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Published by OREP, E&O Insurance Experts | November 2012

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Setting reasonable expectations about a home inspection report is more than half the battle in avoiding liablity problems.

~If you haven't already, take a look at Working RE's new Home Inspector Edition.

Editor’s Note: The following is intended for your clients because, as most seasoned inspectors will tell you, setting reasonable expectations about a home inspection report is more than half the battle in avoiding liability problems.

Best Way to Handle Complaints?
Anticipate Them

By Alan Carson, Carson Dunlop & Associates Ltd.

One of the best ways to handle complaints is to anticipate them. We include a document called
When Things Go Wrong in our reports. We remind clients of this document when complaints come in. It is nice to be able to say, ‘We told you this would happen.’ Feel free to use all or part of this document.

(Dear Client):
There may come a time that you discover something wrong with the house, and you may be upset or disappointed with your home inspection. There are some things we’d like you to keep in mind.

Intermittent or Concealed Problems

Some problems can only be discovered by living in a house. They cannot be discovered during the few hours of a home inspection. For example, some shower stalls leak when people are in the shower, but do not leak when you simply turn on the tap. Some roofs and basements only leak when specific conditions exist. Some problems will only be discovered when carpets are lifted, furniture is moved or finishes are removed.

No Clues
These problems may have existed at the time of the inspection but there were no clues as to their existence. Our inspections are based on the past performance of the house. If there are no clues of a past problem, it is unfair to assume we should foresee a future problem.

We Always Miss Some Minor Things
Some say we are inconsistent because our reports identify some minor problems but not others. The minor problems that are identified were discovered while looking for more significant problems. We note them simply as a courtesy. The intent of the inspection is not to find the $200 problems; it is to find the $2,000 problems. These are the things that affect people’s decisions to purchase.

Contractors’ Advice

A common source of dissatisfaction with home inspectors comes from comments made by contractors. Contractors’ opinions often differ from ours. Don’t be surprised when three roofers all say the roof needs replacement when we said that the roof would last a few more years with some minor repairs.

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Last Man in Theory
While our advice represents the most prudent thing to do, many contractors are reluctant to undertake these repairs. This is because of the Last Man in Theory. The contractor fears that if he is the last person to work on the roof, he will get blamed if the roof leaks, regardless of whether or not the roof leak is his fault. Consequently, he won’t want to do a minor repair with high liability when he could re-roof the entire house for more money and reduce the likelihood of a callback. This is understandable.

Most Recent Advice Is Best
There is more to the Last Man in Theory. It suggests that it is human nature for homeowners to believe the last bit of “expert” advice they receive, even if it is contrary to previous advice. As home inspectors, we unfortunately find ourselves in the position of “first man In” and consequently it is our advice that is often disbelieved.

Why Didn’t We See It

Contractors may say, “I can’t believe you had this house inspected, and they didn’t find this problem.” There are several reasons for these apparent oversights:

Conditions During Inspection
1. It is difficult for homeowners to remember the circumstances in the house at the time of the inspection. Homeowners seldom remember that it was snowing, there was storage everywhere or that the furnace could not be turned on because the air conditioning was operating, et cetera. It’s impossible for contractors to know what the circumstances were when the inspection was performed.

The Wisdom of Hindsight
2. When the problem manifests itself, it is very easy to have 20/20 hindsight. Anybody can say that the basement is wet when there are two inches of water on the floor. Predicting the problem is a different story.

A Long Look
3. If we spent half an hour under the kitchen sink or 45 minutes disassembling the furnace, we’d find more problems too. Unfortunately, the inspection would take several days and would cost considerably more.

We’re Generalists
4. We are generalists, we are not specialists. The heating contractor may indeed have more heating expertise than we do. This is because we are expected to have heating expertise and plumbing expertise, structural expertise, electrical expertise, et cetera.

Invasive Look

5. Problems often become apparent when carpets or plaster are removed, when fixtures or cabinets are pulled out, and so on. A home inspection is a visual examination. We don’t perform any invasive or destructive tests.

Not Insurance
In conclusion, a home inspection is designed to better your odds. It is not designed to eliminate all risk. For that reason, a home inspection should not be considered an insurance policy. The premium that an insurance company would have to charge for a policy with no deductible, no limit and an indefinite policy period would be considerably more than the fee we charge. It would also not include the value added by the inspection.

We hope this is food for thought.

About the Author
Alan Carson is Past President of the American Society of Home Inspectors (ASHI) and principal in Carson Dunlop, one of Canada’s largest home inspection firms, founded in 1978. Carson Dunlop is distributors of the ASHI@HOME training program home study, Horizon report writing and business management system, the Home Reference Book and Technical Reference Guide, which identifies the age and size of HVAC equipment.

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