Point-of-sale inspections are obsolete
After decades of experience, Cleveland Heights City Council should consider whether point-of-sale inspection of real property still makes sense.
In the early 1980s, I co-authored the Cleveland Heights ordinance, along with a past president of the Cleveland Area Board of Realtors who was a fellow council member. It incorporated best real estate practices. Its purpose was to incentivize the improvement of properties. A city inspection was required. If repairs were needed, the parties could negotiate some rebate to the buyer. The buyer then would purchase the property “as-is,” while receiving cash at closing to do repairs. It was a sensible arrangement.
Well-intentioned social engineers later changed the rules. The city now often demands money be withheld in escrow after closing, to be released only upon proof that repairs actually were completed. That may seem reasonable. But such withheld money is unavailable to pay upfront for those repairs. Also, this escrow requirement could make sales impossible if a potential buyer wanted to use FHA financing. Present rules therefore harm all current owners who someday may be sellers.
There were few qualified private inspectors in the 1980s. Private inspection at buyer expense now is standard practice, regardless of whether brokers are involved.
Private inspections are more thorough. They protect both parties. The buyer knows better what is being bought. The seller gets less exposure to being sued for failing to disclose defects. Private inspection gives each party equal knowledge about the physical condition of property. The parties then can negotiate. They can decide whether or how to compensate the buyer for a willingness to accept the property “as-is.” The city need not be involved in this process.
So, why still have point-of-sale inspections?
Some may argue that point-of-sale inspection remains important because it aids with municipal code enforcement. But a free-market approach is more acceptable than the potential criminalization of all new owners. Caveat emptor! Let the buyer look first and then beware, as civil law requires.
The city should conduct even more routine exterior inspections to prevent blight. But it no longer needs to police properties at the time of sale.
Our municipal government has limited resources. It cannot do everything. In this matter, it should redirect its efforts. It should not do point-of-sale inspections. They are obsolete. No more public money should be spent on them.
Alan Rapoport, a longtime resident of Cleveland Heights, served on CH City Council (1980–87) and as mayor (1982–87).