BETTER HOME INSPECTION REPORT
WRITING FOR LOWER LIABILITY
What were going to cover
• How to make your clients expectations more realistic
even before the inspection
• Writing “Every time” caveats directly in the report
• Examples of why certain items and systems could not
be inspected
• How to use photographs to clarify existing conditions
at the time of the inspection
Carry E&O Insurance
• Best way to limit your liability
• Sooner or later, a claim will have your name
on it.
• Try not to let it affect you personally
You get the dreaded call or letter
• You did an inspection for me about six months ago
and after I moved in I discovered the sewer pipe was
collapsed because of tree roots. It cost me $3,000 to
fix it. If I had known this I would have negotiated.
You told me you were going to do a thorough
inspection! How could you miss something so big?
• My hot water heater burst and it cost me $80,000 to
replace my one-of-a-kind mahogany wet bar and the
theater system. I had to replace all of the sheet rock,
the appliances and the carpeting, not to mention my
$10,000 Lionel train set. You were supposed to
protect me, that’s why I hired a home inspector. You
failed to inform me about the hot water heater and
I’m suing you.
• I had a roof leak and the contractor said the whole
roof needed to be replaced and asked me if I had the
house inspected. He said your inspector must have
been blind. You should have told me and now I’m out
$8,000. I’ll be contacting my attorney if you don’t pay
the bill.
• I had to replace the entire air-conditioning system
after you said it was fine. If I had known I would’ve
deducted $10,000 from the purchase price of my
home. I’ll see you in court.
• The electrical system started a fire in my
house. The whole house burnt down. I
thought you did a good job at the inspection
and you’re a nice guy but you’ll be getting a
letter from the insurance company’s attorney.
• I know you couldn’t get into the attic but the
exterminator said you should’ve seen the
raccoon urine on the ceiling. It cost me $8,000
to replace the insulation and sheet rock. My
brother-in-law is an attorney. If you don’t pay
for it I’m taking you to court.
• My son was electrocuted in the kitchen when
he tried to take the coffee pot out of the sink.
The GFCI was defective. You should have
discovered that in the inspection and now my
son is dead.
• I am an attorney representing Mr. and Mrs.
Smith. The gate for the swimming pool was
defective and a neighbors toddler fell into the
pool and drowned. You probably saw the
article in the newspaper. Unfortunately, you
missed the defective gate. Expect a very large
lawsuit and notify your insurance company.
• A dead tree fell on my house and killed my
dog. Now I have post traumatic stress
syndrome, I can’t work anymore, my wife
divorced me and I had to spend $20,000 for
repairs and $30,000 in psychiatrist bills which
Obama Care won’t cover because my doctor is
out of network. You’ll be getting a letter from
my attorneys, Cellino and Barnes, they said I
have a good case.
Include the pre-inspection agreement
in the report
• Most attorneys don’t know home inspection
law
• They don’t even look for a pre-inspection
agreement. If he reads the report hopefully he
will read the agreement
• Once he reads the agreement he may advise
his client not to proceed
Make your clients expectations more
realistic before the inspection
with an email to the client.
Do it a second time in the report
Expectations 1 - email
Suggested expectations for your home inspection:
• Your expectations regarding a home inspection
should be reasonable and realistic.
• Therefore, following are some basic points that
are standard within the home inspection industry
throughout the United States. Please keep these
points in mind as time goes on before and after
the inspection.
Expectations 2 – email
Read the Pre-Inspection Agreement
• The pre-inspection agreement is all about the
terms and conditions of the inspection. You
should understand it so that your expectations
are realistic
Expectations 3 - email
Read the report
• Read the inspection report. It may sound
funny, but many people don’t read the report
even though they spent good money on the
inspection of the largest investment of their
lives! Read the report thoroughly so you
understand the home and the limitations of a
home inspection.
Expectations 4 - email
Limit of Inspector’s Liability
• The inspectors liability is limited to the fee of
the inspection and no more. This is standard
in the inspection industry all over North
America.
• There would be no inspection industry if this
were not the case
Expectations 5 - email
Can only see what’s visible
• Inspectors can only inspect what is visible. We don’t have x-ray
vision. For example, inspectors cannot see inside of pipes, walls,
equipment, machinery, above ceiling tiles, behind insulation or
storage materials, etc. Sometimes, termites are active inside of the
wall without any outward appearance of their presence until
someone starts construction, removes the wall and then they
become visible. In addition, sometimes, there is no access to
certain parts of the home, or certain components or systems of the
home. Perhaps the garage was filled with boxes, access to the crawl
space was blocked, or there was a freezer in front of the main
electrical panel. It was impossible to observe the conditions of
these components during the inspection. There may be defects that
are not discovered during the inspection. Even if its a very
substantial defect, if it's not visible we can't bring it to your
attention. Please don't feel that your inspector "missed something"
if it was not visible during the inspection.
