Home Inspection News and Analysis

Don’t Lead With Your Chin

By the time a home inspector feels the need to summon me to deal with an unreasonable client, he has generally already bent over backwards to try to mollify him. Generally, this takes the form of offering a. to return the inspection fee or b. to pay for “half” of the repair or c. to make the repair himself.

Regular readers know well my position on any of these strategies. You may think that you are bending over backwards. In reality, you are bending over frontwards, something one should strive mightily to avoid doing.

Since it is almost never the case – less than 1 % of the time – that the home inspector has any culpability for the issue in question, why in the world would an inspector want to make any offer to resolve an issue that was not of his making? That’s a rhetorical question that answers itself.

Of course, the irony is that inspectors are constantly complaining to me that insurance companies simply refuse to resist bogus claims, a complaint that sort of rings hollow when they refuse to do so, themselves.
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Everything’s Negotiable!

My recent post, When Attorneys Amend Your Agreement, prompted this question from Las Vegas inspector, Gordy Zorn:

Joe, My question is how can anyone alter a contract except for the company who wrote it up in the first place? When buying a house, you have to sign a contract and you can’t pick and choose what part you agree with and not. You want the house, you sign. You don’t want the house, you don’t sign. Same with a car or any other major purchase. It’s our contract and our rules. They either abide by our rules or the go somewhere else. I don’t know any home inspector that doesn’t use a pre-inspection agreement and for the most part I always thought it was mandatory when getting insurance or at least it’s one of the questions on an application for insurance.

I did have someone cross out an area once on my pre-inspection agreement and I told him it didn’t matter what he crossed out, everything on my contract is still in force. If he didn’t agree with my contract, I wouldn’t be able to do the inspection. He hemmed and hawed but he signed it anyways.
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Make Sure Your Client Reads Your Inspection Report

It’s always a pleasant surprise to hear from folks who frequent this site because otherwise I would never know who is reading my musings, where in the wide world they are doing it or whether they are resonating with my target audience.

The other day I got an email from a reader in Seoul, Korea – I never say South Korea because, well, because it is the Republic of Korea, not the Republic of South Korea – who quoted this text from this recent post:

“But let’s take it a step further. Suppose that this inspector failed to discover some other defect that ended up costing his client a lot of money to correct.”

“Would the inspector be liable for that loss?”
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A Tale Of Two Inspectors

Last November I spoke at a home inspection conference on the Left Coast. As almost always happens, two inspectors who were in attendance at that conference subsequently had claims two-and-a-half months later. Both inspectors informed me when they notified me of the claim that they had been at the conference, enjoyed my presentation very much and had enrolled in the ClaimIntercept™ program.

One inspector had enrolled immediately after the conference, the other one waited until after he had a claim to enroll. The first inspector was thrilled that he could just forward the demand letter to me for response and forget about it.

The second inspector was shocked, shocked to learn that I was not going to allow him to take advantage of me.
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Beware Of The Streisand Effect

Because we live in an age where folks can vent their ill-founded outrage against service providers anonymously, instantly and globally with a few strokes on a computer keyboard, businessmen and women can now add “defamation” to “death and taxes” as a new “certainty”. And there is no shortage of online venues where these oh-so-put-upon umbrage mongers can grind their reputation-destroying axes, Angie’s List and yelp being two of the most popular venues. The Better Business Bureau is another.

A business person who finds his professionalism under assault on one of these sites by some thin-skinned yenta can be forgiven, perhaps, for wanting to defend himself forcefully via the response mechanism that most of these sites provide. In my experience, however, this is seldom a good idea because of a phenomenon that has come to be known as the Streisand Effect, after the well-known stage fright victim.

Ms. Streisand had sued a photographer who had taken aerial photographs of beachfront properties on the California coastline as part of a government project to document coastal erosion. One of the properties was hers and the suit sought suppression of the photograph of her property. You can guess what happened.

Prior to the filing of the suit, the photograph had only been downloaded six times. In the ensuing four weeks, over 400,000 internet users had visited the photographer’s site to gawk at the privacy-obsessed celebrity’s ostentatious crib.
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A Deck Collapse, Now . . .

One of my inspector friends recently called me with some disturbing news. Both his former client and the client’s insurance company were suing him over an inspection that he had performed in July of 2008.

The inspection was pretty standard, a few issues but nothing not easily and inexpensively corrected. The property had a rear deck off of the first level which was original to the seventeen year-old home and the inspector described the deck construction as “average” with two-by-eight joists and “adequate” vertical support.

