In any real estate transaction, it is prudent for the purchaser to order inspections to investigate the condition of the property. The buyer and seller rights and duties are clearly stated in the contract.
One point of contention and confusion that has occurred over the years is who “owns” the inspection. General inspections often have clauses stating that the report is for the “exclusive use of the client” who ordered it, or “this report is the exclusive property of the inspection company and the client whose name appears within.”
This is important for the inspectors to limit their liability, but the reality is that as soon as that report is delivered to the seller it constitutes a material fact regarding the property and is now a part of their disclosure requirement.
As per the California Association of Realtors Residential Purchase Agreement commonly used in our area for purchase, item 10Bii: “Buyer shall give seller, at no cost, complete copies of all investigation reports obtained by buyer, which obligation shall survive the termination of the agreement.”
Sellers have to turn over the report to subsequent buyers no matter who paid for it, but the only person who could claim that the report is inadequate or incorrect is the person who paid for it and has the contract with the inspector.
All buyers have the right to perform multiple inspections on a property they are purchasing, but they must deliver those findings to the seller whether the transaction goes through or not. If you are a buyer who “inherits” reports from a previous prospective buyer, Realtors recommend that a inspection with another inspector or a “re-inspection” with the original inspector be performed so you are not relying on work products that may not be up to date with no legal protections provided to you, the new buyer.
As always, contact your local Realtor for real estate related advice and guidance.
— Laurel Abbott is a real estate agent with Prudential California Realty and president of the Santa Barbara Association of Realtors. Contact her at laurel@laurelabbott.com or 805.879.8050. The opinions expressed are her own.