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  1. #1
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    Default Buyers left with big bills when home inspectors miss defects

    Buyers left with big bills when home inspectors miss defects
    Contracts often limit inspector’s payout to refund of inspection fee

    Buyers left with big bills when home inspectors miss defects - British Columbia - CBC News

    And yes even Mike Holmes limits their liability to the fee paid for the inspection.

    As with everything in life there is good and bad and this lady got the bad. Licencing does not change a thing for her or the inspector or the public.

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    Inspection Referral SOC

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    Default Re: Buyers left with big bills when home inspectors miss defects

    THE INSPECTION WAS 3 YEARS AGO.. THE WOOD ROT WAS NOTICED WHEN THE WALLS WERE TORN OUT BEHIND THE FURNACE?
    DID I MISS SOMETHING IN THE VIDEO?
    SHOW US THE REPORT!!
    BUYERS NEED TO KNOW THE LIMITATIONS WE HAVE SINCE WE ARE MERELY GUESTS IN THE SELLERS HOUSE!!. (IT IS THE SELLER'S HOUSE)

    A HOME INSPECTION IS THE BEST MONEY SPENT PRIOR TO PURCHASE.

    AN APPRAISER IS 400 BUCKS TO TELL YOU WHAT THE NEIGHBORS HOUSE SOLD FOR.
    ..A SURVEYER IS 350..(LIKE THE OLD SURVEY IS USELESS??COME ON..)

    TITLE INSURANCE COVERS NOTHING UNRECORDED AT TIME OF TITLE EXAM FOR OVER 1000 BUCKS..IT COVERS NOTHING! AHHH!!
    THIS GUY IS GETTING THE BONE!!


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    Default Re: Buyers left with big bills when home inspectors miss defects

    Yo, Chris!

    How about lightening up on the caps? Just proper nouns and the first word of each sentence will usually work just fine.


  4. #4
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    Default Re: Buyers left with big bills when home inspectors miss defects

    Part of the problem will be resolved when Canadian law no longer recognizes the HI's ability to limit their liability to the fee paid.

    In this case the HI "guarantees peace of mind" which sounds good but is really worthless by his disclaimer of what he is responsible for. His credentials would make me hope that this case is atypical and just a fluke. Though credentials often mean absolutely nothing about ability or commitment.

    Looking at the video there is enough shown of the exterior construction method, foundation and grading that should set off bells and whistles to look really close at all of the framing and structure at and below grade. Which is where the major problems occurred. The fact that it took 3 years before the defect was determined is as a result of the owners "guaranteed peace of mind". I am sure it turned up when she went to do something in the basement apartment. Prior to that the tenant wasn't complaining and there was no work needed.

    I have no issue with not being responsible for hidden defects. But the question is how hidden and should the HI should have known the potential presence of defects and been more aggressive in the inspection. I would say that there was enough evidence that a more aggressive approach should have been taken.

    Now I am sure some will jump on the "not required" part of the SOP. But, not required does not mean that it can not be done.

    From CAHPI SOP 2012
    4.1 The inspector shall:
    A. inspect:
    1. structural components including visible
    foundation and framing.
    2. by probing a sample of structural components
    where deterioration is suspected or where
    clear indications of possible deterioration
    exist. Probing is NOT required when probing
    would damage any finished surface or where no
    deterioration is visible.


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    Default Re: Buyers left with big bills when home inspectors miss defects

    Limiting liability to the inspection fee is not the problem. The problem is that licencing was enacted in order to instill confidence in the inspection industry in BC. That has not been achieved and does nothing to instill confidence in the public. The plaintiff still has to go to court even if there was no liability disclaimer.

    We do not know if these issues were latent or patently obvious. And there is a big difference in liability if the issues are latent. Remember an inspection is visual and non destructive. There will always be second guessing in situations such as these.

    Sadly as with most of these case the press is quick to paint the inspector as guilty even though we the reader do not have the privilege of seeing what the report actually contained. He may be completely absolved of liability if it gets to court.

    Whether not there is a limit of liability or not the fact remains that the consumer in order to gain satisfaction must still use the courts in order to have redress. Even then there is no guarantee the plaintiff will succeed. Its all based on facts and the media is not the trier of fact, nor the reader without all the facts.

    At this point in time there are more questions then answers and I don't blame the inspector for refusing to comment to the press given how they sensationalize stories.

    Read some of the ignorant posts by people who don't have a clue what they are talking about or use a large paint brush to make wild irrelevant statements.

    To err is human and I really don't understand what the public wants. They wanted licencing and they got it and now they are not happy with it! Give me a break.


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    Default Re: Buyers left with big bills when home inspectors miss defects

    The public needs to see the Report..along with the opinions.. complaints.. and slander..at least that would be fair.
    This guy is ruined.
    This reminds me of the heroic security guard at the Olympics in Atlanta.
    He saved countless lives by finding a bomb....but the media accused him of placing it there...NICE!


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    Default Re: Buyers left with big bills when home inspectors miss defects

    Chris,

    The inspector was smart by not talking to the press; thats for sure!

    These are the same exaggerated, tactics that Mike Holmes used on his show. Mike would blame the inspector for missed defects and of course no one was able to dispute the facts because big mouth Mike knew of the liabilities he would incur by doing so.

    And by the way what does the lady having cancer have to do with her perceived plight?


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    Default Re: Buyers left with big bills when home inspectors miss defects

    I just left a comment about licensure in "two page report" so I won't repeat it here. Sufficient to say, licensure is very over rated and the recourse for a wronged person remains in the courts.

    At this point, based on the small amount of "evidence" presented, I don't see a case against the inspector. What I see is a very unfortunate buyer who bought a money pit and now wants some one to pay for her bad luck.