Unfortunately, the deck collapsed this past February under the sheer weight of ice and snow accumulation. The homeowner filed a claim, alleging some $57,000 in damages, against his homeowners insurance policy and his insurance company denied the claim for the most part, agreeing to pay only $10,000.
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Who Should Pay For Arbitrations?

After reading one of my archival posts on Arbitration, Connecticut home inspector Martin Greenberg wrote:

“Joe, I recently attended a CT Law course taught by an attorney. He indicated that the AAA has recently changed its practices and is now looking to the defendant for a substantial sum of money as the case initiates. He advised to specify arbitration using an attorney qualified to arbitrate and with related experience.

What is your opinion?

Martin”

I think that AAA may be feeling the economic pinch as much as the rest of us and must think that transferring the financial burden to defendants is just what the doctor ordered to gin up a slew of new arbitration matters by removing the financial disincentive to the filing of ludicrous claims.
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Is E & O Insurance A Waste Of Money? Part Deux

My recent post, Is E & O Insurance A Waste Of Money, prompted this comment from Arizona Home Inspector, Jeff Byfield:

Joe my question is, if you didn’t have insurance would you even be considered in these frivolous law suits that greedy people and unscrupulous attorneys pull you into? What can they really sue you for besides your ladder and a few tools, or is there more to this than what I’m thinking?

This is a question that comes up every time I present the Law and Disorder Seminar and every time I write about professional liability insurance.

Many inspectors believe that, if there is no pot of gold – insurance – at the end of the rainbow, claimants and their attorneys will simply fold their tents and go away. Problem solved. Unfortunately, as I have written extensively elsewhere on this site, lawsuits seldom end well for uninsured defendants and their uninsured status certainly does not immunize them from lawsuits.

While I have successfully persuaded over 500 claimants and their attorneys to abandon their claims, it was because I laid out compelling reasons for doing so bolstered by Force Ten levels of logic. They did not do that because the inspector had no insurance, they did it because I convinced them that they had no claim.

Some inspectors who have been following me for years and are familiar with my phenomenal success at terminating home inspection claims aborning have wondered to me what the point of having professional liability insurance is, if 97% of claims go away with a letter. Why, indeed?
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Elementary, My Dear Watson!

Around the first of the year, one of my home inspector training Law and Disorder Seminar graduates alerted me to a television show that had recently begun airing on HGTV. Coincidentally, I had actually been vaguely aware of the show from the torrent of threads appearing on home inspection message boards whose general consensus seemed to be that the show’s host was unfairly singling out home inspectors for special abuse for the crime of not having discovered defects that he was only able to discover through invasive and destructive investigation, a technique that, I hope it goes without saying, is way-hay-hay beyond the scope of a home inspection.

I didn’t pay the message board kvetching any mind but my friend seemed to think that this show would be an inestimable boon to my practice because it was basically telling viewers that if they were unhappy with their home, their home inspector was most likely the responsible party.

By then the show had been on for a while and since I had not noticed any meaningful uptick in the number of crackpot claims that home inspectors were asking me to neutralize, I figured that people were not taking the gratuitous criticism for anything beyond entertainment. But then the strangest thing happened. Shortly thereafter, I had lunch with a friend who is a very successful financial planner – a total layman – who was a fan of the show and he thought that it would be bad for my practice because it cast home inspectors in such a bad light.
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Myth # 2 The Limitation of Liability Clause Is the Greatest Thing Since Night Baseball

There is absolutely nothing that a home inspector likes better than limiting her liability. And there is nothing that limits a home inspector’s ability to make money more than clinging to this completely unnecessary clause that is way past its sell-by date.

Home inspectors love limitation of liability clauses – also known as exculpatory clauses – because, in the majority of US jurisdictions, they are routinely enforced on freedom-of-contract grounds and, thus, effectively put a cap on the inspector’s potential liability to her client for professional negligence. Indeed, every home inspector association and every home inspector franchisor actively encourage their members and franchisees to embrace this evolutionary holdover. And you would be hard pressed to find a home inspector forum whose contributors do not wax enthusiastic about the preternatural cleverness of their personal attorneys who counseled them to include such a clause in their pre-inspection agreements.

One problem with exculpatory clauses, of course, is that they also put a cap on the inspector’s earning potential. What sophisticated purchaser, in her right mind, would hire a professional home inspector who limited her liability? That’s a rhetorical question that answers itself. The sophisticated consumer will pay hundreds of dollars more to secure the services of an inspector who does not limit her liability – and makes the point in her marketing material that, unlike her lowball competition, she stands behind her inspection reports.
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