claim stories

A home inspector recently emailed me with a question about doing pre-inspections for relocation companies. I referred him to a prior post that I wrote on the subject which answered his question. But it reminded me of several cases that I have had involving inspection companies that subcontract out inspections on behalf of relocation companies.

Based on the experience of those cases, if I were a home inspector, I would steer well clear of doing inspections for one of those outfits. For several reasons.

First, in order to get the business from relocation companies, they drop their pants on pricing precipitously. So the inspector who actually does the inspection is very likely losing money on the proposition.

Second, their loyalty is to the relocation company, not the inspector. So the minute that there is an “issue”, they are all too willing, ready and able to adopt a customer-is-always-right attitude despite the mountain of empirical evidence that I have assembled that, when it comes to dissatisfied home inspection clients, the customer is invariably wrong.
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One of the techniques that I stress in my home inspector training with the Law and Disorder Seminar for reducing one’s potential for being successfully sued is for home inspectors to strengthen their Pre-Inspection Agreements with clauses that narrow a claimant’s ability to bring a claim by designating contractually the exact circumstances under which the inspector will be amenable to suit.

One of those circumstances is the venue wherein a claim may be brought. As a home inspector, or any business performing services pursuant to a contract, you never want to be in any state or federal court. And for a myriad of reasons.

For one thing, in the context of a residential real estate inspection, any lawsuit is bound to involve multiple parties, a circumstance that is guaranteed to increase the cost and decrease the likelihood of resolution. For another, the cost for the plaintiff to get into court is low. Filing fees for plaintiffs are pretty modest. The cost to you to get out of court, on the other hand, will be quite high. Not only will you have the plaintiff to contend with but your fellow defendants, as well. And while the plaintiff may be very agreeable to letting you out of the suit, your fellow defendants, who will have filed their own cross-claims against you, may not be.

Most home inspectors of my acquaintance have already figured this out and, so, have clauses in their Pre-Inspection Agreements that mandate that all disputes arising from the inspection must be brought in Arbitration. If your client’s attorney has read his client’s Pre-Inspection Agreement, he knows that he will not be able to join you in with the seller, the seller’s agent and broker and his client’s agent and broker. He’ll have to prosecute the case in two separate venues, which he will be loathe to do. Especially if he has heard from me the manifold reasons why you have no liability.
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A question that comes up fairly frequently at my home inspector training with the Law and Disorder Seminars when I am extolling the virtues of requiring disputes to be settled in Arbitration is whether or not there should be a requirement that the arbitrator be “familiar with the home inspection business.” And many home inspectors have such requirements in the Arbitration Clauses of their Agreements.

As I have written elsewhere on this site, home inspectors have a very dim view of the American legal system and do not expect to get a fair shake. So some of them, in an effort to level the pitch or stack the deck – choose your own metaphor – have inserted this additional requirement into their Agreements.

What I tell them is this: when I was in the Army, forty-some years ago – yeah, I know, I don’t look that old – the Uniform Code of Military Justice had recently been revised to give Enlisted Men who were facing Courts-Martial the right to have one Enlisted Man on the Court-Martial panel. The change was widely hailed as a victory for Enlisted Men [and Women]. The reality for those exercising this “right” was that the Enlisted Man selected to fulfill it was always some cranky senior NCO with a chest festooned with decorations and a lengthy series of service stripes on his sleeve.

It didn’t take long for Enlisted Men to realize that they were much better off with a baby-faced Lieutenant who would actually listen to the evidence before making up his mind.
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A few weeks ago, I had a conversation with a home inspector in Connecticut. The inspector was trying to neutralize a claim by a former client over asbestos contamination issues with a property that he had inspected some months previous.

Now, as a general matter, the determination of environmental hazards and toxins is some distance outside of extant home inspection standards of practice (“SOP”) and Connecticut, which has its own state home inspection SOP, is no exception. Unfortunately, Connecticut is no exception only because the Connecticut Department of Consumer Protection issued a letter clarifying the fact that notwithstanding the fact that the law, itself, states that inspectors are required to inspect for and report asbestos, in reality they do not have to. Thus, as elsewhere, Nutmeggers are in the very best of hands.
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