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Mediation is not a home inspector’s home court.
I read countless home inspector pre-inspection agreements that include a clause that in essence states: “any dispute stemming from the home inspection will be settled in mediation.”
You, and every home inspector across the country, should strike out that clause from your pre-inspection agreement.
Why?
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Many home inspectors are SHOCKED to hear that their corporate entities (sub-chapter S or limited liability corporations) do not insulate them from personal liability for doing a negligent home inspection.
These home inspectors say that their attorneys told them about this protection when they formed their corporations. It’s simply not true.
When can a disgruntled client come after the corporation for restitution? When IS the corporation sheltered against charges? I go through the initial myth and more in this week’s video blog.
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I encourage home inspectors to utilize the proper use of disclaimers – and go into it in some considerabl
e detail – during my Law and Disorder Seminar.
A knowledgeable home inspector knows that there are many issues concerning a home-buying decision that are NOT going to be uncovered during a home inspection. Unfortunately, your clients don’t understand this fact.
That very real disconnect is the reason why home inspectors should be incorporating disclaimers into their practice. I go through a few examples of proper disclaimer usage during this week’s video blog.
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Home inspectors – I’m sure you are familiar with the “selfie” mantra of today’s youth. In essence, they love taking photos. You should have the same passion during a home inspection. Take photos of each room in the house, appliances, HVAC units and more. Take far more photos than required or that you will even put into the inspection report.
Why is taking so many photographs important from a legal perspective? I walk you through the protective process and highlight a specific home inspector’s plight in this week’s video blog.
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I’m starting to see a very disturbing trend developing between the home inspection industry and the real estate marketplace: non-client home sellers are bringing claims against home inspectors for the failure of their clients to follow through on the agreement of sale as a consequence of the home inspector’s findings.
Some of these frustrated sellers, desperately attempting to unload a home in a still slowly recovering housing market, vent their fury at the home inspector for a lost sale in entirely inappropriate ways.
How should you, the competent home inspector just fulfilling your professional duty, handle these angry home sellers when a filed complaint comes your way?
I go through how to squash these unreasonable requests in full force in this week’s video blog.
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In the discovery phase of a lawsuit, laywers ask witnesses questions under oath that are recorded by a court reporter. Believe it or not, lying is commonplace!
As a lawyer, I’m thrilled when a party opponent lies under oath. I explain why and detail the reasons you should never lie in a deposition in the home inspector training video below.
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I am continuously surprised at the number of inspectors who do not carry professional liability insurance or, as it is popularly known, Errors and Omissions Insurance for home inspectors (“E&O”). When I ask inspectors who attend my home inspector training at the Law and Disorder seminar whether or not they carry E & O insurance, between 40 and 60 percent of them say that they do not. That number is constantly diminishing, however, as more and more jurisdictions have introduced laws requiring that home inspectors become licensed and have made the carrying of E&O insurance a condition of licensure.Some inspectors who do not carry E&O would, perhaps, like to carry it but simply do not conduct enough inspections to be able to afford it. Those inspectors generally leave the profession when carrying professional liability insurance becomes a condition of having a license.
Many others do not carry it because they think that it is “too expensive” and/or that it “paints a target on your back” – that is, it makes you more likely to be sued than if you had no insurance.
Whether or not a given product is “too expensive” is something that individual consumers have to determine for themselves after conducting a cost-benefit analysis and considering competing products.
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Sellers are encouraged to obtain home inspections prior to listing their house for sale.
That said, home inspectors MUST be aware of exposing themselves to liability to non-client third parties.
Home inspectors run into problems when someone with whom the home inspector does not have a contract claims to have been warned by the alleged negligence of the home inspector.
In this week’s video tip, I discuss why home inspectors like you should not get caught in the pre-sale inspection trap, illustrate how you can avoid it and detail an example from a case I recently handled.
Recently, I’ve been re-publishing some posts from the archive on LinkedIn and facebook on the theory that many inspectors may never have seen the original posts. It turns out that it was a good idea, at least to judge from the tremendous uptick in the number of unique visitors that the site is attracting since then and the number of retweets and comments those archival posts have engendered.
Doug Zumach, commenting on Monday’s The Kamikaze Claimant post, asked “Joe: Won’t the inspector’s E & O premium rise for defending this case? Might it not be more cost efficient to have someone like you defend this?”
That’s a very good question that implicates one of the two major issues that home inspectors tell me concern them the most: the epic tone deafness of the insurance industry when it comes to responding to the overwhelming percentage of unmeritorious claims that plague the home inspection profession.
When an inspector receives an inquiry from a former client regarding a putative issue with an inspection, he never knows whether it will escalate into a fully-formed claim. That is how the Kamikaze Claim started out. When the inspector went back to investigate the claim, he learned that the roofing contractor had filled the client’s head with a lot of nonsense about what was causing the leaks, their provenance and the ineptitude of the inspector in failing to discover and report them.
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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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