Pre-Inspection Agreement for mediator

[Duane Nelson]

I received a call last week from a builder who wants me to do a partial inspection on a $850,000 home he built. Owners are refusing to pay $100,000 + due to a list of issues. I am looking for an agreement that allows me to focus on just the items on the list. Of course lawyers are involved, so it has to be bulletproof.

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[Jerry Peck]

I received a call last week from a builder who wants me to do a partial inspection on a $850,000 home he built. Owners are refusing to pay $100,000 + due to a list of issues. I am looking for an agreement that allows me to focus on just the items on the list. Of course lawyers are involved, so it has to be bulletproof.

Before you consider an agreement for that work, you need to arrive at a standard for which that work (your inspection) can and will be judged.

The builder will likely agree to a 'code based' standard, the buyer likely will not.

The buyer will likely agree to a 'plans and specifications' based standard, the builder likely will not.

In the 'code based' standard, the buyer is left accepting "minimum" work for what they paid handsomely for; whereas with the 'plans and specifications' based standard will hold the builder to every last detail in their drawings, specifications, contract, and change orders, and the builder, intentionally or unintentionally, likely did not even come close to those documents.

Nonetheless, though, your first step is to adopt a standard to which YOU feel comfortable inspecting to and then get agreement between the two parties that is the standard you will use for the inspection, and that they agree to the outcome of your report - whichever way the chips fall.

Then, and only then, spend time trying to come up with a contract to cover yourself (which should actually be easier than you think).

[Mike Kleisch]

How to make this short??? Not sure if it will work in your situation, but had a similar issue where the builder and buyer were at odds. I met both lawyers at the home and they had an agreed upon list of items and we went through the house looking at what was wrong or right about each item, and only the items on the list. They would both ask why I thought it was one way or the other and we all made notes. I remember when one of the lawyers started asking about something, the other one jumped in saying it was not on the list...

I was notified by the buyers lawyer that I might be called in to testify, but a week before the court date a settlement was reached.

No agreement or anything, just the list and my opinion on the items.

[Duane Nelson]

Good points, Jerry. Builder talked about seeing if he followed acceptable practices. Seeing if it was built to plans, specs and change orders would be my goal.

Mike, thanks for making it sound easy

[Garry Sorrells]

The "acceptable practice" concept is like saying "in a workman like manor" which is to say it looks like crap but it works. Like you have seen in this Forum many times members will try to use general definitions of words to argue their points. Make sure that the word definitions are agreed on also. Or you will be needing to include it in you opinion. Especially with dueling lawyers.

[Mitchell Meeks]

It would be interesting to hear what exactly the issues are. Is the buyer just trying to get something cheap or for free or even trying to get out of the contract? Or are their legitimate issues?

[Bill Wieczorek]

I think I'd consider letting someone else do this one. I haven't walked away from many inspections but when I hear the word conflict I immediately think about being in court at some point. No Thanks, is it really worth the few hundred bucks.? I don't think so.

[Larry Morrison]

I agree with Bill, I think I would pass on this...you already have a party (right or wrong) that is complaining. With this type of liability you are going to be working harder than the lawyers involved and if it were me I would charge accordingly $200-$500/hr. And also make sure if this is continued in court you get paid for that time also.

As far as an agreement, I'm sure the lawyers will need to be involved or will be. I'd let them write it up and then just make sure you are in no way liable for expressing your opinion as a mediator. Many times mediation is not really binding anyway but is a way for both (smart) parties to save a lot of bucks that is just going to go to the lawyers if it goes to court, and decided by a judge that knows nothing of building related issues.

[Allen Johnson]

Correct me if I'm wrong, but if you are hired by the builder, the builder is your client, not the buyers. I believe that might help you determine which route you will want to take and if you were to take on the job or not.

[Garry Sorrells]

Duane,
You may want to add a clause that provides a billable time for anything related post inspection. Like a lawyer who starts the clock running the moment he picks up the phone. Builder agrees to pay no mater who calls you regarding the inspection.

[Duane Nelson]

Still waiting to hear from the lawyer who is supposed to get this scheduled for Thursday. We are on day two of a three day blizzard, so that may explain the delay. I really appreciate all the advise - Thanks alot.

[BridgeMan]

Duane,

If you plan on trying to come across as reasonably sharp in front of opposing lawyers, you really need to brush up on the difference between "advise" and "advice." Two different words, having different meanings.

[Benjamin Thompson]

Run Forrest, Run!

[Garry Sorrells]

Duane,

If you plan on trying to come across as reasonably sharp in front of opposing lawyers, you really need to brush up on the difference between "advise" and "advice." Two different words, having different meanings.

The former is predicated on the latter isn't it. But a good point. Here he will receive both. Yet he will only be giving the latter.

[Duane Nelson]

Update: Spoke to builders attorney today. I laid out my terms in line with Mike Kleisch's scenario. Homeowners turned that down and counter-offered with their "inspector/building expert guy" and an independent third party videographer. I agreed to that, so we'll see.

[Nolan Kienitz]

Update: Spoke to builders attorney today. I laid out my terms in line with Mike Kleisch's scenario. Homeowners turned that down and counter-offered with their "inspector/building expert guy" and an independent third party videographer. I agreed to that, so we'll see.

Duane,

As a "fellow Montanan" (albeit relocated to Texas) ... do the "right thing" as all of us were taught when growing up in that beautiful state.

Be honest, straight-forward and stand strong!!!

BTW - Be sure you keep the snow up North of the Mason-Dixon line !!!!!!!