Expectations 6 - email
Effective on the date of the inspection
• Inspectors observe and report on conditions effective
on the date of the inspection. Because building systems
and components are in a constant state of "wearing
out" and things change as time goes on, inspectors can
only observe conditions as of the date of the
inspection, not a week, a month or a year later. As an
example during the inspection there were no cracks in
the foundation, however, after some slight settlement
a crack developed. You understand that you should
expect that components might be ready to fail without
any outward or visible signs, and things change over
time.
Expectations 7 - email
Major not minor functions
• Inspectors check to see if a component is doing its major
function, not minor functions. For example, a heating
system operates and puts out heat during the inspection,
but one of the radiators does not function correctly, or
perhaps the thermostat operates, but not well. One room
may be a different temperature than another. An appliance
operates but does not go through all of its cycles correctly.
These items may or may not be discovered during the
inspection. You should expect that some malfunctions and
abnormalities were not detected during the inspection.
Expectations 8 - email
• Sampling
• According to NY State law, inspectors use a
sampling technique. This means that not
every window or door gets checked. Not every
outlet gets checked. Not every radiator gets
checked. So you should expect that certain
items were not checked and may be defective.
That’s the nature of a home inspection.
Expectations 9 - email
Not code compliance
• According to NY State law, home inspections are not code
inspections. This is not a code compliance inspection or
certification. It is almost impossible for an inspector to accurately
state whether an item is within code or not. For example, a house
built in 1920 will have been built without any code in effect,
therefore, it is "grandfathered". Grandfathering means code
modifications after the date of the construction are not applicable.
In addition, different municipalities adopt different state and
federal codes at different times. Another complicating factor is
attributable to the complexity of codes: for example, there may be
10 different code measurements/requirements applicable to a
staircase. The only way to see if something is "within code" is to
have it checked by the municipal code inspector. Even the municipal
code inspector may not take into consideration certain elements of
the code.
Expectations 10
No warranty – can’t see into future
• Home inspections do not imply any kind of
warranty or guarantee of the structure or
components. We can’t see into the future so
we can't predict when an item or component
may fail. We are not an insurance company,
although there are many insurance companies
available that can offer a guarantee and make
a profit doing so.
Expectations 11
Problems? Call the inspector
ACCORDING TO THE PRE-INSPECTION AGREEMENT:
• If you think the inspector made an error, contact
the inspector and discuss the situation. The
inspector will likely want to visit the home and
see and understand the situation directly. Usually,
things can be explained and put into proper
perspective and/or an easy solution may be
identified. You will have the opportunity to
discuss things directly with your inspector.
Expectations 12
Contractors – Monday morning
quarterbacking
• It's easy to "Monday morning quarterback". Often, a contractor is
called in to make repairs or review certain conditions. Often, these
contractors will say "your inspector should have seen this - he
must've been blind! Keep in mind that the contractor makes his
living by doing more work so he may want to talk you into spending
more money. For example, a roof leak is discovered and needs a
minor repair. The roofing contractor is motivated to sell you a whole
roof job even though you don’t need it. In another example, you get
water in your basement because the gutters are clogged. You don’t
realize the reason for the water in your basement and call a
basement water proofing contractor who is motivated to sell you an
entire $15,000 French drain system when all you had to do is clean
your gutters. So, watch out for Monday morning quarterbacking by
a contractor.
Not technically Exhaustive
•
THIS IS NOT A TECHNICALLY EXHAUSTIVE INSPECTION: You are advised that you
can purchase a technically exhaustive inspection and that a fee for this type of
inspection could be $5,000 or more, depending on the home. The fee is so much
more because we will need to retain other specialists as necessary to prepare a
technically exhaustive report. Destructive testing (opening some walls and ceilings
for example) will be required and will necessitate the sellers approval. A request in
writing for this service must be accompanied by a 50% deposit required to
commence this inspection. If you wish this enhanced inspection please notify us
prior to the inspection and a new inspection date will be scheduled after an
appropriate pre-inspection agreement is entered into. Unless you purchase
this Technically Exhaustive Inspection you can not and must
not assume that we will report on all defects. Therefore you can not
and must not base all of your financial negotiations on the results of this
inspection. Nor should you base your budgeting for future repairs solely on this
inspection, because it is not realistic.
Writing caveats directly into
the report
Put the exclusions language directly
into the report if it’s applicable to all
reports
For example, exclude chimneys and
fireplaces. Exclude pest inspection
(different than termite inspection). You
don’t include every light or switch. You
don’t check indoor air quality.
In the electrical section of the report
• NOT ALL LIGHTS, OUTLETS AND SWITCHES WERE
CHECKED: We caution that not all outlets,
switches, or lighting fixtures were tested. Rather,
a random sample of these devices were checked.
