I am glad that you have this exercise, I originally got intrigued by why you would form an llc o S corp and it led me to some different rabbit holes that will help you avoid lawsuits, from a simple stop sign, to a customer satisfying survey, etc…
On my original topic that intrigue me of creating an LLC or S-Corp, I am glad that I read it, because my wife and I were discussing it the other day and she was thinking maybe not doing llc right away, because I might have to pay more taxes since i am a business. Now, that I read a few articles I am definitely going to start as an llc and make sure that all my marketing, contracts, bank accounts are setup as my LLC and state LLC and make sure that I act as the manager and not market myself as the CEO or some random title that might be construe that we are bigger than what we are. One question that I have, which i don’t think i saw in the reading is whether I could say the I am an owner of the llc, in my business website or business cards? Or will it be best to have manager as your title for an llc?
There is abundant possibility for temptation to stray from the ethical path in home inspections. As mentioned above, if propositioned by a home seller to go easy on a deficiency for some sort of compensation, the Inspector must choose the virtuous path, not only for his peace of mind, but also because the likelihood of being sued by the homebuyer for missing an obvious situation is highly likely.
I was recently doing a pre-sale inspection in a home where the bathrooms were literally untouched from the 1950s. While checking the water flow in the tub, the cold water knob came off in my hand, and would not go back on, so the water flowed unchecked. I found the owner and said, Maam, my job is to find deficiencies in the systems of your house, and while I do not like to cause damage, I need to discuss this situation with you.
I told her the faucets were very old, and likely to fail at any point. I asked her if she had a reliable plumber she could call; when she said she did not, I called one that I know, and he showed up quickly and was able to at least stop the water flow, if not repair the fixture.
When it came time to pay the plumbers bill, I hesitated for second, thinking that I should bear some liability for the charge, but then quickly reconsidered; the handle would have been broken by the next person to touch it in regular use, and that I had found a pre-sale deficiency in her home that another inspector would certainly have found.
The easiest way to manage expectations and avoid a statute of frauds suit is to have the client sign the contact prior to performing the inspection.
a signed contract will guarantee all the protections afforded within the contract should a dispute arise. although it is possible to uphold an unsigned contract in court, it is much easier, and also makes limitations of the inspection known to the client before hand, potentially preventing disputes from arising in the first place.
Let’s say that a realtor makes a promise to favorably promote me as a preferred inspector to potential clients in exchange for something (fee, use of ski cabin, etc.). I would have to inform the realtor that doing so is in violation of the Code of Ethics and I will not accept such an offer. This should also caution me as to the unscrupulous nature of this individual.
For my discussion on ethical challenges, I will use an example of the wishes expressed by the home buyer’s realtor, and the objective conditions noted by the inspector. A challenge could arise if, for example, the home buyer would really like to have a new deck installed, as the existing one, while acceptable, is ugly. The realtor approaches the inspector suggesting their idea, in the hopes of influencing the inspector to cast doubt on the condition of the existing deck. The inspector could feel tremendous pressure to make negative, subjective, and possibly unfounded statements about he condition of the deck. Ultimately, while the pressure and temptation may exist, the inspector must rely on their professional training, and commitment to an ethical standard. As an InterNACHI certified home inspector, they can take comfort in the fact they are bound to a well developed scope of practice, and a solid code of ethics. If the inspector were not comfortable telling the realtor their suggestions are clearly unethical, the inspector could at a minimum refer the realtor to the COE.
I choose, " No visible evidence" language may be evidence against you." The article is a brief description of possible pitfalls of the inspector’s use of this phrase. The challenge is to present and objective observation of a component or system condition, to a client. The article points out hat while most people would understand the meaning of " no visible evidence", some may believe it to mean the condition in question simply does not exist. While an inspector may believe the language to be clear, a Court may find it to be ambiguous, thereby supporting the claimant’s position. As the article points out, our role in not to inspect everything that is “visible”, but to simply to report on those observed and deemed material.
Additionally, the article addresses the challenge of the term “evidence”. The word has such a significant perception of permanence, its use can lead one to believe a condition may have always existed, or may have never existed. Either is problematic.
Ultimately the recommendation is to replace " no visible evidence of ( defect) with, "I did not observe ( defect) during my inspection.
I arrived to a scheduled home inspection one morning. I was advised that neither the home buyer or seller would be present. To my surprise, the seller was home. I was greeted kindly at the door. I shook hands and let the seller know what I was here to do. The seller let me proceed with the inspection for about an hour. As I looking around in the basement, there was a section of ceiling joist that had what looked like water damage. It coincided with the area above the kitchen sink. Part of this joist was painted over, potentially masking further water damage. The seller joined me shortly after that. I asked them if they could elaborate on the conditions surrounding the area on the joist. The seller hurried off and brought back a can of paint. He mentioned something along the lines of “there’s nothing to see here”, as he proceeded to get out a paint brush and ladder. Not wanting to agitate him further, I proceeded with the inspection. Before I left the residence, I made a second pass through the basement. The area had been completely painted over. Luckily, I had taken pictures from several angles previously. The pictures and comments that it appeared that there was previous water damage were detailed in the inspection report.
