Originally Posted By: escanlan
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Nice to hear from you! You need to join in more often.
I would consider a pay as you inspect philosophy if the rates could be made reasonable. Unfortunately there are to many clients who do not understand the implications of the cheapest price they can find concept. It would be difficult to try to add a high premium to each inspection.
I have been thinking of the whole deal a lot lately and have an idea. First off Texas laws seem to be an influence on other states HI laws. Seems we are considered one of, if not the, toughest on licensing. If Texas can take the lead on this possibly other states would follow.
To begin with, every licensed RE professional would have their Texas Real Estate Recovery Fund amount increased from $100 to the area of $500 - $1000 each year. That's a lot of money that can go into a state controlled investment fund to pay out on claims. The pot just keeps growing as the investment fund grows.
Now onto the procedure for claims:
1. The first step is arbitration where each party pays equal shares of the costs up to settlement. If at any time either party withdraws they get to pick up the whole tab for the failed arbitration. If arbitration is found in favor of the complainant go to settlement method below. If not go to step 2.
2. Case goes to court. If the complainant loses Texas law already says they get to pay all costs. If the complainant wins then go to settlement method below. As an additional incentive to prevent frivolous lawsuits if the complainant loses they pay an additional 10% of the demanded loss amount to a general fund. It can be used for any number of good causes whether it be Children's Advocacy groups, training programs for disadvantaged youths, etc.
This is the beauty of it. If the fund does pay it runs repayment by the RE Professional the same as now with a slight twist. The RE Professional pays back the first $30,000 before they can practice again. The remaining payment is in the form of required extensive additional training in the area(s) they were found negligent in.
As I see it this will provide three major benefits. If a person wants to file a frivolous complaint or lawsuit they certainly have a lot more to lose than just their time and some legal fees. Most people are smart enough to realize that they made the mistake and should have listened to the Inspector. Generally they will just not file the complaint and if they do then they get another lesson from "The School Of Hard Knocks"!!
The second major benefit is the Inspectors would not necessarily have a need for E&O if they knew that frivolous lawsuits were being dealt with harshly. If they are performing their job properly there is no need for expensive E&O premiums.
The third benefit is the additional cost to someone wanting to enter the field and the expectation that if they do screw up due to inability it would be their last. How many people can afford to pay back the $30,000 now?? Those entering the field would have to be serious enough to keep up on their training, knowledge and abilities to succeed.
Yes, sometimes there are extenuating circumstances and possibly the Inspector should not be dealt with as harshly. These can be taken into account and lesser repayment options can be considered appropriate.
Manny (Emmanuel) Scanlan
Knowledge is power, but sharing knowledge brings peace!