How would you respond?

[tbird]

I received this email today from a Reeltur.

How would you respond?

Hi, Carl:

I just the notice below from my office. Can you give us the paperwork, please?

INSURANCE CERTIFICATES FROM HOME INSPECTORS: XXXXX Fine Homes and Land now requires that you obtain an insurance certificate from any home inspector that you will be using. If they do not have E & O insurance you cannot use them. A copy of the certificate must be turned in to the office.

Best regards,

Reeltur.

Here are the state requirements for Licensing.

Arizona Certification (Title 32, Chapter 1). The Arizona State Board of Technical Registration (BTR) certifies and regulates the practice of home inspectors. The law requires 80 hours of education, successful completion of the National Home Inspector Examination, and evidence of successfully completed home inspections. In addition, the law requires that certified home inspectors have one of the following financial assurances: 1) Errors and Omissions Insurance in the amount of $200,000 in the aggregate and $100,000 per occurrence, 2) a $25,000 bond or proof of assets in that amount, or 3) an alternate financial assurance mechanism approved by the BTR with a value of at least $25,000. The law states that loss of or failure to obtain financial assurance is grounds for revocation of certification.

[AHI in AR]

As I see it, you have a realty firm circumventing the law -- or at least trying to. The law does not require E&O insurance; that's only one option among three.

Regardless, I can't see how a real estate firm can tell a buyer who they can't use. I don't know Arizona laws, but around here it is strictly forbidden to tell a buyer that they can't use any duly licensed inspector. I would assume that the same situation exists in AZ -- assuming that you meet one of the 3 approved insurance/ bond requirements.

[JEuriech]

Carl

If I valued their business, I would send them a copy of my Errors and Omissions Insurance policy.

If I didn't have an insurance policy and only a bond, I would send them a nice letter explaining about The State of Arizona financial requirements. If I meet the state's requirements for financial assurances, it should be more than adequate for a realtor's office.

However, I don't know of anything that says a realtor's office requirements can't exceed the state requirements, as long as it's done uniformly for all inspectors.

Jeff Euriech

Peoria, Arizona

[tbird]

That's what I was thinking. Look at the wording of the email. It is basically saying that the Inspector works for the Reeltur. I wonder what happens if the client picks their own Inspector that doesn't meet their requirements?

[sepefrio]

Just curious, have you recently done an inspection for one of their clients? Have you asked to see this "requirement" in writing on company letterhead?

It may be a small possibility, but maybe this "agent" is trying to set you up to take the blame for something? I doubt that is it, but just be careful. It always scares me when people ask for my insurance information.

[hausdok]

Hi,

BH&L can establish whatever rule they want their affiliates to comply with in order to allow them to refer inspectors but they can't prohibit one of their clients from using whoever they choose to hire. BH&L is simply hedging their bets; if they refer someone and that someone screws up - or they want to claim that someone screwed up - they want that someone to be carrying enough insurance to keep their butts out of the sling. What's curious is that they didn't require an indemnification certificate including them as an additional insured on the inspector's policy.

This is something that the large franchise firms focus on and no-doubt talked that firm into. They require all franchisees to carry large amounts of E & O coverage, indemnifying them in order to keep them out of hot water and require the inspector's policy to indemnify the agent. Once the real estate firm buys into it, the little guy is basically cut out of the loop.

One more reason why you should concentrate on finding ways that you won't have to rely on the largess of the zoids for your business.

ONE TEAM - ONE FIGHT!!!

Mike

[AHI in AR]

I don't see that the wording inplies that the inspector works for the firm; in fact, I see that the letter is aimed at buyers. Here's the quote: XXXXX Fine Homes and Land now requires that you obtain an insurance certificate from any home inspector that you will be using. If they do not have E & O insurance you cannot use them.

As I see it, the firm is demanding E&O insurance that the State Of Arizona doesn't require --otherwise you are "blackballed" in that firm. That doesn't seem legal to me. If you have E&O insurance it's a moot point, but I have to assume that you don't or you wouldn't have posted this.

Half a country away, it should be apparent that I've got no dog in this fight and don't care, exactly, except for the (apparent) fact that you have a realty firm trying to force inspectors to meet a standard that the law doesn't require. That's a dangerous precedent that would appear to be designed to steer buyers to certain inspectors, and it would likely be a restraint of trade...

But what do I know...I'm not an attorney.

[gtblum]

What can you say?