    I disagree with Garry. We try to limit our liability because we don't have xray vision. We try to limit our liability because the best of our abilities, and the use of high tech tools like moisture meters and IR cameras can only tell us so much, but never everything. And finally, we try to limit our liability because we can never know the motivations of some people who aren't always honest and aren't constrained by right and wrong. There are bad people who buy homes too. An investor friend of mine ran into a professional suer who had a track record of buying homes in different states and then suing everyone involved. They had successfully pulled this off in five states before being exposed when they tried it here.

    In a humid climate like Vancouver, wood rot problems can change dramatically in three years. Even in my dry climate, the wood rot in my deck went from mild surface damage to deep rot in three years. (Sure as an inspector, there was something to see three years earlier but it was exposed for anyone to see on an open deck, not hidden inside a wall)

    I want to see the video of the house from three years ago. That might tell us if the inspector actually blew it. (Convenient for the plaintiff that that video doesn't exist.) A news agency investigation film isn't evidence at all. This was nothing but a hit piece on the inspector. I'm sure that his attorney advised him not to be interviewed, but that just opened the door for CBC to take a free shot at him. Maybe the inspector blew it, but there was nothing presented by the CBC story that proves that.

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    Default Re: Buyers left with big bills when home inspectors miss defects

    Lon, very good points!

    I went to the inspectors website and looked over his contract. The only thing I could see is his limitation of liability should be at the top of the contract, not at the bottom. The limitation should also be in bold type. Also some inspectors have the limitation clause initialed by the client.

    As for myself I have a limitation of liability clause in my contract and its at the top of the contract and in bold fwiw.

    If clients don't like my contract they are also free to contract with another inspector who may have a contract which is more suited to the likes of the client.

    Further I did post comments to the story and I also sent CBC a letter indicating my displeasure in the manner it was reported.


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    Default Re: Buyers left with big bills when home inspectors miss defects

    Kevin.

    All the associations have fallen short of taking Mike on for his unwarranted comments and slurs.

    CAHPI paid Mike $20K to come speak at one of their annual conferences a number of years ago. He no sooner had completed his speaking engagement and he was mouthing off about what a bad lot home inspectors are!


  11. #11
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    Default Re: Buyers left with big bills when home inspectors miss defects

    Quote Originally Posted by Kevin Wood View Post
    I had one just before Christmas call me up and say "I wish I had listened to you"
    I told here to check the wall at the back of the home that had been finished up nice to hide what was behind.
    She payed the price because she bought the place without removing the the one section of wall I recommended before the purchase. After she bought the Home she called in a Contractor to remove it and sure enough it was leaking behind.
    Here is the response Back!
    I bet the Real Estate Agent put pressure on the spot for her to sign also.
    Hey Kevin - not sure if you remember me or not! xxxxxx...turns out the home owners totally covered up major water seepage in the basement Just brutal. I have had to totally demolish my basement and rip out the subfloor and drywall etc. I can't believe how ruthless people can be with honesty these days. I know it was something you wouldn't have been able to see based on the reno's they did, but it's just devastating Taking the drywall off and 2X4's off, it's obvious they put it all up to cover it up. I don't think there is anything I can do about it since they said there was some "seepage" in the basement...even though they verbally said it was normal and would go into the trenches.
    Here in Colorado, that buyer might have recourse against the seller. Here, if there is evidence that a seller knew about a problem and failed to adequately and completely disclose it, they can be found liable for repairs. The buyer should consult with an attorney regarding if the disclosure about seepage was adequate for what the seller really knew. But of course, that may mean a trip through the courts.

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    Default Re: Buyers left with big bills when home inspectors miss defects

    Well .... its going to be interesting to see what CBC has to say to me in regards to my comment to them on their lop sided story. I doubt very much I will hear anything.

    My advice should any of you find yourself in similar circumstances is do not comment to the press unless you have a prepared statement or you have a lawyer respond to the media.


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    Default Re: Buyers left with big bills when home inspectors miss defects

    Not to worry. Most people up here know the CBC
    only has chemical traces of an audience.


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    Default Re: Buyers left with big bills when home inspectors miss defects

    John

    Even Mike Holmes on Holmes Inspection was smart enough not to mention the names of the offending home inspectors for fear of lawsuits.


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    Default Re: Buyers left with big bills when home inspectors miss defects

    Quote Originally Posted by Raymond Wand View Post
    Limiting liability to the inspection fee is not the problem. The problem is that licencing was enacted in order to instill confidence in the inspection industry in BC. That has not been achieved and does nothing to instill confidence in the public. The plaintiff still has to go to court even if there was no liability disclaimer.

    We do not know if these issues were latent or patently obvious. And there is a big difference in liability if the issues are latent. Remember an inspection is visual and non destructive. There will always be second guessing in situations such as these.

    Sadly as with most of these case the press is quick to paint the inspector as guilty even though we the reader do not have the privilege of seeing what the report actually contained. He may be completely absolved of liability if it gets to court.

    Whether not there is a limit of liability or not the fact remains that the consumer in order to gain satisfaction must still use the courts in order to have redress. Even then there is no guarantee the plaintiff will succeed. Its all based on facts and the media is not the trier of fact, nor the reader without all the facts.

    At this point in time there are more questions then answers and I don't blame the inspector for refusing to comment to the press given how they sensationalize stories.

    Read some of the ignorant posts by people who don't have a clue what they are talking about or use a large paint brush to make wild irrelevant statements.

