Inspection Contingency Quiz


 Debbi Conrad  |    August 09, 2016
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1. The seller has the right to cure. The buyer delivers a notice of defects within the deadline, and the seller does not want to cure. Which of the following does not terminate or void the offer?

A. The seller delivers notice of his intent to not cure the defects to the buyer within 10 days of the buyer’s delivery of the notice of defects.
B. The seller does nothing.
C. The buyer proposes an amendment to the seller withdrawing the notice of defects.
D. The seller delivers a CAMR to the buyer and the buyer signs it.

2. The buyers had a home inspection and now they want to go on the property again. Do they have a right to further inspections?

A. No, further inspections are unreasonable and an unnecessary inconvenience the seller, and they take too much time and cost too much money.
B. Yes, if the home inspection report recommends that a foundation contractor inspect the basement walls regarding water seepage.
C. Yes, the inspection report refers to a squeaky floor.
D. Yes, if the buyers pay for them.

3. The buyer had 12 days for any inspection and conducted a roof inspection within this time frame. The roofer stated that the roof should be replaced within two years. The buyer proposed an amendment asking the seller for a roof replacement credit. The amendment had a binding acceptance date after the inspection contingency deadline. When the seller did not respond, the buyer delivered a notice of defects and CAMR, well after the contingency deadline, asking for his earnest money back. Why is this not effective?

A. The notice of defects is late, beyond the inspection contingency deadline, so the inspection contingency will be deemed satisfied.
B. The buyer failed to deliver a copy of the inspection report so the contingency is considered satisfied.
C. Submission of an amendment has no effect on the deadline for the notice of defects.
D. All of the above.

4. The buyers’ builder friend conducted the home inspection. The seller had the right to cure. The builder found that the roof needed repairs and the chimney flue was cracked. The buyers did not submit a notice of defects and instead just told the listing agent what the defects were. The buyers then decided they did not want the house and asked for their earnest money back, citing the roof defects. Will the buyers get out of the contract?

A. No, there was no notice of defects so the buyers accepted the property as-is.
B. Yes, there never was a legitimate home inspection because the builder/friend was not a registered Wisconsin home inspector.
C. Yes, if the seller does not elect to cure the roof defects.
D. No, the buyers have to take the property and the builder must repair the roof and chimney.

5. If the first offer falls through, what does the seller do with her copy of the first buyer’s home inspection report?

A. Put it in the bottom of her birdcage because it is no good to a buyer who did not hire the home inspector and pay for the report.
B. Use it as the basis for amending the RECR.
C. Give it to the listing agent so he can get cost estimates for repairs.
D. Tell the second buyer he can rely on the inspection report.

6. The RECR says the shingles on the roof are raised, and the buyer signs the RECR. The buyer has the shingles inspected by a roofing contractor as a component inspection. Can the buyer list the shingles on a notice of defects or an amendment?

A. No, not on a notice of defects if the buyer already knew the nature and extent of the shingles issue.
B. Yes, the buyer can address the shingles in an amendment.
C. Yes, in a notice of defects if the shingles problem was worse than revealed in the RECR.
D. All of the above.

7. The buyer delivered a copy of the inspection report and a notice of defects. Which of the following is not a valid choice for the seller if the seller has the right to cure?

A. Investigate, deliver notice telling the buyer the seller will repair the defects, make the repairs in a good and workmanlike manner, and provide the buyer a written report detailing the work done within three days prior to closing.
B. Deliver a notice to reject the inspection report due to inspector bias, thus confirming the contract without making any repairs.
C. Elect not to cure and make the offer null and void by delivering a notice to the buyer indicating the seller will not cure the defects or by allowing the 10 days to run without any written response to the buyer.
D. Propose a different solution, for example a closing cost credit or price reduction, using an amendment wherein the parties agree that the notice of defects is withdrawn.

8. The accepted offer has an inspection contingency and the seller has the right to cure. The buyer delivered the inspection report and a notice stating that there are issues with the roof, that the buyer wants the crawl space inspected because water was observed inside of it, and that the buyer wants to terminate the offer based on the inspection. Which is not a legitimate consequence of this notice?

A. The buyer gave his reasons and thus may unilaterally terminate the offer despite the seller’s right to cure.
B. The seller has 10 days in which he may give notice to cure the defects in a good and workmanlike manner, give notice electing to not cure the defects or do nothing.
C. The buyer may conduct follow-up inspections recommended in a written home inspection report resulting from an authorized inspection, although written notice is not a required step.
D. The agents will recommend the parties speak with their attorneys to sort out the legal effect of the notice.

9. A seller accepted an offer with no right to cure in the inspection contingency. The buyer delivered a notice of defects and a CAMR. The seller won’t sign the CAMR. He feels the buyer is citing inspection report items only because the buyer now prefers the neighbor's house that the buyer looked at immediately after the inspection. Which of the following would not potentially invalidate the buyer's notice of defects?

A. The inspector was not a Wisconsin-registered inspector.
B. The notice was not delivered by an authorized method.
C. The notice did not state the seller has no right to cure.
D. The notice listed no conditions that are defects as defined in the offer.

10. The buyer delivered a notice to the seller listing repairs to be done and describing how the seller was to cure the defects. Should a notice of defects or an amendment be used if the buyer requires the seller to use a specific carpenter to rebuild the deck per current safety standards using pressure-treated wood?

A. A notice of defects is fine, as long as it was accompanied by a copy of the inspection report.
B. If the buyer wants to have the repairs done in a certain manner or by certain contractors, an amendment must be used because a buyer cannot unilaterally dictate contract terms.
C. The buyer was smart because now if the seller elects to cure the defects, he will have to abide by the repair specifications.
D. The buyer should use a notice of defects so the seller cannot renegotiate and change roofing contractors.

11. The inspection contingency deadline was Thursday, and on Friday the buyer personally delivered the seller a notice of defects written by the builder, for the buyer, on a plain piece of paper. Is this notice of defects valid?

A. No, the notice of defects is late.
B. Yes, only licensees must put the notice of defects on a WB-41 notice form.
C. Yes, the builder does not need to attach the inspection report because he is a qualified expert.
D. No, the cooperating agent should have drafted the amendment.

12. Who must receive a copy of the home inspection report the buyer receives from the home inspector?

A. The seller, along with any notice of defects.
B. The seller, even if there is no notice of defects given.
C. The DSPS because it regulates home inspectors.
D. Both A and B.

Answers: 

  1. c 
  2. b 
  3. d 
  4. a 
  5. b 
  6. d 
  7. b 
  8. a 
  9. c 
  10. b 
  11. a 
  12. d 
Debbi Conrad is Senior Attorney and Director of Legal Affairs for the WRA.
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