It is very possible that one or more of the devices
is not working but not tested due to the random
sampling of fixtures and devices. This is in
keeping with NY Sate Home Inspection Law.
Please check them all at your final walk-thru.
Service contractor before the closing
• AIR-CONDITIONING /HEATING SYSTEM SERVICE
CONTRACT RECOMMENDED: It is recommended
that you enter into a service contract with a airconditioning system contractor for preventive
maintenance on the air-conditioning system and
have the contract take effect before the closing.
Also, have the service contractor accompany you
at the final walk-through and check the heating
and A/C system (if one is present) for proper
operation before the closing.
Three components to every comment
1) What is the issue, 2) what happens if you don’t
deal with the issue, 3) how to deal with the issue
HOT WATER HEATER APPROACHING END OF USEFUL LIFE: The hot water
heater is approaching the end of its useful life and should be replaced. This
work should be done by a qualified plumber. Please keep in mind the
following: sometimes hot water heaters start to leak very slowly with very
little impact on the surrounding area until the leak is discovered and the tank
is replaced. However, sometimes hot water heaters burst and flood with a
huge impact to the surrounding areas such as flooring, furniture, and walls. If
the tank bursts the water continues to flow until someone realizes the
problem and shuts off the water valve. By then, substantial damage and
flooding may have occurred. Therefore it is prudent to replace the hot water
now.
Final walk-thru check list
• BASEMENT:
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Look at the walls for any signs of leaks.
Make sure all stored items are removed.
Look for pipe leaks
Look for foundation cracks
COOLING AND HEATING SYSTEMS:
Turn the thermostat to a higher setting. Feel each radiator or register for warmth.
In the summer months, (exterior air temperature must be higher than 60 degrees)
turn the air
conditioning to a lower setting. Feel each register or room unit for cool air.
Obtain copies of all manufacturers manuals and warranties for the heating system and
air conditioning system if available.
Enter into a service agreement with HVAC contractor before closing and let them
check the systems at or before the final walk-thru
If the heating system is a heat pump or electric baseboard system, you should obtain
copies of the last 12 months electric bills to estimate your energy cost.
Operate all ceiling fans.
PLUMBING AND BATHROOMS:
• Run the water in all the sinks at the same time and flush the toilet
to check the pressure.
• Turn on the hot and cold water in each fixture.
• If not winterized turn on all hose bibs.
• Operate all fans.
ELECTRICAL
• Turn all light fixtures on and off.
• Test all smoke detectors. Confirm the presence of CO detectors
• If any work has been performed on the electrical system since the
home inspection, obtain the Fire Underwriters Certificate for same.
• Test all alarm systems.
• Obtain copies of all warranties and operating manuals. Get
information concerning any central monitoring companies as well
as a copy of their security agreement. Change all security codes
immediately after closing.
BASEMENT
• Look at the walls for any signs of water leaks
around the foundation
• Look at the pipes and around the mechanical
equipment for signs of leaks
• Make sure all stored items are removed
KITCHENS AND APPLIANCES
• Turn on the faucet and sprayer.
• Operate all appliances, fans and range hoods.
Don’t forget the washer and dryer.
• Check the brands of all appliances to make
sure they have not been replaced.
WINDOWS AND DOORS
• Open and close all windows and operate all locks.
• Operate any automatic garage door openers and
obtain the transmitters.
• Operate all door bells and intercoms.
• Change all exterior locks immediately after
closing.
ROOFS, GUTTERS AND
DOWNSPOUTS
• Check the interior of the home for leaks.
• Look for missing shingles, shakes, or tiles.
• Check to see that gutters and downspouts are
secure.
FIREPLACES AND STOVES
• Make sure your attorney has a c/o for the stove
or fireplace.
• Obtain operating and installation instructions
for stoves if available.
Software Checklist for what you
didn’t inspect
• What you didn’t inspect
• Why you didn’t inspect it
• The implications
Items not inspected
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Air-conditioning
Attic
Finished basement
Basement ceiling
Bathroom
Behind walls and ceiling
Below carpets and furniture
Bulkheads and Docks
Certificates of occupancy
Condo and co-op common
area
Crawlspace
Deck/porch/patio
Drainage around foundation
Driveways/walkways
Electrical
Ire escape
Fireplace
Fire sprinklers
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Garage
Generator
Geothermal system
Heating
Hot tub
Hot water heater
Indoor air quality
Insulation and sidewalls
Jacuzzi/hot tubs
Kitchen
Kitchen appliances
Lawn irrigation system
Specialty electronic systems
No search of public records
No warranty
Oil tank
Pests
Plumbing
Roof
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Rooms
Security system
Sewage system
Sheds/outbuildings
Slab construction
Smoke and carbon monoxide
detectors
Solar heating/electric
swimming pool
tennis court
Termite inspection
Utility not available
Washer and dryer
Window A/C units
Air conditioning systems
other
The end