    To err is human and I really don't understand what the public wants. They wanted licencing and they got it and now they are not happy with it! Give me a break.
    As an authority on the home inspection industry in Canada and Ontario Raymond you are correct. Regulations and licensing is toothless and deceiving. A pacifier to the real estate buyer period.
    Regulations and licensing of inspectors can be a good thing BUT their are members at the table that should not be there and need regulations of their own IMO.
    R&G instills a mindset of safety among home buyers leaving real estate and mortgage company's to weigh-in on discussions that leads to the biggest conflicts of free market the world has ever seem. That is what lead to the sib prime mortgage fiasco. Real estate, banking and mortgage company's being let into another sector of the world economy.
    Once home inspectors are free from being referred by Real Estate agents the passing of time will allow the industry to evolve into a truly trusted profession and not just an evolving cottage industry that is now mostly title without substance.
    JMO

    Robert Young's Montreal Home Inspection Services Inc.
    Call (514) 489-1887 or (514) 441-3732
    Our Motto; Putting information where you need it most, "In your hands.”

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    Default Re: Buyers left with big bills when home inspectors miss defects

    Good morning Robert,

    I agree there are people that may be sitting at the licencing table that should not be there, but I have been told by government officials that its an open consultative process. However I think the officials should be aware of some of the antics which have transpired, too many skeletons in some closets and some of these people at the table are not lilly white.

    As to referrals from agents. It works both ways. Yes there are slimy agents who will throw their mother under the bus in order to get their commission. I think I have worked with a number of them. However I also know that there are some very good agents who only recommend good inspectors as I have the privilege of being recommended by them.


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    Default Re: Buyers left with big bills when home inspectors miss defects

    Quote Originally Posted by Raymond Wand View Post
    Good morning Robert,

    I agree there are people that may be sitting at the licencing table that should not be there, but I have been told by government officials that its an open consultative process. However I think the officials should be aware of some of the antics which have transpired, too many skeletons in some closets and some of these people at the table are not lilly white.

    As to referrals from agents. It works both ways. Yes there are slimy agents who will throw their mother under the bus in order to get their commission. I think I have worked with a number of them. However I also know that there are some very good agents who only recommend good inspectors as I have the privilege of being recommended by them.
    Yes Raymond I agree that there are brokers (in Quebec) that are professionals in every sense of the word. Its a breath of fresh air when neutrality exists and ones manor and degree of education and prior experience is what is conversed and weighed as relevant if referrals are to be discussed.

    You know as well as I know that the opposite is realty unfortunately.
    That being said, remove the conflicts of interest and the home buyer will be the greatest winner and home inspection industry will develop with home inspectors for the most part being AT ARMS LENGTH.

    IMO; Most failures in reporting do not come from the inadequacies of the inspector but from their failure to market them-self effectively.
    They for the most part try to win free marketing from agents. that in itself creates a brand that will be telegraphed though out a district.
    Like mine. This can not be over looked during the discussions. I have followed the pattern for 3 years.

    Licensing exists already. Home inspectors should follow the provincial business protocol. Vehicular signage, commercial plates and registering yourself as a business. The end!!!!
    Regulations are developed through the association. associations. This would exempt governments from getting to involved.

    Association protocol and review of their inspectors that have complaints. from any wrong doing.
    IE: CAHPI has not done enough, if anything, after Toth's reporting effort. Note that Toth was the first case successfully litigated in BC. A sad state of affairs when CAHPI represents them-self as Canada's oldest and biggest Home Inspection association and continually place them-self front and center when licensing is being discussed.
    To bad.
    So sad.
    Another CHAPI member drops the ball and
    they do nothing again.


    As explained, I have meet some truly professional agents but with the home inspection profession growing at an alarming rate, referrals must be stopped or at the very least every agents list the inspectors they refer. Then there would be a pattern to follow if any from of collusion exists.
    The governments can follow the money being made and make recommendations built upon fact.
    Sorry for the editing, eye infection from the last attic space I suspect.
    All the best Ray.

    Last edited by ROBERT YOUNG; 02-24-2013 at 06:36 AM.
    Robert Young's Montreal Home Inspection Services Inc.
    Call (514) 489-1887 or (514) 441-3732
    Our Motto; Putting information where you need it most, "In your hands.”

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    Default Re: Buyers left with big bills when home inspectors miss defects

    Quote Originally Posted by CHRIS KRUSE View Post
    THE INSPECTION WAS 3 YEARS AGO.. THE WOOD ROT WAS NOTICED WHEN THE WALLS WERE TORN OUT BEHIND THE FURNACE?
    DID I MISS SOMETHING IN THE VIDEO?
    SHOW US THE REPORT!!
    BUYERS NEED TO KNOW THE LIMITATIONS WE HAVE SINCE WE ARE MERELY GUESTS IN THE SELLERS HOUSE!!. (IT IS THE SELLER'S HOUSE)

    A HOME INSPECTION IS THE BEST MONEY SPENT PRIOR TO PURCHASE.

    AN APPRAISER IS 400 BUCKS TO TELL YOU WHAT THE NEIGHBORS HOUSE SOLD FOR.
    ..A SURVEYER IS 350..(LIKE THE OLD SURVEY IS USELESS??COME ON..)

    TITLE INSURANCE COVERS NOTHING UNRECORDED AT TIME OF TITLE EXAM FOR OVER 1000 BUCKS..IT COVERS NOTHING! AHHH!!
    THIS GUY IS GETTING THE BONE!!
    The inspection was recent.
    The CBC media news talks about BC regulating the industry 3 years prior. 2009 if my memory is correct.
    Toth's negligent efforts to evaluate costs of defects for one, with the second being a reasonable amount of time to pass that allows any client to understand the PIA or contact. I think 72 hours was the timeline. Encase the deal was struct on a Friday the weekend could pass allowing the client to hire a lawyer or notary to explain the contract to them the following Monday.
    Every province has had an association of association whispering for control.
    To bad.
    So sad.
    Those were the two main issues in the case against Toth although the judge in the case sited several improprieties. The contact was the straw that broke the camels back. I have heard many inspectors handing a client the contact at the inspection.
    R&G where destine to BC. because of toth. That is fact.
    CANACHI helped the home inspection industry in many ways while being roughed up and their MB attacked by none affiliated members. I think William D. was the author of CANACHI. I could be mistaken.

