Full Residential (Home) Vs Limited Scope Residential Property (5-Point) Inspections

Background

There has been a lot of social media speculation about the validity and efficacy of various services offered by Professional Home Inspectors in Ontario.

In Ontario, there is currently no government regulation of the Home Inspection Profession.  Consequently, there are no mandated standards to which any calling themselves a Home Inspector must comply with.

Professional Home Inspectors generally choose to align themselves to a larger Professional Association that mandates the use of prescribed standards and compliance to a code of ethics for their members.

The Ontario Association of Certified Home Inspectors (OntarioACHI) is just such an association.  As an association our vision is twofold. 

  • Firstly, we aim to increase the protection to consumers from people who call themselves Home Inspectors by certifying qualified members to a high standard of practice, adherence to code-of-ethics and professional conduct (CoE).  These certifications identify the holder as a true service professional.
  • Secondly, we aim to protect association members by providing them a means to a higher earning potential and ability to utilise their skills for services that may extend beyond the traditional view of residential Home Inspections.  These services should still be performed to a recognised standard-of-practice and still be in compliance with our prescribed code-of-ethics and professional conduct.

Once in a while we have queries from members of the public, members of the realty profession and members of the inspection profession regarding the application of a standard for a specific type of service.

This letter is to clarify two particular standards that appear to have caused confusion.

The two standards in question are the Standard of Practice for Residential Home Inspections, frequently called a Home Inspection) and the Limited Scope Inspection of Residential Properties (frequently called the 5-point inspection).

While both are performed on a residential property consisting of one, two, three or four residential units, the intended target audience of the user of these inspections are completely different.

Side by side comparison (in words)

Full Residential Property Inspection
(A Home Inspection)
Limited Scope Residential Property Inspection
(5-Point Inspection)

Currently, within Ontario, there are two recognised standards of Practice for performing a Full Residential Property Inspection (Home Inspection).  These are:

  • OAHI/CAHPI Standard of Practice
    Used by members of the Professional Home and Property Inspectors of Canada (PHPIC) and the Ontario Association of Home Inspectors (OAHI)
  • CSA A770/16 Standard
    Used by members of the Canadian Association of Home & Property Inspectors (CAHPI), the Ontario Association of Certified Home Inspectors (OntarioACHI) and the Ontario Association of Home Inspectors (OAHI)

In addition, two standards from U.S. Based associations exist for Home Inspectors, these are:

  • InterNACHI Standard of Practice
    Used by members of the International Association of Certified Home Inspectors (InterNACHI).
  • ASHI Standard of Practice
    Used by the American Society of Home Inspectors and members (ASHI) of Ontario Association of Home Inspectors (OAHI).

Both CAHPI & OntarioACHI have mandated all Home Inspections are now carried out under the CSA A770/16 standard.

Each Home Inspection should conform to a recognised standard of practice, including a prescribed pre-agreed contract for services and provide a written report of the findings of the Inspector

Intended users

The intended users of a Home Inspection are buyers and sellers of residential real property.

Sellers would typically request a Home Inspection to establish the condition of a property prior to listing.  This would provide them with a means to establish any defects in the property.  This would allow them to either effect professional repair or to adjust their expected sales price accordingly to take into account any defects.

Buyers typically request a Home Inspection to establish the condition prior to agreeing to finalise an offer for purchase, or prior to making an offer for purchase.  The timing of the inspection is frequently controlled by the Seller who may be guided by their representing Realtor, choose not to accept any offers containing an Inspection condition and may even refuse access to the property for a pre-offer inspection.

A Home Inspection covers over 100 components of the home in excess of a 5-point inspection, including things like interior walls, floors, ceiling, plumbing, electrical outlets and fittings, interior plumbing components, fixtures and fittings, HVAC ducting, operation and plumbing, ventilation, insulation, permanently fixed and major appliances (that are included in sale) attached cabinets, and countertops, and safety items such as Smoke & CO detectors, fire extinguishers, adequate egress and fire separation.  A Home Inspection Report should inform the user of the defects identified.

