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  1. #1
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    Default Checking out E70

    When checking out E7O ins, doesn't anyone but me get upset with this referring coverage that is part of all I have found. It's bad enough that it gives incentive to assure that Re's ins cos will drag us in.

    But it seems to me that it legitimizes a relationship that our licensing authorities forbid. It is clear that we are supposed to act in the best interests of our Clients only. Yet we are being forced to buy policies that provide protection for someone who we are not supposed to have a relationship with.

    I showed some literature to an RE friend. She looked them over and said "Oh my God. They have just given every sleazy Agent a free pass to search out the worst Inspector they can find. That referring agent thing ought to be illegal. I wonder why we don't have to cover you? "

    Similar Threads:
    Elite MGA Home Inspector E&O Insurance
    The only reason some people get lost in thought is because it's unfamiliar territory.
    - Paul Fix

  2. #2
    Richard Rushing's Avatar
    Richard Rushing Guest

    Default Re: Checking out E70

    THOM: "They have just given every sleazy Agent a free pass to search out the worst Inspector they can find."

    I agree. It's bad to mandate this requirement on the inspector from the sand-point that the inspector recovery fund obviously was working (see surplus funds). But... now we are forced to carry something that is designed to do nothing more than to line the pockets of the ambulance chasers. To add to the full-body-cavity search imposed upon us by this requirement, we will also have to cover the most unscrupulious acts by some of the (realtor) agents, which statistics have shown, are more than 1000:1 more likely to do something unethical than an inspector will.

    This is just a bad requiremnt.... anyway you look at it.

    Rich


  3. #3
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    Default Re: Checking out E70

    Just thinking out loud here.

    We already have PE or SE doing inspections without a TREC license in this state and I provide specialized inspections that are not regulated by TREC.

    So what if I gave up my TREC license?
    Dropped all association with TREC, ASHI, TAREI, NACHI…
    Change the name to consultant or whatever?

    Who would or could bust my chops?
    Would I really be performing an illegal activity?

    Consumers are free to hire or not hire whomever they choose.

    badair http://www.adairinspection.com Garland, TX 75042 TREC # 4563
    Commercial-Residential-Construction-EIFS-Infrared Thermography
    life is the random lottery of events followed by numerous narrow escapes

  4. #4
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    Default Re: Checking out E70

    Well, seems to me that they've covered all basis. You cannot act as a Real Estate Inspector for a transfer of Real Property of Residential Property. That's a shame. I know the quality of your inspections, since you kept my business going when I was unable to work.

    But, regarding all the specialties you have, AS YET they have nothing to do with them. TDLR might, but they don't.

    I really like what I do. I can't afford to take on the State, but I can't in good conscience play along with this. I guess I'll have to give it up and concentrate on specialty areas and litigation third party stuff. This sucks.

    Protecting Clients is one thing. Hurting myself is another.

    The only reason some people get lost in thought is because it's unfamiliar territory.
    - Paul Fix

  5. #5
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    Default Re: Checking out E70

    I know it's been posted before, but what, exactly, is the wording in Texas which defines "home inspection" and requires "licensing" as a "home inspector"?

    And, E70 is, I assume E&O?

    Jerry Peck, Construction / Litigation Consultant
    Construction Litigation Consultants, LLC ( www.ConstructionLitigationConsultants.com )
    www.AskCodeMan.com

  6. #6
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    Default Re: Checking out E70

    Quote Originally Posted by Jerry Peck View Post
    I know it's been posted before, but what, exactly, is the wording in Texas which defines "home inspection" and requires "licensing" as a "home inspector"?
    The TX Occupations Code (attached.) , a hopelessly poorly written document, defines all in sections 1102.001, 1102.103, and 1102.1035.

    I'm joining the Dark Side, and it's all their fault. AHHHHHH-hahahahahaha!

    And, E70 is, I assume E&O?
    Yes. I try not to have it link, if possible. Under the current circumstances, I would consider it aiding and abetting. Damn, I wish I hadn't just renewed all my advertising for anothr year.

