Home inspectors - the newest profession

Under the Housing Act 2004, those marketing property (usually estate agents) must provide a Home Information Pack within 14 days of a request by a potential buyer. Default may result in a fine, investigation by the Trading Standards Authority and/or civil action by a prospective buyer or seller. HIPs will include evidence of title, replies to standard enquiries, results of the standard searches and home condition reports.

HCRs will be similar to the existing home-buyer survey, although they will not include a valuation. Their purpose is to provide an independent indication of a property's overall condition. Home inspectors will produce these HCRs.

The home inspector will not need to be a qualified chartered surveyor - they will be certified and trained by a new, independent body. Consequently, a whole new industry must be created to accredit and regulate the inspectors and all will require professional indemnity insurance on minimum terms (yet to be published).

Given the estimated need for 10,000 home inspectors to produce the anticipated 1.2 million HCRs per annum, it is expected that there will be heavy reliance on Royal Institution of Chartered Surveyors members in the early days.

The independent nature of HCRs means home inspectors are more likely to face not only the traditional negligence claims from buyers and lenders, but also claims from sellers. The number of small claims brought by buyers is likely to increase. Guidance notes for the scheme provide that, if the inspector fails to report a serious or urgent defect and repair is required that costs more than £500 but less than £2500 (exact parameters to be confirmed), the buyer is entitled to claim the costs of the repairs as opposed to loss assessed on a diminution in value basis, which presently sees off many claims at this level. It is also not clear what weight will be attached to legal arguments such as causation - HCRs do not include a valuation and many buyers will have also obtained a full survey.The scheme may mean strict liability for a negligent home inspector.

Professionals already engaged in the inspection of residential properties will require their existing PI cover extending to cover work as an inspector and new entrants will be looking to the commercial market for satisfactory cover.