RE/MAX CROSSROADS RULES & REGULATIONS BULLETIN:
REALTORS® attendance during home inspections, appraisals and presence of trades.
There’s been some confusion regarding RECO's requirements on REALTORS® attendance during home inspections, appraisals and presence of trades. This Office Bulletin will explain and clarify what’s expected from REALTORS with respect to these types of appointments like who should be present during the inspection as well as how client instructions should be handled.
- RECO expects a registrant in attendance on behalf of the buyer AND seller anytime a “non-registrant” requires access to a client’s property, unless advised otherwise in writing.
This means that a registrant from both the listing brokerage and buyer brokerage must be in attendance whenever trades are present, home inspections, appraisals, etc. - unless their clients indicate differently in writing. The lack of registrant attendance is a serious matter as RECO have received complaints regarding property damage and personal injury.
- Home inspections – Attendance is not required but written directions should be obtained.
There is no section in REBBA 2002 that specifically requires that a registrant must be in attendance at the time that a home inspection takes place. However, if a registrant has no written directions as to who will be in attendance at the time of the inspection, problems could arise that could lead to allegations of violations of specific sections of the Act.
- Examples of how a home inspection appointment could lead to a Registrant breaching sections of REBBA 2002
1) A registrant representing a seller arranges to let a home inspector into the seller’s home for the purpose of an inspection while the seller is at work. The representative of the seller leaves the home inspector alone in the house for 3 hours to attend other business. When the seller returns that evening, they complain about a number of things such as mud being dragged into the home, damage to the home having occurred, or that objects have been stolen from their home. The seller then complains to RECO that their brokerage/representative has acted unethically because they were not looking out for the best interest of the seller and/or were not conscientious and competent in their service. According to RECO, these allegations could in fact lead to a disciplinary hearing under the Code or any of the other remedies available to the Registrar under the Act.
2) A Sales Representative was found guilty of permitting a Home Inspector and Buyers access to a property by providing the access code to the lockbox without permission to do so from the Seller or their representative. The RECO Discipline Decision for this case stipulated a fine of $5,000 payable to RECO and the successful completion of the OREA “Real Property Law” course was required from the Registrant.
RECO advises registrants to follow the below guidelines to avoid the above and similar complaints involving home inspections where alleged conduct in contravention of the Act occurs:
- In order to satisfy s.4 and/or s.5 of the Code, registrants are obligated to follow the instructions of their clients and to use their common sense in the course of trading. Both the sellers' representative and the buyers' representative should act in accordance with their clients' lawful instructions.
- In order to avoid any potential problems it would be wise for a registrant to obtain written instructions from their respective clients (buyer/seller) on how the clients would like the inspection to be conducted, (e.g. who would be in attendance and when). A review of s.10 of the Code would confirm this view.
- Always have written instructions regarding what will happen at a home inspection or any other service being performed in order to avoid such problems. The representation agreement with a buyer and/or seller would be a suitable document to use for this purpose.
- Keep in mind that some clients may prefer that their REALTOR® be present, although some home inspectors may prefer otherwise.
- If you are there during the inspection process it may create some concerns if you become actively involved in inspection activities that are beyond your knowledge, competence or comfort level.
- Discuss the options with the clients and inspector and proceed accordingly.