advice needed dealing with a builder

[jbowen]

Adam homes, the construction company for an inspection I had scheduled next week isn't "allowing" me to do the inspection. First, I was hired by the buyer and they are the seller. They told me that they required all home inspectors to carry 1 million in liability insurance. I carry that in E and O but not nearly that amount in liability. My belief is that they require that to try and get the client to forgo the inspection. First, do any of you guys carry that amount of liability insurance. 2nd should I tell my client exactly why they are doing it and risk alienating the buyers agent.

[ldapkus]

I've had this happen to me. I had the insurance company name the builder as additionally covered on my insurance certificate and did a thorough inspection of the model home my client was buying.

[mnahrgang]

No I do not. I would tell the client exactly what they are trying to do. My liability insurance is sufficient to cover any and all possible damage that I could conceivablY cause to the home. Also I give the client lots of ammunition...

The builder is trying to keep you from having an inspection.
They didn't require YOUR agent to have that kind of liability insurance to help them sell the home, why are they asking it of YOUR inspector.
What are you trying to hide?
If I can't have MY choice of inspector, then I believe I'll find another home to buy from a builder who is more accommodating to my needs.

After giving them all of that ammunition, tell them that if they get the builders permission for the inspection, then I would offer to reschedule my other appointments for that day, and spend the entire day there going over the home with a fine toothed comb.

[wsiegel]

This is quite common. Sometimes it is a requirementof the builders own insurance requirements. You can do a couple of things. You can add a rider to you policy for the day you are there (and pass the cost on to your client), or you can wait till they close and then do the insepection. They still have 30 days to report any issues. On these types of inspections the builder will usually not allow you to bring any tools onto the site, which means you cannot open the electric boxes, cannot go into the attic, and cannot go onto the roof. Once your client closes, you can do all of this.

[Joe Funderburk, CMI]

Very common requirement from national or regional builders. Up your insurance. I carry 2,000,000 per occurrence, 4,000,000 aggregate. Costs about $500 per year.

[kpierce]

Originally Posted by wsiegel

They still have 30 days to report any issues.

Not if it's considered cosmetic. Otherwise they have one year, sometimes two for deficiencies in workmanship or materials.

[William J. Decker]

Many builders, im my area, are simply writing a no inspection clause in their contracts. Most new home development sales around here, the only agent is the builder's agent, so they write the contact the way they want it.

Some pretty crappy houses being sold, around here.

[Jeffrey R. Pope]

I carry $1 mil GL.

Originally Posted by kpierce

Not if it's considered cosmetic. Otherwise they have one year, sometimes two for deficiencies in workmanship or materials.

In CA, it's 10 years.

[kpierce]

10 for workmanship and materials? Or just structural? 10 for structure is standard up here. What a nightmare for a builder to be on the hook for 10 years for W & M.

[Jeffrey R. Pope]

Builder defects/errors, latent (hidden) defects and structural defects. . .

A builder in this area just recently replaced windows in 150 homes, built in 2002. The hardware of the vertical windows were found to be "sub-standard" and the windows were not opening properly after a few years.

The law (actually a Senate Bill) was passed to protect builders from class-action suits.

[dbucknavich]

Originally Posted by jpope

Builder defects/errors, latent (hidden) defects and structural defects. . .

A builder in this area just recently replaced windows in 150 homes, built in 2002. The hardware of the vertical windows were found to be "sub-standard" and the windows were not opening properly after a few years.

The law (actually a Senate Bill) was passed to protect builders from class-action suits.

Arizona was just tricked into rejecting a recent bill that would have increased the liability for builders. The signs opposing the bill had phrases like "Stop Lawsuit Abuse". Little did they know the lawsuits the signs were talking about were filed by consumers.

[kpierce]

Originally Posted by jpope

Builder defects/errors, latent (hidden) defects and structural defects. . .

A builder in this area just recently replaced windows in 150 homes, built in 2002. The hardware of the vertical windows were found to be "sub-standard" and the windows were not opening properly after a few years.

The law (actually a Senate Bill) was passed to protect builders from class-action suits.

Wow, on the hook for 10 years. That'd be great for me up here for my warranty management side of the business. Although, I'm sure builders wouldn't want to see the price I would charge for a 10 year contract.

[Eric C. Van De Ven]

Jim,
That has been going on here for years. As William said above.
I tell my Clients to have their attorney draw up an agreement stating that they will fix "everything" found deficient on the inspection report provided it is submitted within five days.
I do the inspection immediately after they close on the home. They get the report either later on that evening or the next day.
I expect every new home to be perfect. If it isn't, it gets written up. I have recommended that several new homes get repainted...among other things.

[John A. Sopher]

The state mandates how much insurance is required for me $25000 gen liability. I do however carry much more than required by state $600000 gen lib. If a builder tried to tell me something like that I would tell the client they are probably trying to hide something. Then I would recommend another builder to them. This could open the builder up to lawsuits also.