So the inspection was done 5 years ago and the client apparently discovered some basement leakage in 2021. The lawsuit just arrived last week (so just barely inside of statute of limitations). Their claim is that I should have told them the weeping tile was installed incorrectly (you can’t make this stuff up!)
I wrote a letter to the client stating the weeping tile is buried and since I have no X-ray vision, could not comment on it. They promptly forwarded it to their lawyer and the lawyer said I should be communicating through a lawyer with them.
So I duly sent it off to my current insurer (not sure who I was using 5 yrs ago and even if they are still in business) and they said to send them the stuff but I might not be covered since it isn’t within the current policy year.
So has anyone been in this situation before? I have 0 doubt this will go away eventually since the claim is patently ridiculous, but getting passed around like a hot potato is very stress inducing.
What insurance company are people with these days? I was with Totten but they cranked the fees and so I switched to Zensurance–I’m not happy with how they are handling this so far…
I suspect the suite will involve various individuals. More than just you being pressed, unless you make a mistake and don’t retain legal counsel.
You will not stand alone in this and will likely be dropped from the suite as it moves forward during discovery.
In my opinion, their attorney is reaching saying you should be able to have seen the perimeter drainage field and weep tiles, or there was damage caused by degraded perimeter drainage and weep tiles or something in the report ties you to the defect/deficiency IE Lot slope, High basement humidity, Efflorescence and of course bulk water.
Hand it off to your insurer, or a lawyer.
Reach out to InterNACHI legal team or Joe Ferry.
Just my 2 cents.
Tell them you must review your file and will back to them. First because they are probably pissed at the time of the call. Second that you don’t really know what their complaint totally consists of.
So, Ask them to drop you can email on their concerns and contact information (to be sure your files are current).
Request a time to come back to the property to view their concerns. Look, listen and take pictures. Was it repaired already? Is it in your contract that this is a step for the client to file a complaint? Are they breaching your contract?
Leave, telling them you will review your files.
Pull out your report and cut out the section concerning the complaint.
Then dig out your SOP and blow the dust off it. Cut your inspection standards relative to the complaint.
At this point, you do not know if this is a formal complaint.
If you made a comment in the report about the issue, showing you addressed it, give it to them.
If the SOP says it is not a required element of the report, give it to them.
Then ask if there is anything more you can help them with.
If it is a formal complaint.
Send what you collected to your appropriate people.
Do you have a Home Inspection Board that handles complaints up there?
If so, direct the client to that board. Their legal division will review the complaint and determine if they consider it to be a requirement of your inspection in accordance with their law.
No one wants to hear your opinion or excuses. Give them the written facts, which will come out eventually anyway. Better you provide them. How can you be blamed for following the rules? They can still try, but…
This info is if you want to try to resolve this before lawyer. This is what the lawyer will do anyway.
I let my lawyer handle it once. After that I did it myself without the need of a lawyer because the client saw the light.
BYW; the first time the client was a lawyer. He brought the entire clan to the inspection (2yr old kids) and was totally distracted. Did not read the inspection agreement. Did not read the report. Didn’t listen to me say, "I couldn’t inspect the entire crawlspace because it was flooded!
I will add, I had a nuisance complaint from a lady about a roof that I had called out no less than 5 types of defects on. I had Joe Ferry draft a quick response and oh my was his letter a scorcher. He listed 4 separate and hard hitting reasons why she could go pound some sand. Joe Ferry really came through for me. I never heard from her again.
Since your insurance may not provide an attorney or any support for you, consider calling up Joe and hire him directly. It could be the best $600 you ever spend, and it covers you for a whole year of retainer. If another situation comes up, he writes another scorcher letter for you.
That was my experience anyway.
Hopefully your contract stipulates that the maximum damages from you will be the price of the home inspection. This may not be applicable in all states. The second contract inclusion should also be that all costs associated with a lawsuit be born by the plaintiff.
Both of those contract inclusions will generally deter a lawyer from taking your client’s case (the lawyer wants to get paid regardless of the outcome).
