phase inspection contract needed

[AHI in AR]

Hi guys--

I have been contacted and asked to do phase inspections on 2 new homes being built simultaneously for out of state buyers. As a custom builder for 25 years, I certainly think I can handle it. (Don't boo me for being a builder also; I'm not a guy who "builds" through the windshield of a Mercedes or from behind a desk -- although I've inspected some homes built by those sorts!) However, I've not done phase inspections before and I need a good contract that makes it clear that I'm NOT doing code enforcement or compliance checks. Any suggestions? And what do you guys charge for these inspections? I suggested a minimum of 3 inspections: 1) Prior to placing concrete in the footer, 2)after rough-ins and prior to drywall, and 3) final prior to closing.

My main concern is, obviously, limiting liability. It's not hard to imagine a scenario where a sub comes back and changes things after my inspection. How do you handle that? To complicate things, the jobs would be in a town about an hour from here.

Thanks in advance.

[Jim Katen]

Originally posted by AHI in AR

. . . However, I've not done phase inspections before and I need a good contract that makes it clear that I'm NOT doing code enforcement or compliance checks. Any suggestions?

Tell your lawyer what you want the contract to achieve and let him write it.

And what do you guys charge for these inspections?

I've established a basic per-hour rate that I like to get for my time and I design my fees to provide me with that rate. If I can't generate an adequate per-hour income, my business won't be profitable.

Others figure their fees in 1/2 day increments.

The nice thing about consulting is that you can charge anything you want to charge.

I suggested a minimum of 3 inspections: 1) Prior to placing concrete in the footer, 2)after rough-ins and prior to drywall, and 3) final prior to closing.

I'd specify that #2 is prior to wall insulation going in.

Ask for a set of plans up front and ask that the architect and/or builder cc you on any change orders.

You might want to offer an additional "plan review" service before construction begins. This can sometimes be the best investment a customer can make. Changing lines on paper is cheap.

My main concern is, obviously, limiting liability. It's not hard to imagine a scenario where a sub comes back and changes things after my inspection. How do you handle that?

Photographs.

To complicate things, the jobs would be in a town about an hour from here.

Thanks in advance.

You've gotta take the travel time into account.

-Jim Katen, Oregon

[AHI in AR]

Thanks, Jim, for the detailed response. I was obviously going to run any contract thru an attorney. However, since this may be such a limited part of my business I was trying to avoid the expense of having him write a contract from scratch. I was hoping there might be a standard contract form I could buy and simply have him modify it for local conditions.

As for the other suggestions, I didn't specify that the 2nd inspection would be prior to insulation, but that was a given as far as I was concerned. My note about the job sites being an hour away was not to ask how to price that, but rather a way of amplifying the fact that supervision of the site would be difficult since I couldn't simply drop in occasionally while in the area. Therefore, it would be easier for changes after the inspection to be slipped by me. Your suggestion to take photos is good; it just would seem to require a ton of them to document everything. I hadn't thought about asking to be in the loop regarding changes, but that's an excellent idea since we both know that's where a lot of structural problems arise.

[Jim Katen]

Originally posted by AHI in AR

Thanks, Jim, for the detailed response. I was obviously going to run any contract thru an attorney. However, since this may be such a limited part of my business I was trying to avoid the expense of having him write a contract from scratch. I was hoping there might be a standard contract form I could buy and simply have him modify it for local conditions.

Well, that was my official response, and it stands. I'd offer to share my contract for phase inspections, but I don't use one (please don't tell anyone).

As for the other suggestions, I didn't specify that the 2nd inspection would be prior to insulation, but that was a given as far as I was concerned.

You'd better make it clear to them or I guarantee you'll arrive to see walls full of insulation.

My note about the job sites being an hour away was not to ask how to price that, but rather a way of amplifying the fact that supervision of the site would be difficult since I couldn't simply drop in occasionally while in the area. Therefore, it would be easier for changes after the inspection to be slipped by me. Your suggestion to take photos is good; it just would seem to require a ton of them to document everything.

A ton of photos is ok. As Kurt once pointed out to me, the more digital pictures you take, the cheaper they are.

You might consider hiring a lackey who's lives close to the job. Pay him to take pictures at your direction each day. Better yet, find someone who wants to become a home inspector and charge him money to allow him to take pictures and work with you as part of his training.

I hadn't thought about asking to be in the loop regarding changes, but that's an excellent idea since we both know that's where a lot of structural problems arise.

Ain't that the truth. If the builder has to cc you on all change orders, that'll also help him him to ensure that the changes are properly documented. (In addition to structural problems, COs can cause budget problems. . . )

- Jim Katen, Oregon