    Attached Files Attached Files
    The only reason some people get lost in thought is because it's unfamiliar territory.
    - Paul Fix

  7. #7
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    Default Re: Checking out E70

    This is an old response from TREC Q&A
    "the times they are a changin'"

    Q. Is a Texas home inspector required to obtain errors and omissions (liability) insurance?

    A. No. Nothing in the statutes or rules that govern home inspectors requires them to carry any type of liability insurance. The Texas Real Estate Commission is required by law to maintain an “Inspector Recovery Fund”. The fund is available to reimburse persons who have suffered actual damage from a licensed inspector’s act or acts in violation of the statutes. The aggrieved person must have successfully sued the inspector in a civil court. See Subchapter H., Sec. 1102.351, of the Texas Occupations Code entitled, “Real Estate Inspection Recovery Fund” for more information. Chapter 1102 of the Texas Occupations Code may be found here: http://www.trec.state.tx.us/formslaw...codes/rela.asp

    let's see a show of hands that think the recovery fund collection and disbursement will go away after the changes are made.
    taxation without representation

    badair http://www.adairinspection.com Garland, TX 75042 TREC # 4563
    Commercial-Residential-Construction-EIFS-Infrared Thermography
    life is the random lottery of events followed by numerous narrow escapes

  8. #8
    Richard Rushing's Avatar
    Richard Rushing Guest

    Default Re: Checking out E70

    Now... that would really be a kick in the ballz!!!

    Having to have E&0 and have to pay into a recovery fund.

    Damn-it Barry!! most of those jack-azzes werent smart'nuff to beat us with the requirement of both. Now, you've done it!!

    Where is the nearest bridge???


    Rich

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  9. #9
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    Default Re: Checking out E70

    Read

    Section 1102.001, (8), (9), and (10).

    Section 1102.002. Applicability of Chapter, mainly (a).

    Section 1102.102 Real Estate Inspector License Required. Also 1102.103. Professional Inspector License Required.

    Many ways around it in those sections and definitions.



    Texas could become the first "licensed state" with no licensed home inspector and no "unlicensed" home inspectors, yet have plenty of (see Section 1102.002 Applicability of Chapter).

    Last edited by Jerry Peck; 06-14-2007 at 06:37 PM. Reason: typo
    Jerry Peck, Construction / Litigation Consultant
    Construction Litigation Consultants, LLC ( www.ConstructionLitigationConsultants.com )
    www.AskCodeMan.com

  10. #10
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    Default Re: Checking out E70

    Texas could become the first "licensed state" with no licensed home inspector and no "unlicensed" home inspectors, yet have plenty of (see Section 1102.002 Applicability of Chapter).
    __________________
    Jerry Peck
    Ormond Beach, Florida

    I'm all ears.

    What I would really like to do is show them how they cause a conflict of interest if they allow us to have policies with the referring coverage clause.

    The only reason some people get lost in thought is because it's unfamiliar territory.
    - Paul Fix

  11. #11
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    Default Re: Checking out E70

    Section 1102.001, (8), (9), and (10).
    (8) "Professional inspector" means a person
    who represents to the public that the person is trained
    and qualified to perform a real estate inspection and
    who accepts employment to perform a real estate
    inspection for a buyer or seller of real property.
    (9) "Real estate inspection" means a written or
    oral opinion as to the condition of the improvements
    to real property, including structural items, electrical
    items, mechanical systems, plumbing systems, or
    equipment.
    (10) "Real estate inspector" means a person who
    represents to the public that the person is trained and
    qualified to perform a real estate inspection under the
    indirect supervision of a professional inspector and
    who accepts employment to perform a real estate
    inspection for a buyer or seller of real property.

    Section 1102.002. Applicability of Chapter, mainly (a).
    Sec. 1102.002. APPLICABILITY OF CHAPTER.
    (a) This chapter does not apply to a person who
    repairs, maintains, or inspects improvements to real
    property, including an electrician, plumber,
    carpenter, or person in the business of structural pest
    control in compliance with Chapter 1951, if the
    person does not represent to the public through
    personal solicitation or public advertising that the
    person is in the business of inspecting those
    improvements.

