Before purchasing, have it inspected to protect yourself

Are you thinking about buying a property? The OACIQ strongly recommends that you carry out a pre-purchase inspection. Here are the main steps. If you are dealing with a real estate brokerage professional authorized by the OACIQ, you will not be alone, because they will have to accompany you before, during and after this stage of the transaction.

Before inspection

Your Broker's Responsibilities

In accordance with the Real Estate Brokerage Act and its regulations, and in order for you to be better protected, your broker is required to recommend that you have a complete inspection carried out by a professional or a recognized building inspector, who must meet certain requirements:

1. Hold professional liability insurance against faults, errors or omissions to compensate you if he ever commits any during the building inspection. (Written proof is the best way to ensure that he has one.)

2. Conduct inspections in accordance with a recognized standard of practice that provides minimum guidelines, defines specific terms and standardizes reporting.

3. Use a recognized service agreement that specifies the nature, scope and limits of the services offered by the inspector, as well as their costs. It could also include a clause requiring you to read the inspection report carefully and ask the inspector questions in order to fully understand its content.

4. Provide you with a written report, which is essential to obtain an assessment of the condition of the desired property, and thus help you make an informed decision.

The above criteria should guide your choice when faced with several possible candidates. Your broker can provide you with a list of inspectors or professionals holding a title in good standing (e.g. an architect, a building technologist or a building engineer) who meet these requirements. In this case, he is required to provide you with more than one name.

The OACIQ has entered into agreements with the following building inspector associations, which meet the criteria mentioned above:

• Association of Building Inspectors of Quebec [AIBQ] – Download the standard of practice

• Association of Thermographers in Building Inspection [ATIB] – Download the standard of practice

• Association of Construction and Housing Professionals of Quebec (APCHQ) – Download the practical standard

Regardless of the inspection firm you deal with, they should ensure that their professionals respect the conditions set out above.

The inspector you choose will assess everything that is visible: structure, roof, plumbing, electrical installation, etc.

New construction: be careful!

Think you don’t need to have an inspection of that new property you’re interested in? Think again! If you’re buying a new building covered by the Residential Construction Warranty , a pre-move-in inspection (or “ pre-delivery inspection ”) is required. Done with the contractor, it’s a crucial step. Since a thorough inspection is the best way to protect yourself, we recommend that you also be accompanied by a building professional , other than your contractor, during this important step.

The primary purpose of this inspection is to examine the building's systems and components in order to detect work that needs to be completed, apparent defects and poor workmanship, as well as major construction defects, while indicating to your contractor the elements that need to be corrected and the deadlines.

Although there is a New Residential Building Warranty Plan, it may not apply to your situation .

Used house or house without legal guarantee of quality: be careful!

If inspecting a new home is essential, it is even more so with a used property. Of course, all the information contained in the Seller's Declarations of the Property form that the seller must provide is very useful, because it reflects what he knows about the condition and history of his property. However, a proper inspection will allow you to complete this information by going into more depth. In addition, it will demonstrate that you have acted prudently.

The broker must inform all parties to the transaction of any factor of which he is aware that could adversely affect them or the very purpose of the transaction, such as negative factors raised in an inspection report prior to your promise to purchase. The existence of any prior report must also be declared by the seller in the Seller's Declarations on the Property form.

Furthermore, if the property is for sale without a legal warranty of quality (i.e. without a guarantee that it is free of defects), then an inspection is all the more necessary to know what you are buying. The inspector who will carry out this inspection must then be informed that the property is being sold without a legal warranty.

During the inspection

Your broker should attend the inspection to be able to advise you properly based on what the inspection has revealed (try to obtain a reduction in the seller's price, for example). It is also important that you be present. Indeed, the competent building inspector will take the opportunity to point out certain material elements that deserve attention and, if necessary, the corrections to be made. These remarks must be part of his written report.

After inspection

The inspection is complete and the expert has sent you his report. It is then up to you to assess whether its content will call into question the purchase of the property, its price or the conditions of the sale. If explanations are necessary regarding certain aspects of this report, do not hesitate to ask him your questions.

Here are the three most common scenarios.

1. No change

You declare yourself satisfied with the inspection and do not request any changes to the Promise to Purchase that your broker sent to the seller. The transaction therefore continues.

2. Renegotiation of the price or conditions of purchase

If, following the inspection, you notice minor imperfections that do not really have an influence on the price offered, these should not be used to renegotiate the conditions of the promise to purchase.

Have you identified significant issues? You might then want to:

• reduce the purchase price;

• carry out a more in-depth inspection of a component of the building or have more in-depth tests carried out, for example for pyrite; or

• grant the seller a period of time to make certain repairs.

In the context of a renegotiation, you are under no obligation to provide the inspection report or even part of it to the seller. If you wish to do so to justify your request for a price reduction, your broker will provide the seller with a complete copy or an extract of the inspection report to inform him of the problems identified, clearly indicating the reasons why the report is being provided and, where applicable, that this provision is not intended to cancel the promise to purchase.

Furthermore, the OACIQ recommends in certain cases choosing to request a price reduction, rather than a repair which may prove difficult to apply.

The seller will have the choice:

• to agree to reduce the price or to make repairs himself;

• to agree to an extension of time to allow the buyer time to carry out further testing;

• to continue the negotiation; or

• to refuse your requests.

You reach an agreement? Good. If changes to the Promise to Purchase need to be made, your broker and the seller's broker will ensure that they are recorded in writing on the Modifications form, which will be signed by both parties. This form will be an integral part of the Promise to Purchase and must be given to the lender. This form must then indicate that it is following the inspection that the parties agree to modify the Promise to Purchase, and it must be signed within the time frame given in the inspection condition.

3. Cancellation of the sale

After reading the inspection report and having noted in good faith the presence of significant factors, if you no longer wish to purchase the property, you must then, under the inspection clauses generally used and within the time limits indicated, send a notice to this effect to the seller, accompanied by a copy of the inspection report. It is the receipt of this notice by the seller that will have the effect of canceling the promise to purchase. It is important to provide yourself with proof of receipt of the notice and the report by the seller.

Consult your broker to find out the different methods available to you to send your notice and a copy of the report to the seller. They will help you choose the one that applies to your situation. For example, if your deadlines are almost up and there is an emergency, they can discuss it with you and advise you on the most appropriate method.

Do you have any questions regarding the inspection of your future property? Do not hesitate to contact the information center OACIQ Info .

Last updated: December 18, 2023

Item number: 202655