P.S. The law only prevents inspectors from unilaterally limiting their liability to an amount under $10,000.
The law doesn’t prevent YOUR CLIENTS from limiting YOUR liability to an amount under $10,000.
Just double your prices but offer an option to do the inspection at 1/2 price if the client agrees not to hold you responsible for more than twice the cost of the inspection or even $1. The law doesn’t hinder a consumer’s right to bargain with you (over price or services or liability), it only limits your ability to impose (on the consumer) a written-in limitation of liability unilaterally.
A consumer cannot waive a law…a law that states what the minimum liability, per transaction, will be.
A side deal…an agreement made between the parties to limit liability to less than what the state mandates…would not necessarily be honored, especially if the plaintiff (client) changes their mind.
Odds on favorite for the Wichita area will be Mr. Barnes himself, unless he designates his dog Molly again. One other favorite in the front running is a certain ex-member who keeps quitting ASHI (supposedly) because he’s tired of the politics and operates a HI. school near the Federal Penitentuary. On the realtor side, Reece & Nichols the money bucks in the KC area will be one, and it wouldn’t be a surprise if it was somebody from their legal dept. Looks pretty one sided with a certain bias no doubt.
Nick. Sorry. I am just getting back home. I had a busy day. Several media wanted an interview, but with several inspections today, no time. See Sec. 11 paragraph c. $10,000 agregate per inspection performed. Next paragraph d states the 12 month period, where after 12 months, no legal action can be taken. But, during that 12 months, you are suseptable to law suits, for any reason. California has 4 years. How do they deal with that?
And almost every inspector outside of KS can be sued 1,000 years later!!! I don’t see the problem here. It cost me a small fortune to get the 1 year limitation written into the PA law and after I succeeded… I threw a party.
You, Joe Ferry, and I discussed negotiating a limit on liability in exchange for a lower price. This is good in theory, only with the already low prices HIs charge, it aint a good business strategy at all.
I have modified this post from its original version, after taking the time to actually READ the law, and there are some clear misconceptions regarding it; the first being the ability of a real estate agent to perform a home inspection. In actually, they cannot. Home inspections are not something done within their normal course of business. So, the law will not allow it. Similar language exists within virtually all licensing bills, so I see no difference here.
If someone disagrees with me, please show me where, in any portion of a real estate transaction, a realtor has EVER either performed an inspection, is called upon to perform an inspection, or where NAR encourages a realtor to perform an inspection. In fact, since the inspector is the sole party that carries any REAL liability, I’d use this as a reason to NEVER allow a realtor to perform an inspection.
As to E&O policy limits, I agree with Nick that a $10,000 cap is a good thing. Multiplying $10,000 across 300 inspections is unrealistic, when in fact absent of a cap, multiply 300 by $100,000 is just as arbitrary.
Here’s reality: How much is a home worth? Let’s pick $100,000. So with NO limit, let’s pick $100,000 as the maximum we could lose. Multiply that by 300 inspections per year. Would this translate to the need to carry $30mil of coverage? Of course not! This would mean that we get sued for EVERY inspection we perform, and lose the maximum value of the home EVERY time. The law also provides a statute of limitations of claims for 12 months. This means that 12 months and 1-day later, you are beyond the reach of a lawsuit.
The true danger in this bill and all others is the make up of the licensing board and the power they may heve to make operating changes to the bill.
Same danger with any of these laws…
The sad thing is that this law, like all other HI licensing acts, does not protect the client. Nor did it ever verify the NEED for such a law in the first place.
Thank you Joe. Thats the plain and simple truth. I imagine that the bigger real estate companies could even go so far as to designate a few friendly inspectors, making them actual REA’s and falling back on their past basic knowledge, put them on the payroll and let them start doing easy walk thru’s under the guise of being an RE agent.
Engineer’s and architects, get a free pass, EVEN though current standards exempt them when it comes to single unit housing. Total,total, total free pass.
The upcoming board appears to be pre-set.
The current govenor appears to be in the front running for Obama’s VP and the money will be flowing to the campaign coffers via the RE industry for certain unnamed concessions and appointments, you can bet your last dollar on that one.
I personally think that the constitutionality of the bill should be legally challenged. This is also setting up some unfair trade practices which the rural guys get an additional 2 yr free ride to come up to speed. Has any other state set up a program in which sets priorities by population. You want to do us all a favor here in Kansas? Have nachi legal at least look at the damm thing.
First board meeting is in Sept. Gee I wonder who’s been selected to the board.
No matter. Realize one thing. In Kansas, unless the rules have changed recently one can become a real estate agent with only 20 hrs of classroom time. There was some talk about increasing the class time to 40 hrs to make it a little tougher. From what other agents have told me in the past, most classroom time is directed at, guess what? Passing the test :roll:
The waters may look calm on the surface, but there’s a deadly or costly undertow waiting to suck someone under
This is standard verbiage and does NOT allow a municipal inspector to practice as a home inspector.
This is also standard verbiage and would allow an inspection if part of a larger project undertaken by the architect. ZThe architect would need to be licensed as a HI is they advertised HI services and operated a HI business.
Pretty much the same as an architect. Up until recently, here in NY, engineers required HI licenses.
