Release Date: 10/19/2017
QUESTION: Does a seller have the right to deny entry to a buyer’s chosen home inspector because of the home inspector’s criminal history? If so, does this right apply to other service providers used by the buyer during due diligence?
ANSWER: The answer to this question depends on the particular facts of a given case. Paragraph 4(b) of the Offer to Purchase and Contract (Form 2-T) states that “Buyer or Buyer’s agents or representatives, at Buyer’s expense, shall be entitled to conduct all desired tests, surveys, appraisals, investigations, examinations and inspections of the Property as Buyer deems appropriate, including but NOT limited to the following . . .” Paragraph 8(c) of Form 2-T also states that the seller “shall provide reasonable access” to the property so that the buyer and buyer’s agents can have “an opportunity to (i) conduct Due Diligence, (ii) verify the satisfactory completion of negotiated repairs/improvements, and (iii) conduct a final walk-through inspection of the Property.” The standard form therefore gives the buyer broad power to conduct due diligence as they see fit, while providing the seller only a limited ability to prevent access in circumstances where it is unreasonable.
Home inspectors are regulated and licensed by the North Carolina Home Inspector Licensure Board (“NCHILB”), and therefore it is unlikely that the criminal past of a currently licensed home inspector would be serious enough to deny access to the buyer’s selected inspector. If a seller is concerned about a particular inspector’s criminal history, the seller can contact the NCHILB and address their concerns there.
As for other service providers, the seller would need to show that it would be unreasonable to allow access to the buyer’s selected provider. There are no facts in this question indicating what crimes are at issue, but given the buyer’s broad power to conduct due diligence, we believe that the criminal history would have to be substantial and serious to support a seller’s denial of access. We would strongly suggest that any broker whose seller-client seeks to prevent a buyer’s service provider from accessing the property during due diligence advise their client to consult with counsel first.
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