As far as the lawyer wanting all communication from another lawyer, that is laughable. Lawyers think far too much of themselves.
I’ll second Joe Ferry. It might be a tad late for that in this instance, but I once received a letter from an insurance company regarding a dishwasher leak that had caused damage to flooring. He responded promptly. Since I had never ran the dishwasher because it was unplugged. Never heard from them again.
To add onto all of the great advice so far, I would add that an ounce of prevention works wonders. Your reports should clearly state what you can and cannot see, that unseen latent issues could be present, but without destructive examination or further information from the seller, you can’t offer an opinion on such unseen issues. It’s also good to add statements regarding hidden issues on what the buyer should keep an eye out for going forward. That way if they ever call back years later, you can remind them that not only were these types of hidden issues discussed in the report, but you provided them with warning signs to look out for if they ever arose. This is one of the benefits a narrative report has over checklist type of reports. You can dive in and provide your clients with context.
Example: “Concrete masonry unit and brick masonry foundations (whether legacy cinder blocks, bricks, or modern concrete units) are present. This type of masonry is porous and vulnerable to water penetration due to general weathering and deterioration of the bitumen damp proofing layer commonly applied to the exterior foundation walls during construction. The potential for moisture penetration through a mortared masonry unit foundation is high when this bitumen layer has been breached or when cracks are present. Nearly all of the bitumen layer and exterior faces of the foundation were buried and not visible for inspection. We therefore cannot offer an opinion on their condition or on the presence of defects. Typical warning signs of breaches in the bitumen or cracks at the exterior include basement dampness, efflorescence, and reports from seller regarding past foundation leaks. Should foundation leakage occur in this basement in the future, we note that the most effective repair is to hand excavate along the exterior in the area of water penetration, power wash the foundation, seal the breach with mortar, and install a modern water proofing system over the repair.”
Had a similar experience with a couple of years ago, spray foam over insulation hiding a leak. Told him during the inspection that this was possible and put it in the report. I hired Joe and the problem went away. Mighty stressful at the time though.
Interestingly the agent is a friend of his, remembered me saying it during the inspection, and I’m still #1 on his list because he knows I’ll protect his clients. One of the few agents that almost defaults to, “Maybe we should find you another house.” if a big issue crops up. Like a lot of guys here, my inspection times are long and reports detailed.
You can certainly do that but I can only imagine how big a report would be listing all these various things. Of course you can place a statement at the beginning of the report, and in the contract, advising that latent issues may exist and will not be found. Of course I would recommend not using the word “latent” unless proceeded by “(hidden)” for the benefit of those that may not understand the term latent.
I also can imagine how large a report would be if you provided them “warning signs” and numerous lines of verbiage of what to watch out for unless of course there are signs that something may not be right and is coming down the pike possibly.
The only time I ever discuss possible hidden issues is when I can not fulfill my SOP requirements. For that I do list why I can’t and that the “condition”, “operational conditions”, etc., is unknown. For example we are required to inspect coils for AC units that are attached to air handler units. Since I don’t carry mastics and tapes to seal a case back up, and won’t break seals to begin with anyhow, I have a standard advice notice about that and the coil condition is unknown.
Yes context and content is important and therein is the value of narrative reports over Checkbox Chimp reports.
Since you are being sued, all conversations with the former client are over. Your insurance company will likely not cover the loss; however, the duty to defend is greater than the duty to indemnify. They are likely to initiate a defense as they investigate your coverage in context with the claim and, if they later determine you are not covered, will charge you for anything they paid for your defense and have you pick up the bill from there.
And most importantly … and above all else … delete your posts in this thread and say nothing more about your suit on social media and message boards.
Maryland law specifically states:
(a) A licensed home inspector shall give to each person for whom the licensee performs a home inspection for compensation or to the person’s representative, a written report that states:
(1) the scope and the exclusions of the inspection; §16-4A-01
A single page will do it:
.03 Limitations and Exclusions.
