Post-inspection payment plan for building inspection

One of the most important roles of building inspectors is to certify the quality of buildings by detecting faults in design drawings and preventing the construction of poor-quality buildings that do not satisfy building codes and standards. Building clients cannot independently observe the earthquake resistance performance of buildings. It is crucial that building inspectors check the earthquake resistance performance with due vigilance. However, they are always faced with temptation to gain profits by carrying out negligent inspections because of the clients’ inability to observe the anti-seismic performance. This situation may cause moral hazard and adverse selection problems in seismic inspection markets. To overcome these problems, this paper proposes a post-inspection payment plan for building inspection in which inspectors are rewarded based on their inspection results. It is shown that the program can effectively help in achieving a trustworthy building inspection system in the society.