Sued and lost...

[James H. Bushart]

Originally Posted by clawrenson

So if insurance protects the inspector (minus their deductible and possible legal fees) and the insurance company is on the hook for the "error/omission" of the inspector, would it not be fair to say that the consumer (client) has some protection offered by the inspectors insurance?

Now take that scenario through an uninsured inspector, how long do you think it will take for that $200,000 judgement against the uninsured inspector to expediently pay that amount, or quickly close up their business?

Which consumer has less risk?

Do you really think this inspector will be eligible for insurance renewal, or likely dropped?

You address several issues with your questions that are contingent upon certain points not included in your question.

First...the insurance company has yet to address the judge's ruling by appeal. When they do (for they assuredly will) they would be prudent to raise the issue as to how much of the consumer's loss is due to the inspector's error, how much is due to his own failure to detect the conditions, and how much is due to the seller's failure to disclose. Is their client only "half" responsible by which they may assume half the debt?

It is unreasonable for anyone to assume that a man with a flashlight will know as much in two and a half hours about the condition of a home as the person who lived in it the previous 15 years. What duty did the seller fail to honor that contributed?

Second...we have to ask each other how likely it would be for the judge to have made this ruling in the absence of E&O insurance. Does he really...truly...have legal and moral grounds to believe that a consumer's $300 inspection fee entitles him to a $200,000 warranty or is he taking into consideration the availability of passing the problem off to the insurance company who accepted the gamble by accepting the premium?

The answers will be found through the appeal process.

Is the consumer "protected" because I have insurance? If my "Second" point above is correct, I will say "yes", but only to the extent allowed in the award granted in the appeal. Again, the inspector and his insurance company are in business to NOT PAY on claims. To call "insurance" a "protection" for a client is like expecting the Internal Revenue Service to "protect" you from paying too much tax resulting from an audit.

Will the inspector be eligible for insurance renewal? Probably not, which adds proof to the fallacy of licensing. This isolated inspection took place in 2006. We can presume that the inspector has continued to inspect in the three years that followed this inspection without incident (for any additional claims would have been introduced as evidence regarding a trend or his propensity for negligence). And while having his insurance renewed in 2007, 2008 and 2009....it is possible that he can lose it, his license, and his ability to earn a living...not for his abilities as an inspector today, but for something that happened four years ago. His three additional years of presumably successful experience, along with all of the valuable life lessons learned from his mistake in 2006, will be thrown aside with his business.....and in his place.....the public will get a newly licensed, less experienced, less knowledgeable inspector who has - an hour ago - just met the minimum basic standard to carry a license and begin to do business.

Licensing solves nothing.

[tadshead]

Here is the judgement as put out by the court;

http://www.courts.gov.bc.ca/jdb-txt/...09BCSC1515.htm

From everything I can see, the guy really asked for this to happen.

First off, he was rude to his customers at the inspection. Yes, its a ***** when someone doesn't show up on time for an appointment, but ******** your customers out is a good way to make sure they have a grudge against you.

The inspection itself is a little difficult to critique seems we don't know if there was free access to the issues he missed, but we can tell a few very important things.

1) He didn't put the required time and effort into the inspection or the report
2) He provided estimates for repairs.
3) He didn't emphasis the importance of getting a qualified engineer (or any other qualified person) to check these issues immediately

When I first heard about this, it did give me pause, but after reading the actual facts (as presented in the court judgement), this isn't a case of a home inspector getting unfairly blamed or targeted.

It's a case of an idiotic inspector...

One other thing I feel should be pointed out.

The Code of Ethics and Standards of Practice of the Canadian Association of Home and Property Inspectors (CAHPI) is almost identical to the one here at NACHI. As is the contract he used with the clients. There is no reason (that I can see) that this couldn't happen to a ****ty inspector who was a member here.

Either do the job right, or expect to pay the consequences...

I am curious about something though. If this had been a NACHI member, what action would be taken by NACHI when this came to their attention?

[tadshead]

Originally Posted by jbushart

It is unreasonable for anyone to assume that a man with a flashlight will know as much in two and a half hours about the condition of a home as the person who lived in it the previous 15 years. What duty did the seller fail to honor that contributed?