In reference to the article “Easy Steps That Help Home Inspectors Avoid Lawsuits”:
I feel the main takeaway here is to cover yourself under all circumstances. Forming an LLC in a critical part in insuring that your personal assets cannot be compromised if an issue arises. Educate oneself as much as possible but don’t become smug or cocky. One should be self-aware of the limitations that this education provides. Sticking to reporting the facts will keep oneself from making assumptions or jumping to conclusions.
lets say i have a seller that wanted to sell quick and needed a easy report on a HVAC system that was in need of some repairs,i would inform that seller that i only preform all my home inspections one way,and that’s by the standard of practice,i would inform the seller if you cut corners the always come back and bite you,doing it the right way will get the right results.
while preforming a home inspection i by accident broke the knob off a heating thermostat,instead of apologizing to the client,i point out to them that this is a defect that i found,and it will be on my home inspection report,i do understand that while i am not responsible for repairs to the home i am responsible for preforming a great home inspection,and that includes not purposely damaging things.
An inspector receives a call from a Realtor asking him/her to donate to a charity. The realtor informs the inspector that the realtor with the highest donation totals wins a trip to Las Vegas. The realtor assures the inspector of future referrals. The Inspector regretfully declines. The inspector makes an anonymous donation to the above charity.
A realtor asking for a fee or benefit to recommend an inspector may be enticing to grow clientele but doing so is against the code of ethics of the inspector. One should behave in a professional manner and get clients from professional inspections rather than buying clients.
Inspectors should always use an inspection agreement that details the the inspections objectives, and prices. In the event that the Client is unavailable to sign the agreement, there are a few options. The Realtor may sign with the consent of the client. Consent can be verified by calling or emailing the client. The realtor can also show a signed document giving them authority to sign. This is referred to a apparent authority. The realtor may also refer to their contract with the client to find them a house for purchase. This is referred to implied authority.
By reading the above article “expert”, I’ve learned that calling yourself an expert in probably any field of work may raise some very scary circumstances that may ruin you financially. I now know not to use expert but maybe experience instead. Even contracts may not help in such situation.
Inspectors as Expert Witnesses
by Nick Gromicko and Kenton Shepard
In reading this article it was important to distinguish the difference between and “expert” and an “expert witness” as it applies to a home inspector. We cannot be experts of anything. There are so many different ways to look at the different systems within any house or home. We cannot know what exactly could be wrong in any given situation, nor could we know what may go wrong when we leave the site. Everything is an “as we see it now” type of thing. Being an expert witness does not mean you have mastered a certain field, it just means that you are willing to put your name next to your belief in the condition of something. Willing to put your stamp next to it. It is as important in this case to have a working knowledge of the subject matter as it is to be believed to be above reproach. To be believed to be credible and believable. You would not trust an “expert witness” that has a history of omitting or obfuscating. Blurring the lines, or favoring a side. You must be as trustworthy as you are knowledgable.
An inspector should always be impartial and report the condition of the home exactly as they see it during the time of the inspection. It is not only unethical to leave out potential areas that need correction, but could potentially be dangerous. A misrepresentation of the condition of a certain inspected area could lead to someone getting injured if an area that should have or could have been corrected is ignored. Home inspectors owe it to the industry to correctly describe areas that are in need of attention.
If a home owner offered me a financial reward to omit reporting on a problem that may cause a buyer to back out of the sale of the property. I would explain to the owner that I adhere completely to interNachi code of ethics and will not falsify my report for any amount of compensation. And I would advise the owner to make the necessary repairs.
In order for me to avoid a law suit that could negatively impact my home inspection business I would first of all join Internachi. Because it is the largest organization of it’s kind I can get information that is very beneficial and that would help me avoid problems that I may not have knowledge of in my own experience. I would become a Certified Property Inspector through Internachi by taking all of it’s courses. I would incorporate my company to reduce any liability that I may be exposed to. I would turn away any customers that make me uncomfortable. Never refer to myself as an expert in any marketing material.
upon arriving to 1600 Pennsylvania Ave. I was greeted by the seller and their agent. the seller took me to the side and asked me not to be so thorough in my inspections and he would “take care of me”.
At this point I had a decision to make I can go through the home inspection and simply glide through the inspection overlooking details that could be harmful to health and safety, Or I can do the responsible and ethical thing and kindly decline the sellers offer and do a thorough inspection of the home.
When faced with decisions that are as ethically triggered as this one, being as thorough as possible during home inspections is always ahead of making profit. One botched inspection, one dissatisfied customer can lead to not only possible legal actions, but loss of business as well.
Not following InterNACHI’s code of ethics can lead to termination from the InterNACHI team