    Both inspectors were CAHPI association members.
    They both archived the highest awards for civil damage steaming from a home inspection in BC court of law. Toths was the first by succession. It was the first case won by a plaintiff with another case awaiting to see if any presidents are set. Both were CAHPI members if my memory serves me correctly.

    I have followed regulations in the states and Canada. Personal discussions with inspectors have lead me to believe its an on going process. The winners; Regulations culls the heard. The home buyers have yet to see any help.
    JMO.

    Robert Young's Montreal Home Inspection Services Inc.
    Call (514) 489-1887 or (514) 441-3732
    Our Motto; Putting information where you need it most, "In your hands.”

  19. #19
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    Default Re: Buyers left with big bills when home inspectors miss defects

    I read the story about Toth. The Canadian court's ruling about Toth's contract is very different than the few I've heard about in the US. But it's tough finding stories about court cases against home inspectors. Finding complaints against HIs is easy but finding actual adjudicated lawsuits is hard. I'm wondering if you guys know about some and can post some information.

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    Default Re: Buyers left with big bills when home inspectors miss defects

    Lon

    Here is case from Ontario that is oft quoted in other case law in Canada.

    Attached Files Attached Files

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    Default Re: Buyers left with big bills when home inspectors miss defects

    Another

    Attached Files Attached Files

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    Default Re: Buyers left with big bills when home inspectors miss defects

    Another from California

    Attached Files Attached Files

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    Default Re: Buyers left with big bills when home inspectors miss defects

    Quote Originally Posted by Raymond Wand View Post
    Lon

    Here is case from Ontario that is oft quoted in other case law in Canada.
    Hmmm, I never thought of going to a donut shop to finish the report, but these days, it'd probably be a Starbucks.

    The courts decision seems appropriate for the evidence presented.

    Currently a home inspector here is being sued by a seller. The case is set for trial in October. Of course, it may be delayed, but the risk of suit from a vindictive third party is one that I hadn't seriously considered since they aren't a party to the home inspection contract. But like everyone always says, anyone can sue anyone for any reason.......it's what the courts decide that matter.

    In any event, I'll post the outcome when it's resolved.

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    Default Re: Buyers left with big bills when home inspectors miss defects

    Thanks for the postings.

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    Default Re: Buyers left with big bills when home inspectors miss defects

    Anytime, and you are welcome!


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    Default Re: Buyers left with big bills when home inspectors miss defects

    Robert,
    Thank you for correcting me.
    I thought the inspection WAS 3 years ago .I did not know that this inspection occurred recently..
    I misunderstood and started to RANT..I hate when I embarrass myself.


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    Default Re: Buyers left with big bills when home inspectors miss defects

    Quote Originally Posted by Raymond Wand View Post
    Another from California
    This Leko v Cornerstone Home Inspection ruling in California is pure BS. Third party responsibility to unnamed and unknown persons is wrong! Hopefully, that kind of nonsense stays in California. There is plenty of liability and responsibility for us, without adding garbage like this.

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    Default Re: Buyers left with big bills when home inspectors miss defects

    Quote Originally Posted by Lon Henderson View Post
    This Leko v Cornerstone Home Inspection ruling in California is pure BS. Third party responsibility to unnamed and unknown persons is wrong! Hopefully, that kind of nonsense stays in California. There is plenty of liability and responsibility for us, without adding garbage like this.
    Lon,

    Did you read that pdf?

    That case establishes that a home inspection company may seek equitable indemnity from a realtor based on the failure of the realtor to disclose THE SAME DEFECTS THE HOME INSPECTOR is inspecting for - remember those discussions we have now and then regarding inspectors reading seller disclosures? Think about it ... and that if the seller, and the realtor, fail to disclose the same items that the home inspector is inspecting for and does not find, and is then sued for, the home inspector can sue the seller and realtor to seek equitable indemnity from each/both parties. what did you say about that staying only in California?

    Q.: "May a realtor who is sued for negligent nondisclosure of defects in real property obtain equitable indemnity from a home inspection company that allegedly breached its duty to the purchaser to discover and disclose the same defects?"
    - A.: "Yes."
    - - My Comment: See my comment above, this should be applicable in the reverse and allow the home inspector to sue the realtor and the seller for non-disclosure of the same defects that the the home inspector was inspecting for.
    Q.: "May that same realtor seek equitable indemnity when the home inspection company prepared its report for a different prospective purchaser, in connection with a previous transaction involving the same property?"
    - A: "Yes, so long as the home inspection company intended or knew with substantial certainty that its report would be used in subsequent transactions involving the property"
    - - My Comment: "so long as the home inspection company intended or knew with substantial certainty" I thought by now that ALL HOME INSPECTORS CONTRACTS AND REPORTS contain a statement which restricts the use of the information in that report to the clients stated in that report - seems as though some did/do not. I used to have, on every page in the footing, not only that the report was copyrighted by me, but that the report and its findings were to be used only by the client shown on the report, and that the use or reliance on the report by any other party obligated them to hold me harmless. Think about that a moment ... do you think the judge could have determined that I "intended ir knew with substantial certainty" that my "report would be used in subsequent transactions involving the property" ... ? Not a chance, because I not only stated that the report was for the restricted use of my named client but that if the report is used or relied on by anyone else ... THAT person (or persons) would hold be harmless. Cannot get any clearer than that in stating that I not only do not intend, and that I do not know, my report will be used by others, but that I even tell those others that if they do use my report THEY will hold ME harmless - it is clear to those others (realtors, attorneys, etc.) that *I* do not intend, nor that *I* know, my report would be used by others. In fact, I acknowledged that I suspected such might happen and that *I* forbade it and told those others that they would hold me harmless.

