Thread: Alert Texas Inspectors

To continue, it also seems like an excellent reason to get dragged into a suit filed against the Realtor. No wonder TAR wanted to support the amendment. Smart move!

Thom,

It was a GREAT move on their (TAR) part. This pretty much insulates the realtors... so, all they have to do is point the finger.

RR

Originally Posted by Richard Rushing

Thom,

It was a GREAT move on their (TAR) part. This pretty much insulates the realtors... so, all they have to do is point the finger.

RR

I think that is the short term benefit for the realtors.
But the long run is much worse:
As more and more inspectors can no longer afford to stay in business, realtor will no longer have the liabilty sheild of the inspector, And if big inspection firms move in to fill the void, these companies will have the funds and the means to deflect any and all litigation away from the company and push it back onto the agent.

Realtor are going to be hurt by this amendment as well- not as quickly as the inspectors, but they will.

People have become use to home inspection, and there is a demand.
What the state has effectively done is put measures in the works to cripple it's own Real Estate market. Will they increase the 10-day period for consumers to get the property inspected? Probably not, and let's face it, if 1/4 or 1/2 of the inspector quit or are forced out of business, many people will be forced to forego the inspection all together- placing everything back on the shoulders of the real estate agent and the seller; do you not think trial lawyers will not jump at the chance to grill a agent as to why they didn't do more to aid and secure the services of a home inspector for their client... that is professional negligence.

So, it is not merely the inspectors who should be sore at the greed of politicians, but the entire real estate profession.

George,

This profession, the inspection community and E&O insurance didn't just happen recently. All the above have been part of this business for quite a while... with that said, I assure you there will be enough inspectors out there in Texas to fill the void of the part-timers or new folks leaving because of E&O.

The agents who get themselves in trouble will do that no matter what the circumstances are related to our profession. As far as 1/4 of the inspectors going out of business... well, I don't see that either. Sure there are going to be some of the semi-retired folks who do this part-time who just won't be able to justify the cost increase if they only do 50 inspections per year.

By the way, agents are not taught to recommend an inspector (at least in most of Texas). They are taught to give their client a list of inspectors to choose from. Do you really think that list will shrink to 1 or 2? Naaaaaa. Aint'a goinna happen.

Most of the established inspectors do not get our business from realtors. Hell, 90% of all my inspections are referrals. Our previous customers are our advertising.

Who do you think this will hurt the established inspector or the new guy who is relying on advertising? My guess is the new guy who gets all the "shopper" calls (because his/her client-base is via advertising) will be hurt the most. Whereas the established folks who rely on referrals already have had the prospective client sold on our services, regardless of the higher price.

Cost of doing business goes up, inspection fees go up.... I could care less how it effects the realtors. I just don't believe it will cause one bit of concern for even the worst agent out there. With the referring party clause as part of the E&O requirements, it protects the most unscrupulious people in the real estate business as well as the really good ones. What group do you think the referring party clause will help?

I think the reality is that if an inspector cannot figure out what he/she needs to be charging for inspections and goes out of business because of it, then they need to purchase Brian's Cost of Doing Business program. Otherwise why would, long term, people be going out of business because of E&O?

Screw-'em... I bitch about it today, but will purchase tomorrow if needed. BFD.

Rich

Originally Posted by Richard Rushing

With the referring party clause as part of the E&O requirements,....

I have obviously missed something...where is that requirement spelled out?

Originally Posted by Richard Rushing

Most of the established inspectors do not get our business from realtors. Hell, 90% of all my inspections are referrals. Our previous customers are our advertising.

Who do you think this will hurt the established inspector or the new guy who is relying on advertising? My guess is the new guy who gets all the "shopper" calls (because his/her client-base is via advertising) will be hurt the most. Whereas the established folks who rely on referrals already have had the prospective client sold on our services, regardless of the higher price.

Rich

Rich, you made some good points,
And perhaps our difference in opinion is based upon the factor that I am one of the new guys, dependent upon advertising, getting the shopper calls.
Who at one point, earlier this week saw a future and a chance to grow a business, but now am looking at the money I invested in starting the business vanish with out a thing to show for it.

Your right.
No one is terribly concerned about what happens to inspectors, not even fellow inspectors.
I guess this amendment was a good way for some old timers to thin out the herd.

George, I urge you to relax. We don't even know for sure what is required yet. Kind of like inspections - get all of the facts before you commit hari-kari. Concentrate on being as good an inspector as you can be and it will all work out.

Think of all the HI wannabe's sitting in the HI schools right now that don't have a clue about this insurance requirement.

I bet the schools are being hush hush on the matter.

You know they are not saying,

OH, by the way you'll need an extra 3500. - 4K for insurance now to get your license.