So, by this logic, if an home owner calls up and says, I've owned this house for 15 years and would like a home inspection for maintenance and upkeep purposes, you would turn them away and tell them they were unreasonable in expecting to learn anything new from it?

[James H. Bushart]

Originally Posted by tadshead

So, by this logic, if an home owner calls up and says, I've owned this house for 15 years and would like a home inspection for maintenance and upkeep purposes, you would turn them away and tell them they were unreasonable in expecting to learn anything new from it?

Why would someone who knows everything about their home call me for a "maintenance"inspection?

The seller in the case we are discussing had water intrusion that was soaking structural lumber.....that was visible and able to be detected in a non-invasive inspection....and the moisture was extensive enough, and the intrusion had been going on long enough, to turn the wood to mush. It is imposssible...unless the seller was bedridden...for him to be oblivious to this issue.

When sellers lie, withhold information, or otherwise attempt to conceal a material defect they own a share of the buyer's damages. It is illogical to conclude otherwise.

[tadshead]

Actually, it is generally assumed that sellers DO lie about their properties, that is precisely why buyers should hire a professional home inspector.

As for why a homeowner would call you, who said anything about them knowing everything about their house? Your words were not, "if a homeowner knows everything about their home", but "as the person who lived in it the previous 15 years". The two are not the same....

To make the point as clear as possible though, even if a homeowner did feel they knew everything about their home, why would this preclude them hiring a PROFESSIONAL HOME INSPECTOR, to give them a PROFESSIONAL OPINION on the state of their home?

In the case of buying and selling, why would anyone EVER take the owner at their word about the condition of their home? Even if the owner truly tried to be upfront and honest in their opinions about the condition of the home, they are still trying to sell it and as such, are biased about it's condition.

To ensure there is no mis-understanding here, I am not stating that what I say is right from anyones point of view except mine. I am new to the home inspection field, but my background is in buying and selling houses (flipping) and I have seen more then my share of both buyers and sellers and been on both sides of the table at various stages. The things I have pointed out here are from that perspective.

What I want from this discussion is to understand how the people currently operating in the field feel and how they have handled things in their businesses.

[James H. Bushart]

Originally Posted by tadshead

Actually, it is generally assumed that sellers DO lie about their properties, that is precisely why buyers should hire a professional home inspector.

As for why a homeowner would call you, who said anything about them knowing everything about their house? Your words were not, "if a homeowner knows everything about their home", but "as the person who lived in it the previous 15 years". The two are not the same....

To make the point as clear as possible though, even if a homeowner did feel they knew everything about their home, why would this preclude them hiring a PROFESSIONAL HOME INSPECTOR, to give them a PROFESSIONAL OPINION on the state of their home?

In the case of buying and selling, why would anyone EVER take the owner at their word about the condition of their home? Even if the owner truly tried to be upfront and honest in their opinions about the condition of the home, they are still trying to sell it and as such, are biased about it's condition.

To ensure there is no mis-understanding here, I am not stating that what I say is right from anyones point of view except mine. I am new to the home inspection field, but my background is in buying and selling houses (flipping) and I have seen more then my share of both buyers and sellers and been on both sides of the table various stages. The things I have pointed out here are from that perspective.

What I want from this discussion is to understand how the people currently operating in the field feel and how they have handled things in their businesses.

The idea that a home inspector is somehow remiss by not reporting on every single defect is an invention of licensing proponents.

The buyer is ultimately responsible for his own decision to buy. He does this with information provided to him by the seller and by the home inspector. Not all defects are going to be detected by an inspector in a non-invasive inspection. Even "super contractor" Mike Holmes has to knock down a few walls to find what an inspector "missed".

Home owners have a duty to disclose material defects that are known to them to the same extent that the home inspector has to record those that are revealed in his non-invasive inspection.

This from a Canadian attorney:

Should the onus be placed on the seller of a home to report any serious defects? Steinbach lawyer John Neufeld says the system would be far more efficient if the seller were made to disclose defects up front rather than leaving that up to the buyer to discover the hard way. Neufeld made that recommendation in a report to the Manitoba Securities Commission. Waldo Neustaedter with Century 21 Gold Key Realty in Steinbach thinks this is a valid recommendation however he thinks it would be tough to enforce. For example, he asks, how do you you know that after a house has been sold, and there are latent defects, that those defects were intentionally left off the property condition statement? Neustaedter says that is the ultimate question, and one he doesn't have an answer for. Latent defects are those that are present but not apparent. Neustaedter says even a home inspector won't always catch them.

