Article: Your Pre-Inspection Agreement - Dispute Resolution

[Aubri Devashrayee]

Hi, TIJ Readers!

This year, we've decided to do a series on the various aspects of pre-inspection agreements. Hopefully, you can glean something from the following article to help protect yourself from possible claims.

Enjoy!

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The following relates an inspection claim that was resolved with a dispute resolution provision. To protect the insured’s identity, all identifiable characteristics have been omitted or removed.

“The inspection completed was not only deficient, but negligent. Specifically, the following items were present at the time of inspection and not reported:

“1. Major omission of gutters that do not collect water and force water down the rock wall that is outside of the home’s dining room.

“2. Major omission of the obvious damage that has been caused to the above mentioned rock wall that includes mortared joints that are worn to the point that they allow great amounts of water to enter the wall and have destroyed the wood sheathing behind the rocks, allowed destruction of the insulation, suspected mold growth on the inside of the drywall and wood framing, destruction of the ¾ inch wood flooring, complete rotting of the subfloor and major visible organic substance growth. This omission came on a day when it rained during the inspection.

“3. Major omission of the damage to two doors that lead to the crawlspace.

“4. Major omission of the damage caused by a leaking shower drain.

“5. Additionally, there is no mention of the fact that the brick veneer was constructed without weep holes to allow any moisture that may get behind the brick a path to escape.”

One of our home inspectors received that laundry list just six months after he performed an inspection. The claimant, who prepared his letter with quotes from the ASHI Standard of Practice and pictures taken during and after the inspection, alleged that it would cost $25,000 to repair the property’s issues and that the inspector should cover the cost. Using this example, we will break down dispute resolution methods.

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Edited May 18, 2020 by Aubri Devashrayee
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[Les]

I have read your post and the piece in the Reporter.  I remain uncomfortable with this information as presented.  There simply is no insurance policy that will indemnify an inspector or hold the inspector harmless.  Your inspection agreement must be written by your attorney, not your insurance company.  Just my opinion. 

[Aubri Devashrayee]

On 5/18/2020 at 4:35 PM, Les said:

I have read your post and the piece in the Reporter.  I remain uncomfortable with this information as presented.  There simply is no insurance policy that will indemnify an inspector or hold the inspector harmless.  Your inspection agreement must be written by your attorney, not your insurance company.  Just my opinion. 

@Les You bring up a good point. Perhaps we weren't as clear as we should've been in the article: we always recommend that inspectors get the advice from local legal counsel as to how they should formulate their inspection agreements. We have free pre-inspection agreement reviews at InspectorPro to help with making the agreement stronger. And, home inspectors shouldn't just rely on their insurance to indemnify them. Our stance is that inspectors should mitigate risk on the front-end of their services and inspections and then have insurance as a safety net. Hopefully that can clarify a bit!

[Les]

16 hours ago, Aubri Devashrayee said:

@Les You bring up a good point. Perhaps we weren't as clear as we should've been in the article: we always recommend that inspectors get the advice from local legal counsel as to how they should formulate their inspection agreements. We have free pre-inspection agreement reviews at InspectorPro to help with making the agreement stronger. And, home inspectors shouldn't just rely on their insurance to indemnify them. Our stance is that inspectors should mitigate risk on the front-end of their services and inspections and then have insurance as a safety net. Hopefully that can clarify a bit!

Aubri,

Thanks for the thoughtful response. 

I know InspectorPro has a unique opportunity to make a significant contribution to our profession and the real estate industry.  You have a seasoned (and newly minted)  audience that looks to you for advice and counsel. 

Personally, I have been impressed with most of your writings and how they are presented.  

Insurance is an important element of the inspection, however it should never set standards nor affect the scope and nature of our work.  

Thanks again for initiating conversations. 

 

[Aubri Devashrayee]

On 11/18/2020 at 6:08 AM, Les said:

Aubri,

Thanks for the thoughtful response. 

I know InspectorPro has a unique opportunity to make a significant contribution to our profession and the real estate industry.  You have a seasoned (and newly minted)  audience that looks to you for advice and counsel. 

Personally, I have been impressed with most of your writings and how they are presented.  

Insurance is an important element of the inspection, however it should never set standards nor affect the scope and nature of our work.  

Thanks again for initiating conversations. 

 

@Les Thanks for your kind words. We try our best to provide helpful risk management content.

I agree, insurance providers do not set standards for inspectors, nor should they. It's up to inspectors to decide how far they are willing to go beyond the standards they follow and for insurance providers to just let them know the various risks associated with that.

Thanks for being open to have these kinds of conversations! We appreciate you taking the time to read our content.

Hope you are doing well.