In August of 2019 I performed a inspection for the buyer, several issues including foundation issues were noted in the report. The sellers had the repairs made and they were correct. I found out that the buyers had more structural issues to arise after the purchase, the buyers decided to file this on there insurance, there insurance asked for the inspection report and have now told the buyers that they can pay for “now needed repairs” but will in turn sue me for the money they have to spend for structural repairs. Has anyone had any dealings with a issue like this and curious is this even possible?
Turn it into your E&O and let them handle it.
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Morning Greg.
Hope this post finds you well.
Fools errand filing with an insurance company after purchasing a home.
I am not privy to the report so I am going to interpret what you posted. Please, correct me if I am wrong.
Contractor were hired. Certain repairs made.
1: Contractor that worked on any structural issues will be dragged into the clam.
You previous client told you what the insurance broker told you over the phone.
This is Here Say.
Likely an employee for the insurance company talking without thinking.
This is what I read, ** "the buyers that they can pay for “now needed repairs”**
So, how could an insurance company sue you, the home inspector, for damages? They just told the owners to pay for their own repairs. Their claim was terminated.
In cases such as this, structural defects, a lawyer gets involve as well as an expert. Considerations, latent/patent. If/when deemed latent, the lawyer tries to sue the previous home owners for damages. It can go back 2 or 3 owners.
Greg. Do not file anything with your E&O broker until you are served with a written letter of notice.
Reach out to InterNACHI attorneys or Joseph Ferry at Claims Intercept for guidance.
All the best.
Robert Young
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We are certainly in “The Age Of Litigation” and anyone can sue anyone else for just about anything! The only ones that win when litigation occurs are the Attorneys as they will always get paid no matter who wins. Will they win in their lawsuit? Only time and the facts can tell that outcome.
If you don’t mind sharing what were the other “structural issues” that arose? Any idea specifically how they were discovered?
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Are you in a licensed state, did you follow its SOP? did you recommend “monitoring” or “it’s not an issue at this time” in any of your foundation/structure related comments in the report? Something is missing from the story.
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I should have provided a little bit more information… So, the home is raised on piers, upon initial inspection there were several piers that were leaning etc creating a unlevel floor inside the home. I was also unable to access the full area due to standing water from a disconnected plumbing drain line. The seller, being a licensed contractor, made all repairs himself. At the time of re-inspection the floor was level or to within a acceptable amount agreed upon by buyer and the piers were corrected. The disconnected drain lines were also repaired by seller. So, now the buyer closes on the house and moves in, the other day they reach out to there agent and complain that they have recently had to have other drain pipes and plumbing repaired and that they are having settlement issues that is causing the floor to be unlevel so they decided to file it on there insurance, and insurance has told then that they will pay for it and in turn sue me. Not sure how they think in liable for movement of a home almost two years later.
Yes I went by the SOP. Check out the post I just replied to. I should have included that in the O.P.
Thanks for the info.
Sounds like they bought a money pit and they’re trying to get everyone else to pay for it.
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My thoughts exactly, buyers remorse.
The only issue I see based on provided info is the re-inspection and approving of pier correction. The floor being “level” is not a method used to determine if piers were installed correctly. It’s much much more involved. This is why many don’t do re-inspections. To me, if you said it’s good, and then it failed, it’s on you. You have to word such comments very very carefully. There was “no way” for you to know if they were corrected “correctly”. At this point I would do like suggested, contact either an attorney and or your E&O to run it by them.
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Buyers first and biggest mistake letting seller make his own repairs.
This is why we shouldn’t do re-inspections.
If the buyer/seller had a third party contractor make the repairs you wouldn’t be having this conversation right now. The buyer’s REA should not have let that happen. This is an all around bad situation for everyone involved Except the seller who made a clean exit to the bank.
Sorry you have to deal with this, it sucks and maybe you will look at your business model for doing re-inspections. Do turn this over to your insurance carrier and or legal council. Best of luck moving forward.
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I am moving in that direction myself. Can-O-Worms.
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I’ve never been sued, but I was told that there is a formal and proper procedure that must be followed if someone suspects you might be liable for something. And if they fail to follow those procedures, they decrease their chance of a court settlement in their favor. Unless the repairs had to be made immediately for safety or heath, they need to first put you on notice of an error or omission and give you opportunity to see that condition prior to repair, and then you have the first right or responsibility to make repair. If you choose not to, then and only then can they can make the repair and sue you for costs. But to just come in after it’s all been repaired and expect you to simply pay them…that usually doesn’t make it to court or won’t get them far as they failed to follow proper procedure. Or if it does, you can challenge their repair method or costs and show how you might have done it differently and cheaper.
Could someone who knows what the proper procedure is chime in, I’m just going on what we were told by an Insurance company at a past InterNACHI chapter meeting.
In all my years, I never did a re-inspection, unless it was so obvious that a blind man could have done it. 
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I just did a 36 item reinspect. No matter my legal verbiage, I feel my backside is exposed.
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Either your client is lying to you or they have misconstrued something that their insurance adjuster told them, IMO. I am a licensed public adjuster, not an attorney. None of the following is to be construed as “legal advice”, but general information about homeowner insurance policy and protocol.
First, Mississippi homeowner insurance policies exclude (meaning, they don’t pay for) earth movement damage. Settlement is not covered under the policy. Here is more on that: Mississippi Supreme Court Addresses Earth Movement Exclusion | Traub Lieberman.
Second, in order for the insurance company to subrogate (collect from you what they pay their client), you have to be the cause of the covered damage, which you did not (even if the damage was covered under the policy, which it is not).
Third, insurance company adjusters are not privy to what insurance legal departments plan to do or not do … and insurance legal departments do not usually advise policyholders of their plans to subrogate until the suit is filed and they request an interview with the client.
Fourth, you have no duty to the insurance company in that they did not rely upon your report to issue the policy.
It sounds as if your client filed a claim, had it denied, and is taking it out on you.
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I’m with Jim… sounds like a fishing expedition to me, don’t get caught.
The lesson here of course is never, and I mean never reinspect repairs which require a building permit prior to commencement of work as home inspectors are rarely the authority having jurisdiction to determine if the repair meets the code.
Look at it this way when someone is willing to pay for a reinspection what they are really purchasing is a patsy to own the problem in the event something goes wrong, and you don’t want to be that guy.
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I wouldn’t do anything until you are served an official notice or summons.
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Are you a structural engineer? Did You state in your report the reason you could not evaluate all areas to the foundation? Did you report to have a structural engineer further evaluate and make any repairs to the home. If you did then you should not be going back to reinspect a repair which you called for in your reporting. You are not qualified to check the work designed and repaired by a structural engineer. Is the home owner contractor a structural engineer. If he is let him prove the repairs are adequate. The insurance company many times will settle rather than spend money to fight for you even when you are wright, Remember to document all conversations and say as little as possible on this issue. You may have to hire an attorney to get them off your back.