[tadshead]

At no point did I see any mention of a reason the inspector didn't inspect the structure framing on the other end of the house. If there was some form of interference in the ability of the inspector to see the other defects, why did he not make an issue of it in court?

If somebody sues me over missing something that my access was blocked to, you can be sure I will bring it up and make an issue of it.

Of course, even before getting to that point, with the cost of picture/video recording equipment (even three years ago) and available computer technology, the whole issue could have been avoided from the start. IF (and this is the big point here), he had been doing a thorough and proper inspection in the first place. He would have been able to walk into court and say, here, this was the condition of the house as I saw it and these were the inaccessible areas that contained the structure in question. And the case would have went away all by itself.

Oh, and back to the question of why a homeowner would call you after knowing all about their house and living there for 15 years...

They would call you in order to see what would be issues if they decided to go ahead and sell it later. Something especially attractive to an aging population looking for options. It is actually a market that I think more inspectors should be pursuing. Instead of constantly being put in the position between a seller and a buyer, go to the home owner long before they consider becoming a seller. It eliminates the whole idea that you may be fudging the report to help the buyer (which almost always crosses a sellers mind when they see negative on a report).

Of course, on the original point of all this, whomever hires the inspector should be able to expect a professional inspection AND a professional inspector. Not in regards to a piece of paper, but in terms of attitude and performance. The people who bought this house did not receive either in my opinion.

[James H. Bushart]

Originally Posted by tadshead

At no point did I see any mention of a reason the inspector didn't inspect the structure framing on the other end of the house. If there was some form of interference in the ability of the inspector to see the other defects, why did he not make an issue of it in court?

If somebody sues me over missing something that my access was blocked to, you can be sure I will bring it up and make an issue of it.

Of course, even before getting to that point, with the cost of picture/video recording equipment (even three years ago) and available computer technology, the whole issue could have been avoided from the start. IF (and this is the big point here), he had been doing a thorough and proper inspection in the first place. He would have been able to walk into court and say, here, this was the condition of the house as I saw it and these were the inaccessible areas that contained the structure in question. And the case would have went away all by itself.

Oh, and back to the question of why a homeowner would call you after knowing all about their house and living there for 15 years...

They would call you in order to see what would be issues if they decided to go ahead and sell it later. Something especially attractive to an aging population looking for options. It is actually a market that I think more inspectors should be pursuing. Instead of constantly being put in the position between a seller and a buyer, go to the home owner long before they consider becoming a seller. It eliminates the whole idea that you may be fudging the report to help the buyer (which almost always crosses a sellers mind when they see negative on a report).

Of course, on the original point of all this, whomever hires the inspector should be able to expect a professional inspection AND a professional inspector. Not in regards to a piece of paper, but in terms of attitude and performance. The people who bought this house did not receive either in my opinion.

For the sake of those who believe that licensing is the solution to everything....please quantify "attitude" and "performance" in such a way that it can be measured and included in a licensing law. Thanks.

[tadshead]

I have never done something for the sake of those who think licensing is the solution to anything and I can't see me starting now.

However, for the sake of someone wondering about the issue, I will quantify them as best I can in the terms of the example of this case.

He showed absolute un-professionalism and childishness in berating his customers for being late.

Yes, it was disrespectful of his time, but they are paying for his time. Giving the report and explaining it to them is part of the time he should be prepared to spend in being a home inspector, and people being late is not uncommon enough to get upset about when it happens. From strictly a business point of view, it leads to hard feelings and lawsuits and no referrals or repeat business. That is a bad attitude that pushes people away from your business...

His inspection of a million dollar house should have been thorough enough to ensure the people at least knew what they were buying. It has nothing to do with his time, or how important it is or valuable to him, he agreed to inspect it, he should have been prepared to spend enough time to look at everything, note it down, including clear photos, backing up any claims he may have made concerning accessibility. His schedule should have also included the time to take his clients through and point out the serious defects he found (or should have found) and explain why his report said what it did.

