Are there limits on a buyer’s right to inspect the seller’s property?

QUESTION: A week ago, my client entered into a contract for the sale of his property. He called me last night sounding hysterical. He said that when he returned home from work, there was a backhoe in his back yard, a huge hole in the ground, and an equally huge pile of dirt. I called the buyer’s agent. She told me that her client had concerns about the location and adequacy of the septic field serving the property and had hired a septic company to conduct a thorough analysis. Is that type of inspection permissible?

ANSWER: A buyer’s right to inspect the seller’s property during the due diligence period is very broad. Paragraph 4(b) of Standard Form 2-T is explicit: “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.”

However, Form 2-T also includes some limiting language. Paragraph 8(c) states that the seller is required to provide reasonable access to the Property, including allowing the buyer and the buyer’s agents or representatives an opportunity to conduct due diligence. In our view, this language gives the seller the right to refuse buyer requests for unreasonably intrusive examinations and inspections. The “inspection” described in your question arguably falls into that category. If so, the seller would be justified in refusing to allow it.

If a buyer agent becomes aware that a client intends to conduct an unusually invasive inspection, the agent should immediately notify the listing broker, before the inspection takes place, to see if the seller objects. Both agents should remind their clients of the buyer’s obligation (set forth in paragraph 4(e) of Form 2-T) to promptly repair all damage to the Property resulting from the activities of the buyer or their agent. If the seller determines that the buyer’s proposed inspection is “unreasonable,” the seller may refuse to allow it.

“Reasonableness” is something that must be determined on a case-by-case basis. Since a seller’s refusal to allow an inspection could conceivably be considered a breach of contract, listing agents facing this situation would be wise to suggest that their clients seek formal legal advice before making a decision on their course of action.