When purchasing real estate, you hire many professionals to inspect the property and provide you advice. Various conditions are often reviewed including environmental contamination, termite damage, structural integrity, the operations of plumbing, electrical and mechanical systems, radon levels and boundary line encroachments. The consultants often provide you with their form of service contract immediately before performing their work.
Service contracts should be reviewed carefully before you agree to employ the consultant. Service contracts often have very limited disclaimers. These disclaimers may state that in the event the consultant makes a mistake, your liability is limited to the amount of the inspection or another limited dollar amount. In addition, the contract may give you a very limited time frame in which to present a claim. Such limited remedies could leave you in an unfortunate situation if a substantial defect is discovered after you own the property. If you cannot recover from a third party for the defect, you could be positioned like the characters played by Tom Hanks and Shelly Long in the 1980’s movie The Money Pit.
When contacting a real estate consultant, be sure to ask about the form of their service contract and whether the consultant carries professional liability or error and omissions insurance. Ask to see a copy of the service contract well in advance of the property inspection. In addition, you are entitled to obtain a current insurance certificate disclosing the amounts and types of coverages carried by the consultant. Such background checks may prove invaluable if you later discover a mistake of the consultant.
Author: Jason P. Lueking (bio)
Phone: 317.464.1591
email: jlueking@bamberger.com
Tags: environmental contamination, Jason Lueking, limited disclaimers, real estate inspections, service contracts