Home Inspection Contracts for InterNACHI Member Use

InterNACHI's standard home inspection agreement is a form many InterNACHI members use as the basis for their own contracts with clients.  InterNACHI attorney Mark Cohen says that this version offers inspectors greater legal protection.  It is designed to work hand-in-hand with InterNACHI's Standards of Practice and InterNACHI's Online Inspection Agreement System. The updated version is available to InterNACHI members free of charge.
The following Agreements are FOR MEMBERS' USE ONLY:
     InterNACHI® Plain English Home Inspection Agreement
             (revised November 2017)

     InterNACHI® Plain English Home Inspection Agreement
            (revised November 2017)

Read more about InterNACHI's Plain English Residential Inspection Agreement.
             InterNACHI Home Inspection Agreement in French
                    (revised November 2017)

             InterNACHI Home Inspection Agreement in French
                    (revised November 2017)
Download Word.docx versions of state-specific Pre-Inspection Agreements for the following states at www.nachi.org/documents.htm:
  • California
  • Massachusetts
  • New York State
  • Virginia
  • Wisconsin

The updated form contains important additions, but still consists of only a single page (English version).  InterNACHI understands that a prospective client may become wary if an inspector asks them to sign a lengthy legal document.
Cohen, a lawyer with nearly 35 years of experience in drafting and litigating contract disputes, says there are several important issues that home inspectors should consider in drafting their standard inspection contract. 
These include:           
  1. defining the scope of the inspection (and including a link to InterNACHI's Standards of Practice or the state’s mandatory SOPs);
  2. the fee for the inspection;
  3. when payment is due;
  4. a disclaimer of warranties;
  5. ownership of report and permission to discuss findings;
  6. procedure for asserting claims (notice to inspector and opportunity to inspect, time limits);
  7. a limitation on liability and a liquidated damages provision;
  8. a provision for payment of costs and attorney’s fees;
  9. dispute resolution (mediation, arbitration, litigation, etc);
  10. a “merger clause” stating there are no promises other than those set forth in the agreement, and that all prior discussions are merged into the agreement;
  11. a clause stating that any modification of the agreement must be in writing;
  12. a forum selection clause so that any lawsuit must be filed in the county or district where the inspector has his/her principal place of business;
  13. a waiver of the right to trial by jury; and
  14. a personal guaranty of payment if the client is a corporation or similar entity.
Cohen cautions that laws vary from state to state, but believes the updated InterNACHI form provides a good starting point in any jurisdiction. 

In addition to always using a written contract, Cohen urges home inspectors who have not incorporated to form a limited liability company (LLC) or subchapter S corporation because forming a separate entity offers some additional liability protection.  Inspectors may also be able to reduce their self-employment taxes by doing business as an LLC or corporation.
Finally, Cohen urges inspectors to review their advertising and marketing materials with a critical eye to make sure they do not contain unfounded statements or claims that could provide the basis for a lawsuit by an unhappy client.
Mark Cohen received his law degree from the University of Colorado in 1983.  He also earned a Masters of Law (LL.M.) from the University of Arkansas. After service as an Air Force JAG and Special Asst. U.S. Attorney, he entered private practice.  His practice includes representation of creditors, drafting and reviewing contracts, and litigating contract claims.  He has authored six articles in the American Jurisprudence "Proof of Facts" series, and is General Counsel for the International Association of Certified Home Inspectors.  He is also the former Chairperson of the  Board of Editors of The Colorado Lawyer magazine. He welcomes inquiries from home inspectors and is also available to work with local counsel in other states.
Mark Cohen, J.D., LL.M.
P.O. Box 19192
Boulder, CO  80308
(303) 638-3410
Skype:  BoulderLawyer

InterNACHI's free, online Inspection Agreement System
More about InterNACHI's Plain English Residential Inspection Agreement
Can a Real Estate Agent Sign the Inspection Agreement on Behalf of the Client?