    I suspect that a very strongly worded prohibition like my old one would have protected that home inspector, and, if the judge had decided otherwise, the same statement advised the offending party that they would hold me harmless, meaning that they could sue me, but in doing so they had to admit that they used my report without my permission and that they knew doing so would cause them to hold me harmless - i.e., that they would have to pay for my attorney, their attorney, and any award they were trying to get from me ... the net effect being 'why sue somebody for something when you have already agreed to pay all of that person's costs and hold them harmless?'.

    There is a lot more in there, but that establishes that the realtor can be held liable by the home inspector if the home inspector is sued for missing something - provided that the home inspector bothered to read the disclosures and incorporate those disclosures into the home inspection report.

    W. C. Jerry would have a field day with that decision if he were still with us.

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

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    Default Re: Buyers left with big bills when home inspectors miss defects

    [qu ote=ROBERT YOUNG;220980]As an authority on the home inspection industry in Canada and Ontario Raymond you are correct. Regulations and licensing is toothless and deceiving. A pacifier to the real estate buyer period.
    Regulations and licensing of inspectors can be a good thing BUT their are members at the table that should not be there and need regulations of their own IMO.
    R&G instills a mindset of safety among home buyers leaving real estate and mortgage company's to weigh-in on discussions that leads to the biggest conflicts of free market the world has ever seem. That is what lead to the sib prime mortgage fiasco. Real estate, banking and mortgage company's being let into another sector of the world economy.
    Once home inspectors are free from being referred by Real Estate agents the passing of time will allow the industry to evolve into a truly trusted profession and not just an evolving cottage industry that is now mostly title without substance.
    JMO[/quote] Never knew Raymond was approved as an authority on home inspections in Canada and Ontario,who gave him that authority? Noo body.


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    Default Re: Buyers left with big bills when home inspectors miss defects

    Harry,

    Are you still a member of OAHI?


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    Default Re: Buyers left with big bills when home inspectors miss defects

    Well, Jerry, I did read the entire pdf, even if it's written in a language that appears to have English words but still needs an interpreter to read it.

    On page 5, it says (Bus. & Prof. Code, 7198 ["Contractual provisions that purport to waive the duty owed pursuant to Section 7196, or limit the liability of the home inspector to the cost of the home inspection report, are contrary to public policy and invalid."]

    Now that is a standard clause in just about every inspector's contract that is invalidated by fiat decision. But not even that, gets to my complaint with this ruling.

    Further down, on page 6, it says that "Crystal and D-Way argue that they owed no duty to Purchasers because they performed their inspections solely for a third party's benefit, and that as a result, they are not jointly and severally liable for Purchasers' injuries. We disagree."
    A few sentences later, " Because their only connection with Purchasers was through their inspection reports, such a duty must arise from representations contained in those reports, rather than negligence in the course of the inspections themselves."

    And on page 7, we find the real outrage; "A reasonable trier of fact could infer that when Crystal and D-Way provided their reports to the listing agent on the property, they knew with substantial certainty that those reports would be transmitted to other prospective purchasers if the pending deal fell through." "This inference may be drawn even though Crystal's written contract with Antonsen stated that the report could not be used by or transferred to other persons without Antonsen's and Crystal's consent." (my emphasis) Incredibly, the order concludes the paragraph by saying "Crystal and D-Way did not establish, as a matter of law, that they believed the inspection reports would be used solely by Antonsen, the previous purchaser." Maybe they needed to offer to sacrifice a first born if they didn't believe that their report was for the sole use of their client.......but I bet that wouldn't have mattered to this California court who was hell bent on including the inspectors into this suit.

    Jerry, how did I misread it? I see what you mean about the ruling giving home inspectors equal indemnity with the agents, but big whoop. The problem with this ruling is about liability to a third party. And based on what I read in this ruling, I don't see any evidence that your strongly worded disclaimer would help you in California. I too, have a strongly worded disclaimer about no liability to third parties. We always say that a contract is only as a good as a court says it is, but in California, apparently, a contract isn't any good at all. Hopefully, this is not a contagion spreading to other states. A home inspector here in Colorado, has a similar disclaimer in his contract, and now is embroiled in a lawsuit with a seller that he never had an agreement for anything with.

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    Default Re: Buyers left with big bills when home inspectors miss defects

    Quote Originally Posted by Lon Henderson View Post
    And on page 7, we find the real outrage; "A reasonable trier of fact could infer that when Crystal and D-Way provided their reports to the listing agent on the property, they knew with substantial certainty that those reports would be transmitted to other prospective purchasers if the pending deal fell through." "This inference may be drawn even though Crystal's written contract with Antonsen stated that the report could not be used by or transferred to other persons without Antonsen's and Crystal's consent." (my emphasis)

    .

    Jerry, how did I misread it?
    Because stating "even though Crystal's written contract with Antonsen stated that the report could not be used by or transferred to other persons without Antonsen's and Crystal's consent." is only half the requirement - in my opinion - because it does not continue and advise anyone and everyone that if they do use the report without permission that such person or persons shall hold the inspector and inspection company harmless.

    That is the part which acknowledges what the judge said " ... they knew with substantial certainty that those reports would be transmitted to ... " by stating that ... *hey, by the way, I/we know with substantial certainty that the report will be transmitted to* ... others and that those others "agree to hold us harmless" by their use and or reliance on the report.

    The only way we will ever know this for it to be tested in court, but the statement that I used in on every page of my reports addressed - specifically - what the judge addressed: yeah, I *KNOW* ... with certainty ... that my reports would be passed on and used by others, and that I am telling each and everyone of those people, on each page of the report, that they agree to hold me harmless WHEN - yes, *when* - they use and or rely on the report.