Classrooms are not going to be filling up as usual i bet.

GEORGE WROTE:
"Your right.
No one is terribly concerned about what happens to inspectors, not even fellow inspectors.
I guess this amendment was a good way for some old timers to thin out the herd."

Georgio-- I think you really are waaay off on the first part of your statement above. In reality, there are alot of folks on this board and others like it, feel the need to give back and advance the profession, which is just the opposite of what you described above.

RE: "the old timers thinning out the herd"... as far as I know, not one of the "old-timer-inspectors" were the ones doing the pushing of this bill. This was the State of Texas Legislature doing this dasterdly deed.

What ole Rick Hurst posted is true. The diploma mills will continue to crank out the 'herd' to the point the graduates will have so much invested that there is no way they can turn back. Once the new folks find out about the E&O requirements (as we all hope to soon), they will already have spent around 3k without any return in sight. As we all know, the first year is a real beeitch to get thru. The second is a little better and finally starts to get some referral base by the third year. This is much too difficult business to break-into without having the E&O requirment up front.

Hey George, what part of the state are you in? If you are in the DFW area, I might be able to help with some future jobs. Let me know...

Rich

"Screw-'em... I bitch about it today, but will purchase tomorrow if needed. BFD."

If that is your entire attitude, then they win. Politicians count on that mentality from voters. Always have, always will. Voters have very short memories. However, if what you mean is, "I'll buy it because I have to in order to keep my business, but I intend on making persons like McCall accountable for their actions", then there is hope that we can make this whole system better. If the publicity from this affects his ability to take the Speaker's position, he and others will have learned a lesson. He introduced this amendment knowing that he has two years for us to forget about it. He is banking on it not being an issue at that time. I intend to prove him wrong. I'm really hoping I won't have to do this myself, but I will if I have to.

"George, I urge you to relax. We don't even know for sure what is required yet. Kind of like inspections - get all of the facts before you commit hari-kari. Concentrate on being as good an inspector as you can be and it will all work out."

George, I urge you not to relax. I urge you to stay angry, BUT stay focused. Don't quit, don't give up. Too many times, people want to talk about being good citizens, but they don't want to participate in the hard work that it takes to actually be a responsible citizen. The point is that someone did this to you for personal gain, not for the public good.

Short term anger can be productive. It is a catalyst. It will not linger forever, but at this stage it should be expected.

Mike, the referring party isn't part of the amendment, it is what was added to E&O policies quite a while ago. It was intended to encourage RE's to use inspectors that carried E&O versus those who didn't. Simply, it added more pockets.

I'm not sure that many people really understand how E&O works (aside from painting targets). E&O starts as a pot. Let's use $100K as an example. First, your legal expenses come out of that pot. That's lawyers, deposition costs, EW's, etc. What is left is what is available to the plaintiff if they prevail. If the amount of the judgment exceeds the remainder in the pot, that's your responsibility. So, initially, it sounds like a great idea to buy the most you can afford. But, it's a double edged sword. The more you carry, the more likely you are to be pursued for a longer period of time. Lawyers don't take cases where they can't make money.

And you must understand that you have no say whether it goes to trial or not. The Ins. Co. makes all the calls. Your ability to renew is based on Claims, not awards. Let's assume the unlikely scenario that it is a frivolous claim. I know that never happens, but let's assume it. The suit is for $100K. Your defense to date costs equal $15K. The Ins Co. decides that a trial will cost another $40K, if they prevail. Total outlay if they "win" is $55K, minus your deductible. If they lose, it's a minimum of $100K. So they offer the "Frivolee" $25K to settle. Total cost to them is $80K. They "save" $20K. BUT, you have an $80K claim (not judgment) against you, even though you didn't do anything wrong and you didn't make any of the decisions. So what happens when you try to renew or change companies?

I have wondered; since TX is a right to work State, what will happen to Inspectors that have no TREC violations, but for whatever reason, can't find a Company to Insure them?

My understanding of the intricate political process is very limited.
Is it constitutional to pass a law without adequate public hearing?
If so, perhaps a judge could declare the bill unconstitutional and issue some sort of cease and desist until it returns to the full body for hearing - Is this a possibility?
Is there someone on here that has that knowledge?

Originally Posted by Thom Walker

"Screw-'em... I bitch about it today, but will purchase tomorrow if needed. BFD."

If that is your entire attitude, then they win.

NO... my attitude is that it is a foregone conculsion that the passage will go through with the governers signature. Does he have line item veto? I seriously doubt it...