    Section 1102.102 Real Estate Inspector License Required.
    Sec. 1102.102. REAL ESTATE INSPECTOR
    LICENSE REQUIRED. A person may not act or
    attempt to act as a real estate inspector in this state
    for a buyer or seller of real property unless the
    person:
    (1) holds a real estate inspector license under
    this chapter; and
    (2) is under the indirect supervision of a
    professional inspector.

    Also 1102.103. Professional Inspector License Required.
    Sec. 1102.103. PROFESSIONAL INSPECTOR
    LICENSE REQUIRED. A person may not act as a
    professional inspector in this state for a buyer or
    seller of real property unless the person holds a
    professional inspector license under this chapter.

    Read *what it says*, not 'what you thought it said'.


    Jerry Peck, Construction / Litigation Consultant
    Construction Litigation Consultants, LLC ( www.ConstructionLitigationConsultants.com )
    www.AskCodeMan.com

  12. #12
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    Default Re: Checking out E70

    I'm not seeing a referring clause in the new amendment. Where are y'all seeing that?

    All I'm seeing in the actual verbage is (3) offers proof that the applicant carries liability insurance with a minimum limit of $100,000 per occurrence to protect the public against a violation of Subchapter G.

    I noticed that Gov. Perry still hasn't signed the bill yet as of today. Not that I'm holding my breath.

    I wrote Gov. Perry a long letter back when this happened questioning the conflict of interest in the representative who added the amendment. The rep's family was (or still may be) in insurance and he is currently an advisor for the company that bought his family's insurance agency.

    Politicians...


  13. #13
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    Default Re: Checking out E70

    JB, if you look at subchapter G, I think you will see the part of the code that says an inspector can't act in a negligent or incompetent manner (paraphrase). The insurance that would cover this is E & O, not general liability, IMO.


    Jerry, I see what you are trying to say (I think) but I doubt a jury would read the statute the way you imply. I could be wrong, but "I" don't want to be the test case. I think the intent of the statute is pretty clear.
    JMO
    Jim

    Jim Luttrall
    www.MrInspector.net
    Dallas, Texas

  14. #14
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    Default Re: Checking out E70

    Quote Originally Posted by Jim Luttrall View Post
    JB, if you look at subchapter G, I think you will see the part of the code that says an inspector can't act in a negligent or incompetent manner (paraphrase). The insurance that would cover this is E & O, not general liability, IMO.
    Yes, I realize that. Unless some mistake has been made , we will have to purchase E/O or quit. The earlier posts mention that we have to indemnify real estate agents. I don't see that anywhere. I'm wondering if they're seeing that in particular E/O policies because I cannot find it in the amendment.

    Thanks,
    Bruce


  15. #15
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    Default Re: Checking out E70

    It's not in the amendment. As you are looking for a carrier (appropriate term for an insurwrence company, carrier) you will notice that it is a sales tool. The problem is that so far, I haven't found one that doesn't "offer" it.

    Can you say "target?"

    The only reason some people get lost in thought is because it's unfamiliar territory.
    - Paul Fix

  16. #16
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    Default Re: Checking out E70

    Hypothetical but I think we can all get the gist of this.

    I can see it now. Just like the phone calls that people get from attorneys after an automoble accident accident, it''ll probably go something like this:

    New homeowner's phone rings with an attorney on the line:

    Attorney:
    "Did you have your home inspected prior to purchase?"

    Homebuyer:
    " Of course."

    Attorney:

    "Did you realize that home inspectors in Texas are required to carry E&O insurance and that many home inspectors miss crucial repair items during the inspection?

    Homebuyer:
    "Really?"

    Attorney:
    "Yes they do and you may be entitled to a settlement. We are offering at no charge to have your home re-inspected by our own inspector to determine if your inspector missed anything. If we find any missed repair issues there will be no charge to you and we can start the leagal proceedings on your behalf for a cut of the settlement."

    Homebuyer:
    "Wow, thanks Mr. Attorney, you are really looking out for the consumer!"

    Of course since the real estate transaction is already over, the attorneys inspector would not be required to carry E&O.


  17. #17
    Richard Stanley's Avatar
    Richard Stanley Guest

    Default Re: Checking out E70

    Coincidence??
    Cahill has been trying to change the Texas SOP.
    Cahill lives in Plano.
    Rep. McCall lives in Plano.
    Cahill announced, after the bill passed, that he will concentrate on the expert witness testimony business.