    Takes the uncertainty out of it by acknowledging that the report will be passed on and that those who use it or rely on it agree to hold *ME* harmless. Which means that they use it at *their* own risk.

    At least, that is my opinion - but I've said that a couple of times already.

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

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    Default Re: Buyers left with big bills when home inspectors miss defects

    Quote Originally Posted by Harry Janssen View Post
    [qu ote=ROBERT YOUNG;220980]As an authority on the home inspection industry in Canada and Ontario Raymond you are correct. Regulations and licensing is toothless and deceiving. A pacifier to the real estate buyer period.
    Regulations and licensing of inspectors can be a good thing BUT their are members at the table that should not be there and need regulations of their own IMO.
    R&G instills a mindset of safety among home buyers leaving real estate and mortgage company's to weigh-in on discussions that leads to the biggest conflicts of free market the world has ever seem. That is what lead to the sib prime mortgage fiasco. Real estate, banking and mortgage company's being let into another sector of the world economy.
    Once home inspectors are free from being referred by Real Estate agents the passing of time will allow the industry to evolve into a truly trusted profession and not just an evolving cottage industry that is now mostly title without substance.
    JMO
    Never knew Raymond was approved as an authority on home inspections in Canada and Ontario,who gave him that authority? Noo body.[/QUOTE]

    Harry, whats with the demeanor, outward behavior or bearing?
    I suspect Mr. Wand is one or two up on your observations of the Home Inspection Industry.
    I have only known Raymond to carry and provide fact instead of your bias.
    All the best Harry.


    Last edited by ROBERT YOUNG; 02-24-2013 at 09:14 PM. Reason: Sorry for the edit everyone.
    Robert Young's Montreal Home Inspection Services Inc.
    Call (514) 489-1887 or (514) 441-3732
    Our Motto; Putting information where you need it most, "In your hands.”

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    Default Re: Buyers left with big bills when home inspectors miss defects

    Quote Originally Posted by John Kogel View Post
    Raymond has not called himself an authority, AFAIK. Robert Young did so as a complement, but did not say he was approved. He apparently does not have unanimous approval.

    IMO, Raymond is the go-to guy for litigation issues pertaining to Canadian HI's. JMO.
    I concur John.
    Roy Cooke is also a a great source of information that is unbiased and founded with/in fact.
    What ever happened to OHIA when Roy and his son left? Everyone is still holding mixed felling I hear. Oh well.
    Maybe OntarioACHI will be able to create a new attitude.
    All the best, John.
    Thanks for the litigation cases Ray.

    Robert Young's Montreal Home Inspection Services Inc.
    Call (514) 489-1887 or (514) 441-3732
    Our Motto; Putting information where you need it most, "In your hands.”

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    Default Re: Buyers left with big bills when home inspectors miss defects

    Thanks Robert and John, my pleasure.


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    Default Re: Buyers left with big bills when home inspectors miss defects

    Jerry, I still don't think I missed anything, but I also don't think we have insufficient information about the precise disclaimer wording in Crystal's contract to know how strong it was. And we don't know what Crystal disclosed in depositions or hearings, that caused the court to find that Crystal had reason to think that their report would be part of a future unknown buyer's decision making. Sure, I have been aware that my report was going to be forwarded to a seller's agent, despite my warning disclaimer in the contract, but my disclaimer makes it clear that I have no fiduciary or liability to them. I contend that in California, that doesn't appear to have the backing of judicial decisions.

    And further, this order appears to just concern whether Crystal and D-Way can be excluded from liability based solely on their lack of connection with any of the primary litigants. I don't see anything that describes the outcome of this suit regarding who won. Did the defendants win? I can't find that. Were Crystal and D-Way or Cornerstone actually found guilty of negligence and did they have to pay some damages? So, maybe I did miss something, afterall.

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    Default Re: Buyers left with big bills when home inspectors miss defects

    Harry,

    This is definitely in the category of FWIW, because I'm not Canadian, so I have no idea if Raymond Wand is a recognized authority on Canadian home inspectors, but I can assure you, that he has great information and opinions, that I appreciate reading about inspections and the inspection industry in general.

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    Default Re: Buyers left with big bills when home inspectors miss defects

    Thanks Lon. I have my detractors and have always been controversial (I think)

    Here is an article with clarification of the Leko vs. Cornerstone case

    https://docs.google.com/viewer?a=v&q...tSSxASZ4ALiMvw


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    Default Re: Buyers left with big bills when home inspectors miss defects

    Quote Originally Posted by Raymond Wand View Post
    Thanks Lon. I have my detractors and have always been controversial (I think)

    Here is an article with clarification of the Leko vs. Cornerstone case
    Well, I still don't see if the HIs were ultimately found negligent. I tried to google up the final outcome of the suit but didn't see it. Maybe, after this ruling, they all reached some settlement which was confidential as settlements often are.

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    Default Re: Buyers left with big bills when home inspectors miss defects

    Lon,

    The Leko case is a hard read at least for me. I think Cdn case law is a much more easier read.


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    Default Re: Buyers left with big bills when home inspectors miss defects

    I, like most of my colleagues /competitors, would not be Home Inspectors if we didn't provide a good service.. while making a decent living.
    Occassionally I am asked to do an inspection because someone's favorite inspector had to get a" Real Job"...That is unfortunate.
    Just what is happening here..we for the most part should be hired as visual inspectors and advisors..Relatively Low cost Advisors..
    If we are constantly faced with the threats of lawsuits...then we cannot charge what we charge today..We will need to double or triple our price.
    then we will be looking for a "Rea lJob" as well.