Do I like this crap!? Hell-0 NO!! Do I believe it's going to happen... Hell-0 yes. Me saying I will purchase tomorrow if needed, was something everyone (yes to include you Thom) will be doing to stay in business when the requirement comes down the pipe. Not a defeatist attitude-- it's more like being a realist. I just choose not to get an usler.

I don't take this as a personal slap in my face or a kick in the crotch. I look at it kinda like the licensing thingy... all around the country we hear folks kicking and screaming about licensing and how they will die by the end of their sword (funny chaps in Fla) if it comes to that too. IT WILL COME... the whole country will eventually be licensed. Then will come the E&O requirement... eventually.

People, it's not being a defeatist if you decide to spend your energy to change those things that can be changed. I just think that this bill has been railroaded thru the state legislature by sneaking an E&O clause in at the last minute without any input from the people who are, for a lack of better term, informed as to the history and actual make-of how the system has been working to date. What's worse is, it was pushed by an individual who is obviously not working for the people of Texas' best interest in mind. But instead, was working on behalf of his political contributors to further his career.

I just choose not to hyper-ventilate about something that *IS* a probability and not yet reality. Once it becomes reality, and it will... what are you going to do? Bitch and moan day and night... not worth it.

Like it or not foks, this crap is probably going to happen and there is nothing that GOD, GOVERNER or GRANDMA can do about it. Well, maybe grandma might have a chance...

Just don't go getting on top of any towers in Austin, ala Chuck Whitman (not Hinkley).


Rich

Rich, that is a good take and a healthy attitude to the issue. The information that I have says that TREC does not have a problem with it and likes the idea. So if the regulating agency like is, I doubt that the Gov will not sign it.

I don't know how many times I have said this, but I have not seen an increase in lawsuits with mandated E&O. I have worked under state mandated E&O for six going on seven years.

I would say that 80% of the time home inspectors are sued when they screw-up, the remaining 20% I call the shotgun effect. You just get pulled into the lawsuit because you were involved in the transaction.

Originally Posted by Richard Rushing

Just don't go getting on top of any towers in Austin, ala John Hinkley.

Actually, that was Charles Whitman, but I get your drift.

Couldn't Hinkley have thought of jumping off???

RR

"The information that I have says that TREC does not have a problem with it and likes the idea"

Scott, Per previous posts, as of a couple days ago, TREC didn't even know WTF it was. Would you mind sharing your source?

I don't personally care whether we have it or not. My choice would be not. Like others, I'll pay up front and others will pay me back - ie; price increase. - just like other expenses.

Originally Posted by Scott Patterson

...The information that I have says that TREC does not have a problem with it and likes the idea. ..."

TREC has no official opinion one way or the other as far as I can tell. They will however incorporate the will of the legislation into policy when the time comes because that’s their job. Now you might find some individual TREC employees or even Commissioners who might personally think it’s a good idea.

Incidentally, TREC never before expressed an opinion that its regulated home inspectors should have a mandatory E&O policy requirement in place. If the Real Estate Commissioners felt it was important, they would have pressed for this long ago.

There has been one member of the Inspector Committee who has brought E&O up a number of times in the past. He has been strongly in favor of an E&O requirement for inspectors but he was never able to convince the rest of the IC that it was a critical issue for the public or for inspectors. Thus the Inspector Committee never advised the TREC Commissioners that a mandatory E&O requirement should be adopted for inspectors. I suspect that that one member of the Inspector Committee will be the only one doing any kind of "victory dance" down the hallways of the TREC building when this is all over.

If a mandatory E&O policy for home inspectors was ever going to come about, it was going to have to come about just as it apparently has; as an unnecessary 11th hour amendment to an otherwise justifiable piece of legislation that was destined to be signed by the Governor anyway. This one amendment wart on the entire body of SB914 is not enough to keep it from becoming the law of the land at this point.

Originally Posted by Richard Stanley

"The information that I have says that TREC does not have a problem with it and likes the idea"

Scott, Per previous posts, as of a couple days ago, TREC didn't even know WTF it was. Would you mind sharing your source?

I don't personally care whether we have it or not. My choice would be not. Like others, I'll pay up front and others will pay me back - ie; price increase. - just like other expenses.

I had the pleasure of spending a couple of days and talking with three members of TREC while attending the Arello Welcome to the ARELLO Web Site meeting in Banff last month. They were anticipating the changes; legal council was in favor if it happens. I did not say that TREC was forcing the change.

Like I said before, you need to look at the Trial Lawyers. They have been the force behind this in other states.

Originally Posted by Scott Patterson

They were anticipating the changes; legal council was in favor if it happens.