We cannot see any reasonable circumstance where a buyer would choose not to request a Home Inspection on a prospective purchase, or a Realtor advise against one, even if it meant a sale might go to another buyer.

A Home Inspection report should be comprehensive.  The reports should contain easy to understand narratives of the components, their location, the defect and recommended actions, as well as (depending upon the Inspector) other informational notes on care and maintenance of the property.

A Home Inspection report should not be primarily a checkbox report.

Currently, within Ontario, there is only one recognised standard for a Limited Scope Residential Property Inspection (5-point inspection).

This was developed by and published for use by members of the Ontario Association of Certified Home Inspectors.

It is based upon the U.S. Insurance Property Inspection 4-Point Standard but extended to cover the visible parts of the foundation.

Any scope limitations to a Full Residential Property Inspection mean that the Inspection cannot be rightly called a Home Inspection.

Under the Code of Ethics, Standard of Practice and legal duty of Care placed upon a Professional Home Inspection, a 5-point inspection cannot be referred to, or inferred as a “Home Inspection”

Until such time as government regulation states otherwise, such an inspection can be referred to as anything other than a “Home Inspection”. 

E.g. 5-point inspection, limited scope inspection, partial inspection. 

Each of these should still conform to a recognised standard of practice, include a prescribed pre-agreed contract for services and provide a written report of the findings of the Inspector.

 

 

 

 

 

 

Intended users

The intended users of a 5-Point Inspection are Insurance and Finance Providers.

They would request such an inspection to identify defects to major components of the home that might affect the insurability of certain aspect of the property or the property as a whole or might affect the decision on interest rates or the willingness to lend finances and to what extent for the property.

A seller may choose to opt for a 5-PointI inspection prior to listing to establish the condition of solely the major components of the home.

As a 5-Point Inspection, comparatively speaking, is performed using a severely restricted scope of a Home Inspection, any 5-Point Inspection, performed to the OntarioACHI Standard for Limited Scope Residential Property Inspections should not be referred to as a Home Inspection.  Nor should it be used to market a residential property as “pre-Inspected” unless clearly identifying the limited scope of the inspection to prospective buyers.

A 5-Point Inspection Report should inform the user of the condition of ALL the components inspected, including photographs and/or videos as desired, regardless of whether the components are defective or not.

We can not see any reasonable circumstance where a Buyer might choose to request, or a Realtor might choose to refer, a 5-Point Inspection.  Such an Inspection does not provide the depth of cover against unforeseen costs that a Home Inspection would.  A 5-Point Inspection, with its requirement to document the condition of everything inspected, should not take any less time to complete than a Home Inspection and the costs for each should be comparable.

A 5-Point Inspection report is minimal often consisting of 3-4 sides of letter stationery.  As only the 5-major points are considered with pre-set conditions expected, these reports are primarily checkbox reports.

Side by Side comparison (in pictures)

A side-by-side comparison of the two standards will outline why we strongly recommend any buyer/seller to ALWAYS opt for a Home Inspection and leave 5-point inspections for their intended commercial purposes.

Inspection Scope

Home Inspection

5-Point Inspection

Intended for Sellers 

Intended for Buyers

Intended for Commercial purposes

Visible Structural Components of Home (joists, beams, foundation, posts and columns, roof joists and trusses)

Exterior envelope covering (cladding, fascia, soffit, trim)

Exterior access and egress (windows, skylights, doors, exterior handrails, guard)

Driveways, walkways, on-ground ramps, porches, patios, decks and balconies.

Retaining walls and constructed planters.

