GUEST BLOG. In April 2021, the Quebec government announced its intention to make inspection mandatory for homes built 25 years or more ago.
Inspectors will soon be supervised
Finally, it will no longer be possible to improvise as an inspector without having the appropriate training! With the adoption on December 12, 2019 of Bill 16, building inspectors will have to hold a certificate from the Régie du logement du Québec (RBQ). Note that the regulations have not yet been adopted, and therefore, this law is not yet in force. The RBQ has entrusted the Bureau de normalization du Québec (BNQ) with the task of developing a consensual standard which details and brings together in a document the best practices in residential building inspection. The draft standard is currently subject to public consultation until October 3, 2021.
A tool to keep your property in good condition
An inspector has the mandate to detect apparent risks, not hidden defects, even if he can sometimes detect clues. The buyer who moves forward without an inspection accepts responsibility for all apparent defects, whether or not he saw them while visiting the building. Article 1726 of the Civil Code indicates that the buyer must carry out a diligent verification of the property he is about to purchase to ensure that it is free from apparent defects which can be perceived by a prudent and diligent buyer without need to call on an expert. The seller is not required to guarantee these apparent defects.
If the property is for sale without a legal guarantee of quality, then the inspection is all the more necessary to know what you are buying. Buying a property without an inspection can limit any legal recourse in the event of hidden defects.
The report provides useful information on the defects to be corrected, accompanied by photos. It is crucial that you take this into account. I suggest you move furniture that may be hiding some defects, as the inspector is not required to do so. In certain situations, the inspector himself will recommend additional expertise. Advice you should follow.
Do not do an inspection
Buyers have been tempted to forgo an inspection, particularly in a multiple offer situation. During the recent real estate overheating, this trend was on the rise. I worry about these buyers, who may end up with foundation problems, piling or mold. The Self-Regulation of Real Estate Brokerage of Quebec (OACIQ) modified, on June 22, 2021, the promise to purchase forms to clarify the risks related to not carrying out an inspection. Now it is stated that the broker is obliged to inform the buyer of these risks.
When the buyer is an experienced building contractor, he has the knowledge to assess the condition of the building himself. Paradoxically, for certain buildings in very poor condition, it is less risky not to carry out an inspection. An informed buyer will detect whether or not there are problems in the structure (foundations, bricks and roof), and for the rest, whether he intends to dismantle everything (walls, plumbing, electricity, insulation) to redo.
Role of the broker
Real estate brokers are required to offer their clients an inspection with a recognized building inspector, who must meet certain requirements determined by the OACIQ. They may suggest a few names, but there's nothing stopping you from choosing it yourself. After an inspection, the buyer sometimes withdraws. It's not the inspector's fault. It's quite the opposite. We roll up our sleeves and look for a building in better condition. The broker should always attend the inspection. He will be better able to advise you and negotiate a price reduction, if it is justified.
When making multiple offers, bid high and negotiate down significantly
In the desire to get the best deal, many buyers will offer $100,000 more than the asking price. Following the inspection, they may request a significant price reduction. The seller can refuse and put his property back for sale. However, it can be a double-edged sword. The novelty effect has worn off and some buyers will view negatively the fact that the first transaction fell through following the inspection. Nobody wins.
When there are multiple offers, refrain from asking for a price reduction
Often I offer to offer a lower price. This guarantees that no price reduction will be requested following an inspection. Many sellers will appreciate it.
Mandatory quality inspection and legal guarantee
I see several advantages in requiring that an inspection be carried out and in not allowing sellers to require that a legal guarantee of quality be removed, except in certain special cases. However, the market will not be able to keep up if there are not enough inspectors. So why not announce that inspections will become mandatory within the next two years? This will allow the RBQ to finalize its standards and ensure that there are a greater number of qualified inspectors.
By: Jean Sasseville / Lesaffaires
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