It's become quite obvious to me over the last the last three years, nobody has the balls to stand up as a group, and take control of our industry.

Those who are comfortable with their " working relationships" know better than to rock the boat, and will continue to prosper because of it.

Meanwhile, back at the ranch, the worst examples of half assed used house salespeople, who attempt to make it in the R.E. business which BTW, may have the biggest turn over in the sales world, are fed from day one, from corporate, any and every way to side step or control who "THEY USE".

Because we as a group do nothing, they run the show. They pick the inspectors for their trusting clients. They knife your back, they mislead their clients, and they control the home inspection business. Not us.

As long as we allow it to continue, it will. This is just another example of a brainstorm by folks who know we're getting better at this on a daily basis and are apperently costing them more money.

Hell, I once got a private message from someone here, telling me to shut up about it, because it's just the way it is. I'll pass the same advice to you. Nobody has the guts to stop it. Get used to it. Forget about it. Play nice and you too, might be able to work. Let's see how long it takes for someone to delete this, or invite me to take a vacation.

[Erby]

Gary,

Take a vacation.

Go to Arizona and have a little NY chat with him. Bet you could make him an offer he couldn't refuse.

-

[hausdok]

I don't see that the wording inplies that the inspector works for the firm; in fact, I see that the letter is aimed at buyers. Here's the quote: XXXXX Fine Homes and Land now requires that you obtain an insurance certificate from any home inspector that you will be using. If they do not have E & O insurance you cannot use them.

No, that's not what the IP reports. A realtor sent him an email asking him to send him his insurance certificate and cited a notice he'd received from his main office directing him (the realtor) to obtain a certificate in a certain amount from the inspectors that he uses or he (the realtor) won't be allowed to use (I hate that word but it is what the realtors mean when they refer to their act of referring someone) that inspector.

As I see it, the firm is demanding E&O insurance that the State Of Arizona doesn't require --otherwise you are "blackballed" in that firm. That doesn't seem legal to me. If you have E&O insurance it's a moot point, but I have to assume that you don't or you wouldn't have posted this.

Yes, they are demanding that their agents not do business with home inspectors that don't carry E & O and that don't carry E & O in a certain amount, but they have a right to set policy for how they, and the agents who are affiliated with them by contract, deal with other commercial entities. It's sucks, but it's a business decision they are entitled to make. The inspector has a choice, obtain the insurance and meet their standard or not get their business, it's as simple as that; no different than when Uncle Sam sets certain rules for how it doles out contracts to contractors.

Half a country away, it should be apparent that I've got no dog in this fight and don't care, exactly, except for the (apparent) fact that you have a realty firm trying to force inspectors to meet a standard that the law doesn't require. That's a dangerous precedent that would appear to be designed to steer buyers to certain inspectors, and it would likely be a restraint of trade...

I absolutely agree that it's a dangerous precedent and that it's probably designed to ensure their agents only recommend certain inspectors to their clients; but it doesn't obligate a client to follow that lead and I don't think it qualifies as restraint of trade.

Now, if the terms of the contract that the buyer signs with the agent specifically state that the buyer must use only an inspector that carries X amount of E & O or they won't enter into a contract with the buyer, and the buyer refuses to go along and informs his inspector, I think that an inspector might be able to try and make a case for restraint of trade, but it might be a stretch.

But what do I know...I'm not an attorney.

Ditto that.

ONE TEAM - ONE FIGHT!!!

Mike

[Marc]

I'm on that side of the fence that doesn't cede to Realtors, regardless. It's a black & white thing, no gray areas. I accomodate them but never lose sight of boundaries. In fact, I broadcast that policy as loud as I can, as often as I can, everywhere, right to their face. It has cost me enormously in lost sales but that's how I am. After 7 years, when an agent calls my office, if it isn't about a copy of a report that they want, it's probably about a house that they are buying for themselves or that a relative is buying.

Louisiana requires 300K aggregate in E&O so I wouldn't have an issue with an agency wanting proof of insurance.

What Mike said. I have a fat, buyer oriented advertising budget.

Marc

[Jim Katen]

Send them what they ask for.

Then send them a letter explaining that you can only work with agents who have the CRS designation and ask them to provide you with a copy of the CRS designation for every agent in their office.

[Charlie R]

I like that answer Jim, goes both ways.

[Scottpat]

I agree with the "send it" group. If you do not have E&O then it is a moot point. Mike, summed it up pretty darn good as usual.