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    Default Re: Buyers left with big bills when home inspectors miss defects

    B.C. couple 'tricked' into buying unlivable house
    Realtor and inspector failed to flag mould, damaged floors and dangerous wiring

    B.C. couple 'tricked' into buying unlivable house - British Columbia - CBC News


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    Default Re: Buyers left with big bills when home inspectors miss defects

    Quote Originally Posted by Raymond Wand View Post
    B.C. couple 'tricked' into buying unlivable house
    Realtor and inspector failed to flag mould, damaged floors and dangerous wiring

    B.C. couple 'tricked' into buying unlivable house - British Columbia - CBC News
    That's an interesting inspection report. He certainly found some problems, but how in the hell did he miss some of the things in the video?

    He marked "N/A" for the attic. From the video, it appears that a previous owner made a bedroom or two out of the attic area. Those build outs can have ventilation and other problems that should always trigger a closer look.

    And then, he failed to recommend a sewer scope, which is advisable on any pre 1983 house and not a bad idea on newer ones even though plastic plumbing has far fewer problems.

    So, were these issues masterly hidden by the seller, is the inspector incompetent, or stupid enough to ignore these issues to help out the agent, which leaves us asking similar questions of the agent. Occasionally, I'm asked by a client about my fiduciary when referred by an agent. I tell them that no agent refers enough business toward me, that lying about an inspection would ever be worth it.

    On the surface, this is one of the most egregious cases of incompetence, malfeasance or worse that I've seen, by an inspector and possibly the agent.

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    Default Re: Buyers left with big bills when home inspectors miss defects

    And suprise, check box inspection

    ' correct a wise man and you gain a friend... correct a fool and he'll bloody your nose'.

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    Default Re: Buyers left with big bills when home inspectors miss defects

    Quote Originally Posted by Rick Cantrell View Post
    And suprise, check box inspection
    Unlike many here, I don't see the problem being a checkbox report.....I see the problem with the inspector. The inspector could have easily mentioned all of the problems on his report.

    Since, most inspectors, these days, use software generated reports, most of the consumer complaints that I've seen, involve inspectors using illustrated reports, but strangely, I never see anyone say, "and surprise, another software generated inspection report".

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    Default Re: Buyers left with big bills when home inspectors miss defects

    Lon,

    Good points.

    Report was not utilized to full extent, not signed by client, sections not complete, additional comment sections not utilized. Plus client was not in attendance and report indicates there was no sales agent present, and house was vacant at inspection time.

    Being familiar with Canadian case law I cannot recall a case where the courts found inspection report layout or type as inferior, but have found confusion with terms used, such as 'functional' and other confusing terms.

    Licenced or non licenced jurisdictions or association affiliation seem to make much difference in the scheme of things.


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    Default Re: Buyers left with big bills when home inspectors miss defects

    Quote Originally Posted by Lon Henderson View Post
    Unlike many here, I don't see the problem being a checkbox report.....I see the problem with the inspector. The inspector could have easily mentioned all of the problems on his report.

    Since, most inspectors, these days, use software generated reports, most of the consumer complaints that I've seen, involve inspectors using illustrated reports, but strangely, I never see anyone say, "and surprise, another software generated inspection report".
    Lon, you are right, I did not express myself as clearly as I should have.
    When I said check box report, I was actually thinking about there being no narrative.
    Inspectors using a checkbox may in fact be very good inspectors.
    But, often an inspector using a check box without narrative does not give enough information to be useful much less understood by the readers.
    Since few check box reports include room for narrative inspectors that use them do not include a sufficient narrative to accurately describe the defects. Now were back to inspectors who use check box reports are (mostly) those that do not use narrative in the report. Without a narrative the reader is less likely to understand the report. If the reader does not understand the report, there is a greater probability of dissatisfaction latter on. An inspector that does not understand this continues to use the check box report.
    Hence my comment " And surprise, a check box inspection".

    ' correct a wise man and you gain a friend... correct a fool and he'll bloody your nose'.

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    Default Re: Buyers left with big bills when home inspectors miss defects

    And I'll make it clear that I think the narrative nature of software generated illustrated reports is superior to any check box format. The buyers should have insisted on an illustrated report, particularly since they hadn't even seen the home, but that's hindsight, and I don't assign any blame to them. They were just listening to the advice of people that should have been trustworthy.

    It's a lesson for anyone buying a home sight unseen.....DON'T DO THAT!!

    Many years ago, I had a client buying a house sight unseen. For no extra charge, I shot a narrated walk through video of the entire house. In one of those "duh" moments, I turned the camera sideways for the narrow bathrooms to get a better picture. The buyers thought it was hilarious that they had turn their heads sideways to watch the bathroom video. But they were very appreciative of the video and on a side note, it covered my rear, too.

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    Default Re: Buyers left with big bills when home inspectors miss defects

    Does anyone think that this case and the appearance of collusion has anything to do with the fact it was in Canada ?

    Granted the US is not immune to devious sellers, bad inspectors, bad real estate agents and those that lie, steal and cheat. Not to mention gullible, uninformed buyers. Most states in the US are/have made some attempt to rein in the real estate world and it seams to be ahead of Canada. The question of liability for their actions may be the real underlying issue. Sadly it seems that a segement of the population will only act in an ethical, responsible and honest manor if there is a big stick involved. Putting the fear of actual jail time along with fines and restitution for fraudulent activities may be the only way for many to exercise an ethical approach to their business and the personal actions. Real accountability may be the only solution.


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    Default Re: Buyers left with big bills when home inspectors miss defects

    Collusion can happen anywhere, its by no means isolated to Canada.

    There are civil damages which can be sought by aggrieved parties.

    Also in Ontario we have RECO (Realestate Council of Ontario) which disciplines sales agents and publishes the outcome of the hearings.


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    Default Re: Buyers left with big bills when home inspectors miss defects

    Raymond,
    Agree by no means isolated to Canada. The thought was due to the recent push for licensing for HI and no clear understanding of the Real Estate Lic structure and oversight of the industry. The case in the OP seems rather egregious for what was presented so far. Making me think that unless the agent and the HI are total idiots there must be a feeling that they had little exposure (legal liability with real consequences) in the transaction.