  18. #18
    Richard Rushing's Avatar
    Richard Rushing Guest

    Default Re: Checking out E70

    Hey Rich S...

    Yep. I think that is only a coincidence.

    That's kinda like saying that most older folks die in bed... so, the bed is causing older people to die.

    Just a coincidence.

    As far as EW work goes... well, there will certainly now be one hell of a market for it as opposed to without the E&0 requirement.

    Bib bucks for a new (opening) niche in the market-- John is just going after bigger business without doing the dirty side of the job... Can't blame him.

    Rich


  19. #19
    Ron Dawes's Avatar
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    Default Re: Checking out E70

    Since the legislation does not require insurance until you renew your license there will be a bit of time that one can still operate without insurance until your renewal.

    I wonder, can one renew early and get a 2 year license before the bill goes into effect?

    The downside of that tactic is that real estate agents will immediately begin telling their clients that all we have insurance as of Sept. 1. so the clients will think we have insurance even if we don't yet.


  20. #20
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    Default Re: Checking out E70

    Quote Originally Posted by Ron Dawes View Post
    Since the legislation does not require insurance until you renew your license there will be a bit of time that one can still operate without insurance until your renewal.

    I wonder, can one renew early and get a 2 year license before the bill goes into effect?
    The downside of that tactic is that real estate agents will immediately begin telling their clients that all we have insurance as of Sept. 1. so the clients will think we have insurance even if we don't yet.
    That is inaccurate. Insurance is required for all on Sept 1. And, it appears, that if your license renewal is due before Sept 1, that TREC commissioners have decided you have to show proof of ins.

    The only reason some people get lost in thought is because it's unfamiliar territory.
    - Paul Fix

  21. #21
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    Default Re: Checking out E70

    Where do you get that information from Thom? The way I read the statute, the proof of insurance is required when renewing, begining on Sept. 1st
    Information has been pretty scarce on this.
    Jim

    Jim Luttrall
    www.MrInspector.net
    Dallas, Texas

  22. #22
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    Default Re: Checking out E70

    From the wording of the final amendment. I'll look it up later tonight if I have time.

    The second issue of between now and Sept 1 is just from the TAREI communication.

    The only reason some people get lost in thought is because it's unfamiliar territory.
    - Paul Fix

  23. #23
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    Default Re: Checking out E70

    Quote Originally Posted by Richard Rushing View Post
    Now... that would really be a kick in the ballz!!!

    Having to have E&0 and have to pay into a recovery fund.

    Damn-it Barry!! most of those jack-azzes werent smart'nuff to beat us with the requirement of both. Now, you've done it!!

    Where is the nearest bridge???


    Rich
    Rich,

    Ain't me bro and don't shoot the messenger.
    Just a reasonable 1+1=2 that also needed to be considered.

    As all of us know any monies that exceed the RF automatically go into the general fund. Any idea how much spillage has occurred since it's inception?

    More stuff in court more TREC claims. Here's the 1+1 part
    Do you really think the lawyers will stop at E&O settlements when TREC has a recovery fund for their client also? Here's the =2 part

    I don't think RF automatically goes away because of mandate for liability or E&O. I believe this would have to be proposed, voted on, and passed by the TREC board. What are the odds of that taking place and if it did would it happen in our life times? VERY DOUBTFUL

    Can you say "double dip" and not the kind we all like on the hot summer days.

    Although we will be the ones wearing the cones on our heads.

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    badair http://www.adairinspection.com Garland, TX 75042 TREC # 4563
    Commercial-Residential-Construction-EIFS-Infrared Thermography
    life is the random lottery of events followed by numerous narrow escapes

  24. #24
    Nolan Kienitz's Avatar
    Nolan Kienitz Guest

    Default Re: Checking out E70

    All -

    From what I was told by my legal contacts at TREC (early information):

    Showing proof of E&O will be required upon the renewal of your license beginning 09/01/2007. If you renew in August-2007 you will have almost two years before you have to show such proof of E&O.

    Nothing was ever said in my conversation with TREC legal (and I did ask) if there was any consideration of required E&O as of 09/01/07.