A home inspection performed in accordance with the standards of practice set forth in this chapter: Is not technically exhaustive; and May not identify concealed conditions or latent defects. Except as may be required by lawful authority, a home inspector is not required to perform any action or make any determination unless specifically stated in the standards of practice set forth in this chapter. A home inspector is not required to determine any of the following: Condition of a system or component that is not readily accessible; Remaining life of any system or component; Strength, adequacy, effectiveness, or efficiency of any system or component; Causes of any condition or deficiency; Methods, materials, or costs of corrections; Future conditions, including, but not limited to, failure of systems and components; Suitability of the property for any specialized use; Property boundary lines or encroachments; Compliance of the structure with applicable provisions of local ordinances, regulations, or codes; Market value of the property or its marketability; Advisability of the purchase of the property; Indoor air quality or sickness of any building, including, but not limited to, the presence or absence of all manner of biological activity, such as carcinogens, mold, insects, birds, pets, mammals, and other flora and fauna, and their consequent damage, toxicity, odors, waste products, and noxiousness; Effectiveness of any system installed or methods utilized to control or remove suspected hazardous substances; Operating costs of a system or component; Acoustical properties of any system or component; or Existence of manufacturer’s recalls. A home inspector is not required to offer or perform any of the following: Any act or service contrary to law; Engineering services; Work in any trade or any professional service other than home inspection; or Warranties or guarantees of any kind. A home inspector is not required to operate any system or component that: Is shut down or otherwise inoperable; or Does not respond to normal operating controls. A home inspector is not required to enter: Any area that may be, in the opinion of the home inspector, dangerous to the inspector or other persons or may damage the property or its systems or components; or Under-floor crawl spaces or attics that are not readily accessible. A home inspector is not required to inspect any of the following: Underground items, including, but not limited to, underground storage tanks or other underground indications of their presence, whether abandoned or active; Systems or components that are not installed; Decorative items; Systems or components located in areas that cannot be entered in accordance with the standards of practice set forth in this chapter; Detached structures other than garages and carports; Common elements or common areas in multiunit housing, such as condominium properties or cooperative housing; or A common condominium component or system or evaluated condominium reserve accounts. A home inspector is not required to: Perform any procedure or operation that may be, in the opinion of the inspector, dangerous to the inspector or other persons or damage the property or its systems or components; Move suspended ceiling tiles, personal property, furniture, equipment, plants, soil, snow, ice, or debris; Dismantle any system or component, except as explicitly required by the standards of practice set forth in this chapter; or Include in a written report any information from any source concerning previous: Property, geological, environmental, or hazardous waste conditions; Manufacturer recalls or conformance of proper manufacturer’s installation of any component or system; or Information contained in a consumer protection bulletin of publication. §09.36.07.03
Hello, Brian. Once the suit is filed, facts take a back seat to civil procedure and legal maneuvers. His insurance company will investigate the claim he filed and determine if he has coverage based upon the language of his insurance policy and the language in the petition filed with the court.
If they have already told him that coverage is unlikely, his policy would appear to be based on when the inspection was done rather than when the suit was filed … but while they are investigating coverage, they will initiate a defense until coverage (or lack thereof) is clear. They have to defend him until they make a coverage determination and, if he turns out not be covered, he gets the invoice from the lawyers.
He might win the suit because of a tight contract and good advertising, but winning a lawsuit can be as expensive as losing one when it is you and not your insurance company paying the legal bills.
I concur. The few potential lawsuits I had - despite having the limitations I my contract mentioned the specific limitation within the defect. Like we can’t see concealed stuff during a visual only inspection. Lawyers always mentioned that
So, it looks like this took place in Canada. I think most that are posting on this thread are from the USA and that would also include the suggestions of Joe Ferry and Joe Dennler that folks have tossed out. Just an observation.
Which is why it is so important for people to get their INFO in their signatures, and if not a member, at least tell us where you are located!
This is a U.S. based Organization that operates Internationally. Most members are U.S. based, so we naturally assume you are also, unless told differently. If you want relavent information, you need to provide accurate information!
As the saying goes… “Help us help you”!!