Liability to Seller

[Jack McCarthy]

Does anyone have any experience with a seller gone nutty?

I sited possible mold in my report to the buyer, my client.
Suggested getting 2nd opinion and gave the buyer several names as a resource.

Sale fell through and Seller's demanding my insurance info
etc...

At this point I'm ignoring the demand as I have no obligation to the Seller and a contractual privacy obligation to my client.

Jack

[William E. Siegel]

Did you have pictures in your report to back it up.

Was this the only reason the buyers backed out.

[Nick Gromicko]

You have no duty to the seller to be correct about anything. He is not your client. It wouldn't matter if you were wrong about everything and the buyer walked because of your incorrect reporting. A buyer is free to purchase bad advice and act on that bad advice.

[Gary L. Farnsworth, CMI]

I did an inspection on a home that was a nice 10 year old two story. The siding and trim was dry rotted so severely that I suggested that the siding and the trim "affected areas" needed to be replaced. Seller treatened all kinds of action. I stood behind my report. Buyer walked; but not for the dry rot reasons. I found out later that the seller's wife would not leave the curtains that matched the wallpaper, so the buyer's walked. They used my dry rot excuse to call me, and say all kinds of crap. Stand behind your report; you never know what the other reasons could actually be. It is not the seller's business anyway.

[James H. Bushart]

There is a lawsuit pending in Texas where the seller is claiming tortious interference with his sale.

The inspector went outside of the SOP and commented, incorrectly, on issues that were not a part of a home inspection.

The court agreed with the Plaintiff's claim that the SOP is NOT a minimum standard, but an "industry standard" defining what an inspector does. For an inspector to deviate from that standard in such a manner as to interfere with the seller's sale of his product constituted tortious interference. The defendant's request for a summary dismissal was denied.

The plaintiff asked for 10 years worth of reports and advertising and, over the defendant's objection, was awarded them.

The case is still pending. Joe Farsetta is writing a review of this case. The outcome will certainly affect how many do business.

[Jack McCarthy]

Actually, the Seller's agent, his sister! claims he simply got cold feet. The seller had apparently initially offered to remedy the situation, buyer backed out anyway. Now they claim it was because of the mold issue.

[Joe Farsetta]

Go to our Texas thread. Read about the sellers lawsuit. It is REAL, and was not dismissed. More disturbing is the fact that so far, the court has given the seller everything he demanded fr in doscovery( from the inspector, over his objections) and has virtually denied all the inspectors discovery requests.

TO say that the inspector has no duty to the seller is erroneous, as he has a duty to be honest and not interfere. The first part is key, and it is the contention of the seller that the inspector was not qualified, brioke the law, and overstepped the SOP. HE alleged malicious intent based on the inspectors actions and claims tortious interference.

[James E. Braun, CMI]

I have had more sellers threaten to sue me than buyers and some of the Realtors are encouraging it. I have learned to watch what I write in a report.
As soon as I hear something going south on a negotiation because of some deficiencies found at an inspection, I automatically start gathering information together to defend myself when I receive that phone call, email or certified letter. You gotted to head it off right away before they take off your head. It is a hell of a way to live. Sad but true.
It does help to be the most certified inspector in your area so are you have to do is prove that their contractor is an idiot. It is not really all that hard in my area but takes up a lot of my time.

[Joe Funderburk, CMI]

Give him the name and number of the regulating authority in your state, if you are a licensed state. I'd rather have an irate seller file a formal regulatory complaint (that I could easily defend) than seek a lawyer.

[Gary L. Farnsworth, CMI]

What if the "regulating authority" is a state appointed home inspection board run by all ASHI members? You are not an ASHI member, but a member of NACHI; your license is gone.

[Joe Funderburk, CMI]

I think it would take much more than that to loose your license.

[Blaine Wiley]

We've had many debates over the years about "exceeding" or going outside of the SOP and its protections. This case could set a dangerous precedent, although in TX they have a far more rigorous SOP than most other states or associations.

[James H. Bushart]

Originally Posted by bwiley

We've had many debates over the years about "exceeding" or going outside of the SOP and its protections. This case could set a dangerous precedent, although in TX they have a far more rigorous SOP than most other states or associations.

Rigorous or not....it is the standard that is agreed to by contract. When you go outside of the SOP and report something as defective that you did not contract to inspect, the seller has the right to suspect that you are going out of your way to kill his deal, IMO.

Is the objective of the inspection to keep looking, and looking, and looking, and looking until finally finding a reason to kill the deal? Or is the inspection a controlled set of guidelines as to what the inspector will inspect and report on as a normal part of his report, as modified in advance at the request of the buyer (when applicable) and made a part of the contract?

Sellers have rights, too.

[Mike O'Handley]

I think an SOP sets the minimum standard of care that we are supposed to provide and I don't see an issue with an inspector going beyond the SOP as long as the inspector is legitimately working to complete as thorough an assessment of the property as he or she can.

Many professions have levels of practice that are considered the minimum standard of care and they don't prohibit a practitioner from going beyond that if the practitioner is qualified to do so and is doing so in the interest of the consumer that the standard is meant to protect. Would you want a surgeon working on you to work only to the minimum standard of care or would you want that surgeon doing his best to fix everything that's wrong?

In the Texas case, the buyer's advocate, the inspector, was hired by the buyer and contracted to do a thorough inspection of the home. It appears from the report that the inspector did as thorough a job as he possibly could and did not do less than was expected of him by the terms of his contract. Whether he actually unlawfully "practiced" engineering is another issue; but if he didn't do any less than he was expected to do, and he wasn't intentionally out "to get" the seller, I don't see where the seller has a right to sue him for tortious interference.

Think about it, if he wins this case, what's to stop an auto dealer, when a customer walks, from suing a mechanic that looked at a car for defects on behalf of the buyer? Will brokerage houses be able to sue competing houses' brokers when their advice causes clients to switch who they do business with? The list goes on and on.

It's interesting that a lawyer would sue a home inspector for this; after all, lawyers, like inspectors, are hired to be their clients' advocates. Lawyers, like home inspectors, are paid for their opinion and advice. Have any of you ever heard of a business suing a customer's lawyer for tortious interference when/if a customer sues the business for negligence or decides, based on the lawyer's legal advice, to stop doing business with that firm?

Ever heard of a seller suing a realtor because the realtor, who is also the buyer's advocate, decided halfway through an inspection that the house had too many issues and recommended that the client bail out of the deal rather than go forward?

Someone said that the seller eventually sold his house for the price he'd listed it for initially. If he did, where's he been damaged? This is a ticked-off seller bearing a grudge and nothing more. One hopes that the jury can see that or that the attorney acting for the inspector will make them see it clearly.

ONE TEAM - ONE FIGHT!!!

Mike O'Handley, LHI
Your Inspector LLC.
Kenmore, Washington
Wa. Lic. Home Inspector #202