Let's look at what is said in the court documents...

At Trial, Mr. Toth stated that it was his “usual practice” that approximately 99% of his written report was “fully blank until the presentation with my client starts”, but that, if the client was not present, then “for time management and killing the empty time”, he would fill in most if not all of the written portion of his report prior to the client being present.

To me, this sounds like he walks around a house and gives a glance over anything, perhaps taking a moment to examine anything that catches his attention and then waits for his client to show up. He apparently doesn't take any time to think of the causes of a situation he finds or what it may mean to other parts of the house. (ie, not checking the whole structure after finding part of it seriously deficient)

Everything about this screams a lack of professionalism in terms of doing a job correctly and with care.

Oh and the licensing issue people keep wanting to toss up...

All you have to do is look at any road traffic to see how much licensing matters.

Or look at hunters... we just had a hunter the other day stop his truck on the edge of our property to take a shot at something he 'thought' he saw in the bush... on the other side of that bush (about 300 feet), is my house... I didn't ask him to see his license... although I would bet he had one... I just politely suggested a new holster for his rifle if he seriously thought it was a good idea to fire guns towards my home.

A piece of paper, will never make up for bad attitude or a lack of professionalism, just like a lack of the same paper should never be a hindrance to being a professional.

[James H. Bushart]

Originally Posted by tadshead

I have never done something for the sake of those who think licensing is the solution to anything and I can't see me starting now.

However, for the sake of someone wondering about the issue, I will quantify them as best I can in the terms of the example of this case.

He showed absolute un-professionalism and childishness in berating his customers for being late.

Yes, it was disrespectful of his time, but they are paying for his time. Giving the report and explaining it to them is part of the time he should be prepared to spend in being a home inspector, and people being late is not uncommon enough to get upset about when it happens. From strictly a business point of view, it leads to hard feelings and lawsuits and no referrals or repeat business. That is a bad attitude that pushes people away from your business...

His inspection of a million dollar house should have been thorough enough to ensure the people at least knew what they were buying. It has nothing to do with his time, or how important it is or valuable to him, he agreed to inspect it, he should have been prepared to spend enough time to look at everything, note it down, including clear photos, backing up any claims he may have made concerning accessibility. His schedule should have also included the time to take his clients through and point out the serious defects he found (or should have found) and explain why his report said what it did.

Let's look at what is said in the court documents...



To me, this sounds like he walks around a house and gives a glance over anything, perhaps taking a moment to examine anything that catches his attention and then waits for his client to show up. He apparently doesn't take any time to think of the causes of a situation he finds or what it may mean to other parts of the house. (ie, not checking the whole structure after finding part of it seriously deficient)

Everything about this screams a lack of professionalism in terms of doing a job correctly and with care.

Oh and the licensing issue people keep wanting to toss up...

All you have to do is look at any road traffic to see how much licensing matters.

Or look at hunters... we just had a hunter the other day stop his truck on the edge of our property to take a shot at something he 'thought' he saw in the bush... on the other side of that bush (about 300 feet), is my house... I didn't ask him to see his license... although I would bet he had one... I just politely suggested a new holster for his rifle if he seriously thought it was a good idea to fire guns towards my home.

A piece of paper, will never make up for bad attitude or a lack of professionalism, just like a lack of the same paper should never be a hindrance to being a professional.

You are quoting from what the plaintiff alleged in court. While it may or may not be true, it is still only half of the story.

Still....you did not quantify "attitude" and "professionalism". How is it scored on a test?

[tadshead]

I am quoting the guy saying what he did, and then commenting on it... why would I need another part of the story for anything that I said? Toth is the inspector, he is the one that was paid, he is the one that bitched at his customers, he is the one that did a half-assed (to be generous) job, going by HIS statements.

And no, I didn't quantify it in terms of a test, AS I DON'T SUPPORT LICENSING as a solution to anything.