  52. #52
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    Default Re: Buyers left with big bills when home inspectors miss defects

    I don't see this as a "Canadian thing". In my 25 years associated with the real estate biz, I have seen this kind of thing several times and heard of more........all right here in the good ol' US of A. Laws are usually reactionary and certainly the Colorado real estate contracts and laws are the result of legal actions here and elsewhere.

    And I wouldn't under estimate the stupidity of people. Of course, we only have one side of the case so far, and we may learn that the agent and HI don't have the blame being ascribed to them by the press and plaintiff...........but right now, they sure look guilty as charged.

    I am not big on regulation. Some regulation usually makes sense, but what we usually see is a regulation grow into a monster. You simply can't regulate society to a Utopian world, but many continue to try with the argument that "we have to do something and even if it only saves one person, then it's worth it". Needless to say, I don't subscribe to that philosophy.

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    Default Re: Buyers left with big bills when home inspectors miss defects

    so whats with the 45 tax he charged in his fee--you tax inspections in canada

    cvf


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    Default Re: Buyers left with big bills when home inspectors miss defects

    Yes a tax called Harmonized Sales Tax (HST) Provincial retail sales tax plus Federal tax combined its an additional 13% on services and most goods sold.


  55. #55
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    Default Re: Buyers left with big bills when home inspectors miss defects

    Quote Originally Posted by Raymond Wand View Post
    Yes a tax called Harmonized Sales Tax (HST) Provincial retail sales tax plus Federal tax combined its an additional 13% on services and most goods sold.
    You guys have a lot social programs that have to be financed some way. But, what a great name that HST has.......gives you a warm "it won't hurt a bit" feeling before they rip it out of you.

    "Tax the rich, feed the poor
    Till there are no rich no more"
    Ten Years After

    Not that it's much better here. Hell, with the way things are going here, we'll leave you guys in the dust with taxes. (Obviously, I feel about taxes and regulation about the same, a little is necessary, but too much kills incentive and growth) A prof in college told me that water is great unless you get too much and drown.

    I'll end my off topic rant here.........

    If you ever hear the outcome of this lawsuit, let us know.

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    Default Re: Buyers left with big bills when home inspectors miss defects

    I had a brief discussion with a realtor today about this situation. She was telling me what realtors usually do is place a site visit condition in the purchase contract. I'd never heard of that type of condition. I wonder if that occurred in this situation. By waiving the condition, you take your chances.
    I wonder if the home inspector knew the buyer had never seen the place. I did a job
    a few months ago and only found out later that the buyer had not seen the place.


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    Default Re: Buyers left with big bills when home inspectors miss defects

    When regulation came to B.C. did it require that every single practicing inspector pass the same proctored exam or were there inspectors "grandfathered" without testing?

    Licensing can't protect people from incompetent inspectors unless it is designed to identify incompetents and weed them out from the outset. Licensing can't protect people from unethical inspectors that have no intention of doing a good job. Nor can it protect people from lazy inspectors that are competent but don't bother to look very hard because they are too interested in getting done quickly and getting on to the next job.

    An E & O requirement is a dragon without teeth if the inspector is incompetent and the regulating body hasn't got a means to identify incompetent inspectors and the teeth to either force them out of the profession or go back for more training to improve their competency. When I got into this gig seventeen years ago I was told by folks in the business that someone had done a study that showed that 1 out of every 100 clients will sue you. They used that to justify E & O; but if that's correct then adding E & O if you are incompetent must mean that there's a good chance you have the potential to hurt about 99 different customers before one of them finally gets mad enough to sue you and snatch a knot in your butt. 99? That's a huge number and a new guy can be out there for a year or two before reaching that number. Why not stop him up front by making him/her prove competency instead of requiring E & O?

    Here in Washington, our licensing laws and rules are designed to ensure that every single inspector must prove minimal competency before that inspector is issued a license. The rules don't guaranty that the inspector is trained to the highest level of competency on the planet - only the minimum needed to perform an adequate inspection - kind of like the way your doctor was trained to provide the bare minimum level of medical care before he or she was issued an M.D.

    Requiring an inspector join a club that has a code of ethics leaves the regulating body toothless because the club has no way to discipline the inspector - they can't prohibit the inspector from practicing. They can't fine the inspector. They can't issue an injunction to shut the inspector down. Our laws can't guaranty an inspector is an honest/ethical person but they do codify a code of ethics that prohibits certain behaviors that are emblematic of dishonest/unethical inspectors and by codifying the code of ethics into law the regulating body has the teeth it needs to force inspectors accused of unethical behavior to clean up their act or get out of the business.

    The bottom line is that ensuring every inspector is minimally competent does more to protect consumers than all the rules requiring inspectors to be members of a club (OAHI, CAHPI, ASHI, iNACHI, NAHI etc.) or those requiring them to have E & O. When they initiated regulation, if B.C. didn't ensure every inspector was competent before issuing that inspector a license they are just spinning their wheels and they need to go back to the drawing board.

    ONE TEAM - ONE FIGHT!!!

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    Default Re: Buyers left with big bills when home inspectors miss defects

    Two associations have internal discipline processes. Whether or not they are effectual is questionable because there is no outside oversight by an independent body.

    I know that one of those associations has the power to remove from membership the inspector or send him/her for remedial classes or even a fine up to $1000 or some other penalty within the provisions of the bylaw.


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    Default Re: Buyers left with big bills when home inspectors miss defects

    Naturally, Mr. Hunter doesn't like it when they settle.
    He won't get to collect those pudgy little witness fees.
    I wonder if he ever works the other side of the case.


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