inspectors should submit their pre-inspection agreement to their insurance provider for review, in consideration for any additional edits, additions, or omissions that they might recommend.

State regulations can make things easier for inspectors at times, and at other times more restrictive or specific (see New York, New Jersey, or Texas, for example). Be sure to check whether your state is regulated or unregulated, and adjust your agreements accordingly! Though sample agreements can be found in many places, these are generally meant to be used only as references, and would not provide the same amount of protection that a properly edited and vetted agreement would allow.

Lastly, it is important not to go too far when considering edits and exclusions. Though pre-inspection agreements are vital to protecting an inspector, an agreement that is too complex, or offers too little consideration for the client can cost an inspector jobs. A well-crafted pre-inspection agreement should be personalized and offer fair protections, but not needlessly complicated.

Conclusion
It is common for inspectors to find their own process that works for them. Some are more talkative than others, while others specialize in particular additional services. However, some things are standard for a reason. Protect yourself and your business by crafting an iron-clad pre-inspection agreement, and proceed with caution until you have received a valid signature.

Inspectors do important work, but when you’re dealing with someone’s home or business and things go wrong, you will not regret doing the appropriate work in advance. To have a team of professionals at your side, choose National Property Inspections for your property inspection franchise!

 

About the Author
Jon McCreath, Technical Supervisor & Training Administrator
A former NPI franchise owner and real estate agent, Jon joined the NPI corporate team in 2019. With his inspection expertise and foundation in classroom instruction, Jon teaches and mentors new franchisees during their two-week training course in Omaha. He also handles technical support calls during and after office hours and guides franchisees through the state licensing process.


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