I will apologize upfront as this post will seem confrontational and that is not the intent. However...you say they were anticipating the changes. What changes? The hundreds of acceptable changes that SB914 proposed or the last minute amendment that added the E&O requirement? For sure they were anticipating the original changes brought about by SB914, we all were. I highly doubt they were anticipating the E&O amendment however. If they were then that suggests collusion to me and I would like to hear more. If it were proven that TREC staff or the one lone Inspector Committee member that Phil mentioned above did an end-around and secretly found a State Rep to support them then I think we need to know that. If TREC rep's said they anticipated the E&O amendment then something is very, very rotten here.

Originally Posted by Warren Alderman

If you can't grow your business revenue by $4K to compensate then you should go out of business...it means you be stupid.

There's no arguing with trailer park logic.

It has nothing to do with the cost of insurance! It has everything to do with dishonesty in government and whether or not one chooses to just go along and except whatever is dished out.

Will I buy it? Yep, no choice. Will I continue to thrive. Yep, no doubt. Am I more susceptible to frivolous lawsuits? Yes, at least according to every lawyer aquaintance I've spoken to. It's why the first question on any interrogatory is "Are you insured?"

Look guys, I imagine that just about everybody has a line they draw in the imaginary sand at which point they say "I've had enough." This was mine. I don't like being bullied. I am fully aware that this is a done deal and that it's never going to be reversed. That doesn't change the fact that it was dishonest and was based on no need and no public demand.

There's no waste of energy, no bitterness, whatever. I am angry. I am determined that the people who promoted this will not be able to comfortably hide in the shadows. Well, they might be able to, but it won't be for lack of effort on my part.

I don't have priveledged information, so I don't know what % of the time inspectors elsewhere have screwed up. But I know all the published stats regarding complaints against Texas inspectors. I know that of those times, 49% weren't filed by Clients and that of all those filed, only 21% were found to be legitimate complaints.

I also know that when malpractice awards were capped, lawsuits diminished dramatically. And I know that when ins cos withdrew mold coverage, lawsuits disappeared. I'll continue to read the posts with interest, but I won't contribute anymore. I'm beating a dead horse. You are all (well most of you) mature business men and you'll make your own decisions about what to do or not to do.

Sorry, I can't help Y'all with this anymore. I'm not going to help in a witch hunt over some conversations that I had while talking about the future of our profession with some friends.

Good luck, and trust me E&O is not all that bad.

Scott, no problem. At least now we know of one person that had this conversation a month before the bill was amended. That's really all I need to know at this time. And again, it's not the E&O requirement so much as it is the method is was enacted. Like I've said I have E&O and this will have little to no financial effect on me. However ,when certain groups preach and enforce parliamentary rules during the normal course of business then turn around and violate that I find that to be a breach of ethics. A case in point, but not related to this, is the fact that the Texas House of Representative's chief parliamentarian resigned last night around 10:00 pm due to differences of opinions with the Speaker of the House. If the amendment is challenged in the courts for a rules of order violation then I'm sure you could be deposed if needed.

Originally Posted by Mike Boyett

If it were proven that TREC staff or the one lone Inspector Committee member that Phil mentioned above did an end-around and secretly found a State Rep to support them then I think we need to know that...

I certainly did not mean to suggest that the Inspector Committee member I mentioned had anything to do with this! In fact, I doubt very seriously that he did.

As for ARELLO, I believe that the subject of E&O insurance for inspectors was on their discussion agenda for a past meeting where TREC staff members were in attendance. Again, that does not mean TREC staff had anything to do with this either.

Originally Posted by Phillip Stojanik

I certainly did not mean to suggest that the Inspector Committee member I mentioned had anything to do with this! In fact, I doubt very seriously that he did.

As for ARELLO, I believe that the subject of E&O insurance for inspectors was on their discussion agenda for a past meeting where TREC staff members were in attendance. Again, that does not mean TREC staff had anything to do with this either.

BINGO!

OK, that clears up the Arello question ( I think). Had Scott simply indicated it was an agenda item during the conference then that would had made perfect sense. His original comment inferred a different scenario. The chances of any legal challenge to the amendment are practically nil so all this bitching and moaning is just that. I do not plan to pursue this matter any further.
Phil, I know you were not suggesting the Inspector Committee member had anything to do with the amendment...I thought that up on my own.

Quote from Mike B: "The chances of any legal challenge to the amendment are practically nil so all this bitching and moaning is just that."
____________

I believe that statement hits the nail on the head...

Rich

Richard- Sorry about the outburst
Frustration got the best of me
--
Refocused
Ready to get constructive


New Board for Texas Inspectors
Texas Inspectors Coalition

Set up to help Texas Inspectors discuss and share information about the SOP and Inspecting in Texas.
When you got the entire state government against you, you gotta band together.

Members only section is off limits to vendors and general public
So Inspectors can talk openly