    AG's office supposedly got a letter from TREC ... had more questions for clarification as to a broader impact including VIP inspections, 203-K inspections, etc. Was a planned way to ask the AG (actually created a smoke screen) for the clarification that would impact a much broader base.

    AG's office has 45 days to respond ... likely won't hear until August.

    As for raising prices ... it would be good, but consider that some TX HI's already carry and have been carrying E&O for many years. Don't know that they have substantially higher rates than majority. Difficult place to be ... between the proverbial rock and a hard place.

    Patience is key to also wait and see what the 'official' word will be. There may be a list of 'approved' insurance providers from TREC as well (I've asked the question, but not had a solid response on that).

    Scott P. indicated checking with carriers. I've been doing that as well. For example Allen (out of Georgia) has insurance, but can't write policies in many states including Texas. Their package had a lot of good information just for reading and learning about the many variances in E&O coverage and plans.

    I'm sure more to come when we least expect it.


  25. #25
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    Default Re: Checking out E70

    Here is the text:

    SECTION
    A39.AASubsection (a), Section 1102.203, Occupations
    Code, is amended to read as follows:
    (a)
    AAA person may renew an unexpired license by paying the
    required renewal fee to the commission before the expiration date
    of the license and providing proof of liability insurance as
    required by Section 1102.114(3).


    Elsewhere it says this all takes place on Sept. 1

    My renewal expires 8/31. I think I'll send mine in now and see what happens.


  26. #26
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    Default Re: Checking out E70

    Quote Originally Posted by Jim Luttrall View Post
    Where do you get that information from Thom? The way I read the statute, the proof of insurance is required when renewing, begining on Sept. 1st
    Information has been pretty scarce on this.
    Jim
    Jim, You may be correct. My information came from a State Rep and his staff's understanding. I'm sure we'll all know soon. Midnight tonight, in the absense of a veto, it will be law.

    The only reason some people get lost in thought is because it's unfamiliar territory.
    - Paul Fix

  27. #27
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    Default Re: Checking out E70

    I've been checking Gov. Perry's website. He's already signed it. I pulled up his website Thurs. and it hadn't been signed.

    It looks like he signed it on Friday.

    Being out of the loop with regards to having any contacts and reading the law exactly as written, I'm sending my renewal applications/fees in today.

    It may or may not give me 2 more years. I'm not holding my breath for it and I don't really expect this to work, but we'll see what happens.

    Bruce


  28. #28
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    Default Re: Checking out E70

    Quote Originally Posted by Thom Walker View Post
    Jim, You may be correct. My information came from a State Rep and his staff's understanding. I'm sure we'll all know soon. Midnight tonight, in the absense of a veto, it will be law.
    Thank you for continuing to check on this.

    Bruce


  29. #29
    Ron Dawes's Avatar
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    Default Re: Checking out E70

    The legislature status web site says the bill was not signed and not vetoed so becomes effective on 9/1


  30. #30
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    Default Re: Checking out E70

    Actually he did.

    From the website of Gov. Perry: (I bolded the words - BT)

    Message - June 15, 2007



    The purpose of SB 914 is to continue and improve the functions of the Texas Real Estate Commission. A provision in the bill requires all real estate inspectors to purchase liability insurance. This mandate is a financial burden on small and independent inspectors who will be out of pocket more than $1,300 a year and will most certainly pass the cost onto consumers. The legislature did not properly consider the effects this will have on the market, and how it will make the American Dream more expensive. At the same, I couldn't justify the elimination of a vital regulatory agency despite this onerous clause.
    I encourage the Legislature to rethink this requirement and address this problem in 2009.
    IN TESTIMONY WHEREOF, I have signed my name officially and caused the Seal of the State to be affixed hereto at Austin, this 15th day of June, 2007.
    RICK PERRY
    Governor of Texas
    ATTESTED BY:
    ROGER WILLIAMS
    Secretary of State


  31. #31
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    Default Re: Checking out E70

    I sent him a personal letter addressing this issue. I hope others did as well. I don't know if anything can be done to re-address this 2 yrs from now but I think we should try to see if it can be reversed.

    Pie in the sky??? I don't know.

    Bruce


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