The problem with receiving a demand letter from a former client or his lawyer is that it has to be responded to whether or not the claim has merit.
Most claims against home inspectors lack merit for one or more reasons. Generally, a meritless claim will fall into one of the following five categories:
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It seeks damages for something that is not contemplated by a home inspection, something for which the home inspector is not responsible. In other words, the item for which the claimant is seeking redress is something that is beyond the ability of a non-invasive visual home inspection to determine.
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It seeks damages for an item that is outside the Standard of Practice under which the inspection is being conducted.
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It seeks damages for an item that was concealed from the home inspector’s view at the time of the inspection.
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It seeks damages for an item for which the home inspector disclaimed responsibility because of inability to access the area of the home that contained that item.
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It seeks damages for something that the home inspector actually found and wrote up in
his inspection report.
There is a home inspector in New Jersey for whom I have written responses to three separate demand letters from former clients. All three of these claims were abandoned following my response.
This particular inspector happens to be an excellent inspector with vast experience and is extraordinarily busy. He conducts about 500 to 600 inspections a year. Not only is he an excellent inspector and highly reputable, he’s an extraordinarily nice and generous
man. He mentors new inspectors.
Because he does so many inspections annually, he has greater exposure to becoming a victim of a meritless claim by sheer dint of the number of inspections that he is conducting each year. Just as a driver who puts 50,000 miles on his car annually is more likely to have an accident than a driver who only drives 10,000 miles, the more successful you are as a home inspector, the more likely you are to be a victim of one of these meritless claims.
One case involved the inspection of a property whose roof he reported was “nearing the end of its useful life” and he cautioned the client that the roof would not last much longer. During the inspection, he was unable to get into the attic of the house due to excessive clutter. He was only able to pop his head into the attic and shine his flashlight around the ceiling of the attic.
As it happened, beyond the farthest rafter and, therefore, beyond his ability to see, there
was an active moisture stain. Since the attic was inaccessible, he disclaimed responsibility for any roof problems that might elude detection for that reason.
After the client moved into the house, he discovered that the roof leaked at the very point of the attic that was not viewable at the time of the inspection due to the clutter. As a result, the client wanted the home inspector to buy him a new roof.
The home inspector forwarded the client’s demand letter to me for response. I pointed out to the
claimant that he had no case against the home inspector because the inspector had advised him that the roof was in need of replacement and had disclaimed responsibility for the part of the attic that was inaccessible. Therefore, the home inspector was not negligent.
Furthermore, since the claimant had been told that the roof was near death, it was incumbent upon the claimant to factor that into his negotiation calculus. Since he did not do so, he was contributorily negligent, a circumstance that would bar any recovery in negligence.
Finally, I pointed out that even if the home inspector had been negligent, and even if the claimant had not been contributorily negligent, he still would not have been entitled to a new roof.
Under familiar principles of the Law of Damages, the only remedy that was available to him was replacement of the shingles in the affected area - about 4 square feet - depreciated by the 23 year age of the roof. In other words, bupkus!
The claimant was not happy and by and by I received a letter from an attorney asserting the same claim.
I called the attorney and when he came on the line, I greeted him and then asked him what he was “doing with this farkakte case!” Even if you know no Yiddish, you can probable ascertain what farkakte means. And that question, coming out of the mouth of this first-generation Irish-Catholic, always has a disarming effect on my Jewish colleagues. And it did not disappoint this time. The attorney immediately began moonwalking away from the size of the claim. “Look I know hes not entitled to a new roof but can you get $3,000 or $4,000?”]
So I had to advise the attorney that, not only was his client not entitled to a new roof, he was not entitled to anything! I told him to watch my video and “call me back in ten minutes.”
Chastened, he called me back and said “See if your guy is willing to throw anything at this case.”
So I did.
The client, having seen me get rid of two prior claims, said “Joe, I trust you. Use your judgment. I’m willing to pay up to $1000 to make this go away.”
So, I drafted a letter to the claimant’s attorney. In the letter I reiterated all the reasons why the claimant was not entitled to anything: the home inspector was not negligent, the claimant was negligent, and even if the home inspector had been negligent, which the incontrovertible evidence conclusively had established that he was not, and even if the claimant had not been negligent, which the incontrovertible evidence conclusively had established that he was, he still would not be entitled to anything!
But . . . I wrote . . . in the interest of client relations and to put this issue behind us, my client will make a goodwill payment of $500.00 in exchange for a complete release of liability.
So the letter was written. And I did not feel good about it.
As is my practice, I printed the letter out to proofread. As I was reading all the reasons why the claimant was not entitled to anything, it started to get my Irish up. Why, I asked myself, with all of these compelling reasons to deny this claim outright, am I giving this goniff anything.
So I rewrote the letter to delete the payment and substituted this:
“For $350, home inspectors are not expected to take a house apart and put it back together again. No reasonable person expects that. My client did point out significant problems with the roof that should have put your client on notice that there were major problems with the roof that warranted his attention. His decision not to act on that advice would bar all recovery under the Economic Loss Doctrine.
Accordingly, his claim is denied.”
I never heard from that attorney again.
How can you protect yourself from these frivolous claims?
To answer that question, I developed the Law and Disorder Seminar.
Next week I am embarking on a 50 City Tour with the Law and Disorder Seminar beginning in Dallas, Texas on January 28, 2009. The seminar is approved for 4 iNACHI CEUs, 4 ASHI MRCs and the following states: New Jersey, Massachusetts, Tennessee, Texas and Illinois. You can find out all the details about this seminar, including dates, cities by clicking here.
In this seminar, you will learn:
The 5 HABITS you MUST DEVELOP to lower your risk profile
How to establish the KILLER DEFENSE that will defeat ALL negligence claims
The MAGIC CONTRACT PROVISION that will DECREASE your LIABILITY, INCREASE your INSPECTION FEES, and SMOKE YOUR COMPETITION all at the same time
The MAGIC CONTRACT PROVISION that will PREVENT your client from TAKING YOU TO COURT
The 7 KEY FEATURES of a HIGHLY EFFECTIVE RESPONSE LETTER
The 7 KEY PROVISIONS that every Pre-Inspection should have.
How to TRANSFORM yourself from a VICTIM to an ALLY of the claimant