[James H. Bushart]

HST legislation means big tax increase on home buyers, sellers and owners, say Ontario REALTORS(R)

TORONTO, Nov. 16 /CNW/ - Today the Government of Ontario formally launched its latest assault on homeowners, purchasers and sellers with the introduction of Bill 218, the Ontario Tax Plan for More Jobs and Growth Act, 2009, says the Ontario Real Estate Association.
Effective July 1, 2010, home buyers and sellers will pay 8 per cent more on legal fees, appraisals, real estate commissions, home inspection fees, and moving costs, adding about $1,500 in new taxes to the average residential real estate transaction in Ontario.
For homeowners the HST will also add hundreds of dollars in additional tax on utility bills, such as gas, electricity and home heating fuel, on home renovation labour, the cost of lawn upkeep or landscaping and the cost of snow removal.

QUOTES:

"The Government of Ontario can try to sell the HST any number of ways but starting July 1, 2010 the taxes on buying, selling and owning a home in our province will go up," said Pauline Aunger, President of OREA.
"Ontario's housing market is vital to the health of our provincial economy," said President Aunger. "An HST on homeownership will reduce housing affordability and increase the tax burden for Ontario families."
"In the last decade, Ontario's homeowners have faced a barrage of government imposed costs," said President Aunger. "From municipal land transfer taxes to sky rocketing property taxes and now the HST, homeowners are once again being forced to foot the bill for this government's legislative agenda."

QUICK FACTS:

The HST combines the PST and GST into one value added tax, meaning that the 8 per cent PST will be applied to list of goods and services that were previously exempt. The government plans to begin charging the HST to consumers on July 1, 2010.
OREA estimates that the new tax will add $1,449 in new taxes to an average resale home costing $302,354. OREA also estimates that the HST will add an estimated $262 million in new taxes annually to residential resale real estate transactions.
Homeowners will also have to pay an additional 8 per cent on many services required to maintain their homes. These services were previously exempt from PST and include utilities, home renovation labour, landscaping, snow removal and many others. OREA estimates HST on these services will add $480 in annual tax to the homeowner (based on a family that budgets $500 per month for such costs).
Ontario's real estate industry is essential to the provincial economy. In 2008, real estate in Ontario accounted for $56.6 billion in sales, $6.01 billion in ancillary economic spending and $1.35 billion in land transfer tax revenue to the provincial government. In addition, independent research indicates that resale housing market creates 80,000 direct and indirect jobs.
OREA represents 47,000 brokers and salespeople who are members of the 42 real estate boards throughout the province. OREA serves its members through a wide variety of professional publications, educational programs, advocacy and other services.

[tadshead]

What does any of that have to do with the subject of the thread?

[Vern Mitchinson, CMI]

Originally Posted by mnicholet

If you listened to the CBC radio interview on November 12th, Owen Dickie, President of CAHPI(BC) stated he would file a formal complaint within the association himself, if nobody else does.

So if I read this right hes going after the inspector. Is this correct?

I agree with Claude it will be interesting to see what type of discipline comes out of this up to and or including loss of licence.

CAHPI does ensure that the member was/is insured for over 1 million dollars. Therefore, the clients now have a blanket of protection with this court order.

CAHPI does not certify inspectors. CAHPI does have academic and field testing and mentoring requirements. Could have, should have, would have... we can always make it harder to become a home inspector.

What? They sure do.

No association takes on legal and or financial responsibility for their members mistakes/actions including InterNACHI.

The medical doctors follow a policy to defend their members all the way to the supreme court of Canada if neccessary. Other associations may have this policy.

[Vern Mitchinson, CMI]

Originally Posted by clawrenson

So if insurance protects the inspector (minus their deductible and possible legal fees) and the insurance company is on the hook for the "error/omission" of the inspector, would it not be fair to say that the consumer (client) has some protection offered by the inspectors insurance?

Now take that scenario through an uninsured inspector, how long do you think it will take for that $200,000 judgement against the uninsured inspector to expediently pay that amount, or quickly close up their business?

Which consumer has less risk?

Do you really think this inspector will be eligible for insurance renewal, or likely dropped?

I believe that CAHPI/BC has a self insured fund that is run by a board with very loose controls or regulations. I also believe that this board can decide whether or not you are covered.
Can anybody from BC explain this?
Since this case predated licencing this self insurance would not apply.