Purchasers often include a Home Inspection Contingency in the Contract. This provides that their obligation to complete the purchase is conditional upon completion of a home inspection. This inspection is performed by a professional home inspector or engineer and typically occurs within a short time period after final ratification of the contract. It is made at the sole cost of the purchaser.
The substantive provisions included in such a home inspection contingency vary widely and must be carefully reviewed if included in your contract. For example, some inspection contingencies permit the purchaser to terminate the agreement if the results of the inspection are unsatisfactory to the purchaser, for any reason. Other contingencies permit the purchaser to terminate the contract only if the Seller refuses to remedy any defects noted in the home inspector’s report. The manner of satisfaction and release of the contingency is typically set forth in a very specific manner. Careful review and drafting (or revision) of the contingency utilized in your contract is, therefore, recommended.
Federal law requires that before any residential property constructed prior to 1978 (“target housing”) may be sold, certain required disclosures must be made to the purchaser. Additionally, the purchaser must be afforded an opportunity to have the target property evaluated by a licensed inspector to determine whether lead-based paint or lead-based paint hazards are present. (Purchasers of residential RENTAL properties in Maryland should also be aware of the applicability of the Maryland Lead-based Paint Program to properties constructed prior to 1979.)