This may qualify. Time will tell.
The realtor would need to prove that the practice falls within the scope of what they typically do and what is provided for in their licensing law. Brokers already carry a bunch of vicarious liability. Adding inspection-related duties will be a bad thing, as the broker ultimately makes money on all completed transactions. This means that they have a financial interest in everything passing through their doors. As such, it will be pretty easy to prove fraud, IMO, over a bad inspection performed by an agent or employee of that Broker. I suspect that there will actually be NO LIMIT to the liability to the BROKER and the Broker’s business. I just dont see it as something the broker would want to do. For what? They arent saving anything, as the client pays for the inspection. They save nothing and absorb some real headaches.
I say headache because if they are exempt from licensing requirements, they are also exempt from any protection as to the $10,000 limit on liability the law provides for the licensed inspector. The law cuts both ways!
[FONT=NewCaledonia][size=2]To further illustrate the complexities of havng a Re agent perform the inspection, remember that everyone waorks for the SELLING Broker, especially as ALL commissions come to and are distributed by the SELLING Broker. So…
In essence, the client needs to acklowledge in writing that his/her inspector has a personal interest. This wont fly…
the inspector gets compensated by the Broker for perfoeming an inspection on a property where the broker or agent has a financial interest.
Ultimately, all commissions/profits are contingent on a positive inspection. Big problems here, IMO.
This is standard verbiage and does NOT allow a municipal inspector to practice as a home inspector.
This is also standard verbiage and would allow an inspection if part of a larger project undertaken by the architect. ZThe architect would need to be licensed as a HI is they advertised HI services and operated a HI business.
Pretty much the same as an architect. Up until recently, here in NY, engineers required HI licenses.
But, to further illustrate how they may NOT advertise HI services, this is part of the law:
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This may qualify. Time will tell.
The realtor would need to prove that the practice falls within the scope of what they typically do and what is provided for in their licensing law. Brokers already carry a bunch of vicarious liability. Adding inspection-related duties will be a bad thing, as the broker ultimately makes money on all completed transactions. This means that they have a financial interest in everything passing through their doors. As such, it will be pretty easy to prove fraud, IMO, over a bad inspection performed by an agent or employee of that Broker. I suspect that there will actually be NO LIMIT to the liability to the BROKER and the Broker’s business. I just dont see it as something the broker would want to do. For what? They arent saving anything, as the client pays for the inspection. They save nothing and absorb some real headaches.
I say headache because if they are exempt from licensing requirements, they are also exempt from any protection as to the $10,000 limit on liability the law provides for the licensed inspector. The law cuts both ways!
To further illustrate the complexities of havng a Re agent perform the inspection, remember that everyone waorks for the SELLING Broker, especially as ALL commissions come to and are distributed by the SELLING Broker. So…
In essence, the client needs to acklowledge in writing that his/her inspector has a personal interest. This wont fly…
the inspector gets compensated by the Broker for performing an inspection on a property where the broker or agent has a financial interest.
Ultimately, all commissions/profits are contingent on a positive inspection. Big problems here for the broker, IMO.
FINALLY… as to limits on liability for the inspector:
As I read it, the inspector may limit their liability within the law. Worse case is they are on the hook for up to $10,000. Additionally, all the law requires is a $10,000 E&O policy, or $10,000 bond, or $10,000 in secured credit.
They even took into account those inspectors in rural-land, where 100 inspections are hard to come by. That, in and of itself, is pretty friendly IMO.
It protects inspectors by permiting, by law, inspectors to limit their liability to $10,000.
It protects inspectors by preventing actions, against inspectors, after a year.
It puts the licensing board in a very uncomfortable position of trying to approve a known, 30-second online application, diploma mill http://www.homeinspector.org/join/application/default.aspx in which case I get to do a new NACHI.TV episode and point cameras in the face of any board member who harms consumers by approving such a no-requirement shazam organization… OR… not approving ASHI, and thus wiping ASHI out of Kansas altogether. Either way will be fine by, and fun for, me.
OK, I get all of your points. Thing is, I know several inspectors and home inspection companies owned by former realtors. Are they exempt? They can get their RE licenses in a hearbeat. My concern. They do not have to advertise as home inspectors. Just get work by referal. Bottom line, attorneys and insurance people are licking their chops on this one. More money for them. Nick, help us with some forms. Thanks.
It is difficult for Nick and others to understand how little we appreciate the 12-month limit to liability and the $10,000 cap since they are unaware of the (1) low number of law suits in this part of the country and (2) the court’s willingness to uphold our contracts limiting liability to the inspection fee.
The media has advertised what the real estate salesmen have asked…and that is that this law represents a $10,000 warranty on each home they sell, that is inspected.
They are toasting themselves with champaigne. They duped the legislature into providing them with a gold mine.
There is only one option left to the inspector, and that is to be the “deal killer”. We cannot leave anything to chance and must, in our reports, convey the darkest possibility behind each defect.
What looks to be a minor discoloration on the drywall could very well be evidence of past moisture that could be concealing a lethal amount of mold behind it. I cannot endanger my license by neglecting to convey that possibility to my client, no matter how remote it may be. The one I miss could end my business, so I will cover them all with the same fervor.