Adjacent structures (pergolas, trellises, representative fencing)

Exterior water management (gutters, downspouts, visible surface drainage)

Garage Doors, openers and safety-devices

Interior Coverings (wall, floor, ceilings, windows)

Interior stairs, guards and handrails

Electrical Service, Disconnect and ground bonding (type & condition)

Distribution panels and distribution wiring (Type and condition)

Distribution wiring and junction boxes (improper visible wiring)

Electrical outlets, fixtures and fittings (functionality, condition and improper connection)

Life Safety (CO/Smoke detectors, Fire suppression systems availability, separation, egress)

Plumbing into the home (water source)

Visible plumbing within the home (including piping, fixtures and fittings and functionality)

Visible drainage out of home (the type of drainage, type of piping)

Visible drainage within the home (size, venting, condition, functionality)

Flood protection systems (accessible sump pump operation and condition, accessible backflow-preventer location and condition)

Irrigation system (cross-contamination of potable water and potential deterioration of property)

Greywater systems

Water heaters

HVAC Furnace (age and condition)

A/C compressor (age and condition)

HVAC (functionality and normal operation, incl. registers, returns and ductwork/piping)

Mechanical Ventilation Systems

Fireplaces and chimneys

Roof covering (weather tightness, abnormal deflection)

While this is not intended, circumstances, such as sellers preparing their homes for listing by performing major repairs on defect found, may allow for the use in this area.  The resulting inspection report should not be used as a pre-listing inspection report suggesting a full inspection had occurred.

While this is not intended, a full inspection could be used by Insurers, Mortgage Providers or Appraiser to supplement their information used to make commercial decisions on a property.

Note to Realtors.

A 5-point inspection is not intended to, and cannot, provide your client with a comprehensive report on the condition of their home.  In the case of a seller, a 5-point inspection may not alert them to conditions that might delay a sale or cause a sale to collapse.  For buyers, it may not alert them to possible safety concerns or combined expenses that could pose a significant financial burden post-transaction.

Both of these conditions could reflect upon the Realtors services if a referral was made to a buying or selling client to choose a 5-Point inspection over a Home inspection, regardless of the reasoning.

Choosing to refer an inspector who performs a 5-point inspection over a Home Inspection, that inherently requires the inspector to look at less of the property and therefore identify fewer defects that might cause problems during the sale process does not help the consumer to the full extent they should be and exposes the inspector to increased liability.  It is also not working in the client’s best interest to suggest such an inspection as a replacement and could be seen to breach the Realtors’ Code of Ethics.

Note to Inspectors

A 5-point inspection is not intended to replace a Home Inspection.  It serves little purpose and less benefit for a buyer who is allowed a Home Inspection condition as part of the sale process.  While it might serve as a seller’s property condition report, it should not be sold as a pre-listing Home Inspection.

Any Home Inspector that chooses to consistently offer 5-Point Inspections as a replacement for a Full Residential Property Inspection (Home Inspection) could be exposed to greater liability in a court action for failing to consistently fulfil the duty of care expected from a Professional Home Inspector.

OntarioACHI recognises the limited scope residential property inspection standard and we will continue to back inspectors using it in the correct manner.  We will not support inspectors who choose to consistently use this standard to perform a reduced scope inspection as a replacement for Full Residential Property Inspection, regardless of their reasoning.

Soliciting referrals from Realtors who choose a faster 5-point inspection, that inherently requires the inspector to look at less of the property and therefore identify fewer defects that might cause problems during the sale process does not help the consumer to the full extent they should be and exposes the inspector to increased liability.

Note to Consumers

The home purchase is subject to the legal doctrine of Caveat Emptor.  This means, as a buyer, it is your responsibility to ascertain all you can about the condition of the property before purchase.  A Full Residential Property Inspection (Home Inspection) is the only means to do this.  As a Seller, you may be considered liable for withholding pertinent information about a home, often frivolously, by a disgruntled seller should a problem occur with the property sold after the process if the Buyers has not been afforded the opportunity to inspect the property first.  Your Realtor should inform you of this.

Whether buying or selling, it is prudent to invest a small amount in a Home Inspection.  The cost of a Home Inspection against the other costs involved in selling a home is minute.  The benefits and peace of mind from a Home Inspection carried out by a Professional Home Inspector are immense.