A seller or seller’s broker is only prohibited from sharing a copy of an inspection report with a subsequent buyer if the seller or the seller’s broker is the client of the inspector and the seller or seller’s broker signed an agreement prohibiting the seller or broker from sharing the report. Most inspectors know that a client will use the inspection report to negotiate repairs in a transaction and that the client may need to provide a copy of the report to the other party. This is the nature of the industry that gives rise to the demand for the inspector’s business. Most inspectors do not require that their clients sign confidentiality agreements prohibiting the client from sharing the report with others. Even if an inspector has a client sign a confidentiality agreement that limits the client’s right to copy and distribute the report, that agreement is binding only upon the client and not upon any other person who may receive a copy of the report.

A broker or seller who receives an inspection report is charged with knowledge of the information in the report. This is true even if the broker or seller does not open the report or disagrees with the information contained in the report. If an inspection report reveals material defects, the seller and the broker are obliged to disclose those defects to subsequent potential buyers. The seller and broker may choose to disclose the defects orally, but that may be imprudent since no record of the disclosure would exist. The seller and broker may instead summarize the defects in a written communication to the subsequent buyer, but that may create a risk if information is omitted. Instead, the seller and broker should provide a copy of the report to the subsequent potential buyer along with the seller’s disclosure notice, thereby providing all of the information the seller and broker have with regard to the condition of the property. The Seller’s Disclosure Notice (TXR 1406) instructs the seller to identify and attach copies of previous inspection reports received in the past four years. The association’s notice cautions the buyer against relying on previous reports as a reflection of the current condition of property and suggests that the buyer employ an inspector of the buyer’s choice to inspect the property.

No. There is no requirement for a seller to make any repairs. However, a seller who rejects any repair amendment or refuses to negotiate any repairs risks the buyer terminating the contract if the buyer has an unrestricted right to terminate the contract and is within the termination-option period. If the seller strongly believes the information in the inspection report is incorrect, the seller could have another inspection performed in an effort to continue negotiating with that buyer. If the buyer refuses to negotiate and terminates, the seller should provide both inspection reports to subsequent buyers.

A broker or seller who receives an inspection report is charged with knowledge of the information in the report even if the broker or seller does not open the report. While sellers and listing agents should review inspection reports they receive on the property, a buyer and/or buyer's representative can't force them to do that. Additionally, there is no requirement that sellers agree to or even consider amendments requiring the seller to perform repairs to the property. Buyers should have inspections performed and negotiate any repairs during the buyer's option period. If the buyer is not satisfied with the information in the inspection report or cannot get the seller to agree to requested repairs, the buyer can exercise his right to terminate the contract within the option period. Additionally, if a lender requires repairs, the buyer can terminate under paragraph 7E if the parties do not agree to pay for those repairs.