A post by one of our members covers this topic. (Original post here: https://fppi.ca/inspector-cleared-perform-inspection/)
As of January 1, 2013, the Ontario Government made WSIB coverage mandatory for most people in the construction industry. It was a little known fact that under rate class G – Construction industry) in the WSIB employer classification manual, home inspectors were captured by the change in this Bill-199 because they were already in class G-704-02 – Testing, Inspection, and Related Services Amendment/08.
While this is very technical information that doesn’t appear to say much, it meant that Home Inspectors were now caught up in the mandatory reporting criteria intended for workers involved in actual construction work.
This event actually affected not only the Home Inspectors, but those hiring the Home Inspectors for their services too.
The rules are quite clear but because of the way Home Inspections are booked you as a client or a Realtor may not be fully aware of your legal responsibilities under the Workplace Safety Insurance Act (WSIA) and fall foul of the regulations. If this happens, you could end up liable for, at a minimum, any unpaid premiums of the Inspector or at worst a hefty fine.
So what are the rules, and what do you need to know?
We are going to lay out the rules for you in the simplest possible terms. We will provide you with the links to the various regulatory documentation at the bottom on this report so you can investigate further for yourself, but the regulations are convoluted and spread across several documents so we’ve encapsulated them for you here into these two categories.
Category 1: Exempt Inspections
If you are the client, and
you are intending to purchase the property for residential purposes, and
you or an immediate member of your family (parent, sibling, or child) will be living in the property, and
you will be signing the inspection agreement contract, and
you will be paying for the inspection services, and
the home inspection company does not have more than one inspector working for it, and
the property is not in any way commercial (e.g. shop with accommodation or purely commercial)
Then the inspection is exempt from coverage required by the Workplace Safety Insurance Act and WSIB registration is not required and a WSIB Clearance Certificate is not required for the Home Inspection.
Category 2: Non-exempt Inspections
If you are the Realtor and are paying for the inspection, or signing the pre-inspection agreement, or
you are the client and a third party is paying for the inspection (i.e. your company, or a relocation service), or
you are the client and you are buying the property to flip, or use as an investment income (i.e. rental), or
the inspection company has more than one inspector working for them, or
you are buying the home and paying for the inspection but a distant family member will be living in the home (e.g. cousin, uncle, friend or ex-spouse)
Then the inspection falls within the coverage required by the Workplace Safety Insurance Act and WSIB registration is required and a WSIB Clearance Certificate is required for the Home Inspection.
What does a WSIB Clearance Certificate look like?
It will have the Inspection company details, the details of the person to be covered by the certificate (i.e. the person or business that is signing the inspection agreement), either the address of the client or the address of the property to be inspected and the period during which the inspector can provide WSIB covered inspections for the client.
The problem is, that you won’t know if your inspector is going to give you a clearance certificate until you have told them what the property is going to be purchased for. Most Home Inspectors will not ask this question, as it is considered optional with respect to their Standard of Practice.
An inspector who avoids asking the question, either because they feel it’s not part of their standard or because they want to avoid registering for WSIB, is breaking the law. Not only that, they may be exposing you as a client or a Realtor, to liability.
You should ask your inspector if they are registered with the WSIB and up-to-date with payments and eligible to issue clearance certificates if your purchase does not fall into Category 1 at the top of this post.
If you would like to check for yourself the status of a business, you can go to the public access part of the WSIB site here. You should be presented with the screen on the right. You can enter the Inspection companies WSIB account number into the search box on the left search box (our account ID is 6456027 ) or you can put the Inspection company name in the right hand search box. We are registered under Future Proof Property Inspections, but “Future Proof” will still produce the current status.
Scroll down to the bottom of the page after you’ve hit the SEARCH button, and the results will show up (as below)
This is important information because depending upon whether you are the client of the inspector, or the Realtor referring the inspector, you may end up with liability that exposes you to hidden costs.
Don’t leave yourself open to unforeseen costs.
If you are the client, employing a Home Inspector, it is YOUR responsibility to ensure your Home Inspector is covered, don’t try to save money by choosing a Home Inspector who is not cleared to perform the Home Inspection, the costs to you can be much higher than the extra charges the Inspector might level for WSIB administration.
If you are a Realtor and you are referring a Home Inspector to your client you may be doubly liable for an unregistered Home Inspector you refer.
The Real Estate and Business Brokers Act, 2002, Ontario Regulation580/05, Code Of Ethics, states in Section 8, Services from Others, “A registrant shall advise a client or customer to obtain services from another person if the registrant is not able to provide the services with reasonable knowledge, skill, judgment and competence or is not authorized by law to provide the services“.
While this doesn’t fully laden the “registrant” (Realtor/Broker/Salesperson) with the requirement to ensure the Inspector is operating legally, Section 5, Conscientious and competent service, etc. and Section 6, Providing opinions, etc. of the regulations close any loophole for failing to perform due diligence in referring a properly registered Inspector when required as these two sections state “A registrant shall provide conscientious service to the registrant’s clients and customers and shall demonstrate reasonable knowledge, skill, judgment and competence in providing those services” and “A registrant shall demonstrate reasonable knowledge, skill, judgment and competence in providing opinions, advice or information to any person in respect of a trade in real estate“.
There is a possibility that if a client is charged by the WSIB and fined for using an Inspector who was not registered for WSIB and performed an inspection that was not exempt, any Realtor referring that Inspector for such an inspection could find themselves either in court defending themselves from a claim of Tortious interference, or defending themselves from a code of Ethics violation at the Real-Estate Council on Ontario (RECO). We strongly recommend all Real-Estate brokers and agents identify if the Inspector they are referring is registered for WSIB and can provide a clearance Certificate is the Inspection warrants it.
What if you are an Inspector?
OntarioACHI has been discussing the inconsistencies, with the Ministry of Labour, the Minister and the WSIB, in the way the policies apply to the Home Inspection profession. It is apparent that their is a complete lack of willingness to change anything by any of these parties. given the inability of even the ombudsman to have any effect on the way in which the WSIB applies policies to injured workers, expectation of changes to the way in which they apply policies that might reduce their income (even though it simultaneously reduces their liability for workers compensation) is akin to expecting to see a flying unicorn.
As an Association that represents all home Inspectors in Ontario, the very Professionals who are affected by these inconsistent policies, we make the following recommendations:
- Ensure you ask all clients the questions that can allow you to establish if a the property is inspected will be exempt from WSIB charges
- Ensure your Inspection agreement contract has clauses in that the client is required to sign that establishes they are aware of the conditions of WSIB coverage
- Make a choice as to whether you are prepared to, or indeed need to, register for WSIB coverage
- Ensure if you choose to be registered that you maintain payments to the WSIB (consult an Accountant to see if there are ways you can mitigate the amount of premiums based upon your income)
- Ensure if you choose NOT to be registered under the WSIB you refuse any inspection that would make you liable for premiums
- Read all the information regarding the WSIB on this website (use the search facility and search WSIB) and ensure you are up-to-date with WSIB regulations
Remember, if you perform an inspection that requires WSIB registration and clearance, and you cannot provide it, you are putting you, your client and possibly the Realtor at risk of penalties under this regulation.