Thread: Ontario court: Buyers, Realtor, Inspector all liable for house damage, not the seller

From today's Toronto Star:
The court’s ruling found that the inspector demonstrated competence and insight, but “failed to communicate adequately the concern for moisture penetration even though no visible signs of penetration were observed.”

The judge found that the real estate agent, took a “hands-off approach” with respect to the home inspection. “Had he read the report he . . . might well have concluded that the parging and driveway issue raised concerns.”

The agent induced the purchaser to rely on the home inspection and then “washed his hands of all responsibility to his client as to what use should be made of the inspector’s report. . . . He failed to advise the purchaser of the use to be made of the report . . . (and) fell below the standard of care by failing to review the report with his client before waiving the home inspection condition.”

The court found the inspector 50 per cent liable for the damages, and the agent 25 per cent liable. The buyer was also 25 per cent at fault because she did not read the report. The seller was not responsible at all.

Read more Aaron: Agent's responsibility doesn’t end with advice - thestar.com

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That's a tough one: how to report "predisposing conditions" to moisture problems in the absence of actual evidence of moisture intrusion... \

.... especially if "The buyer.. did not read the report."

Read the court report:
CanLII - 2011 ONSC 390 (CanLII)

BTW: Great site to search for Canadian "home inspector" court battles - CanLII

"Somehow the inspector is 50% responsible for a problem which wasn't evident at the time."

John
I disagree.
Mould, moisture, rot, etc were symptoms of a problem. The problem was evident to the inspector, I.E. parging, driveway.

However the inspector reported these as a condition he observed, instead of as reporting it as the problem it was.
It should have been reported as"
Condition, Result, Action

I don't really care if my Doctor tells me that I have high cholesterol. What I do care about are the results of having high cholesterol, and what I can do about it.

Originally Posted by Rick Cantrell

"Somehow the inspector is 50% responsible for a problem which wasn't evident at the time."

John
I disagree.
Mould, moisture, rot, etc were symptoms of a problem. The problem was evident to the inspector, I.E. parging, driveway.

However the inspector reported these as a condition he observed, instead of as reporting it as the problem it was.
It should have been reported as"
Condition, Result, Action

I don't really care if my Doctor tells me that I have high cholesterol. What I do care about are the results of having high cholesterol, and what I can do about it.

I believe article/sentences 55 to 58 of the judges findings basically indicate that the inspector failed at the contract agreement stage. This should be a wake up call regarding assuming that our standards protect us. - In this case evidently - NOT!

Unfortunately, the inspector failed to include in his summary of major defects that there was visible damage to the parging on the exterior wall at the driveway, and the driveway surface was missing an 18-inch swath of asphalt along the exterior wall of the house. These two factors indicated what may have been happening in the foundation wall below grade, and were highly relevant to the potential for moisture penetration.
The court’s ruling found that the inspector demonstrated competence and insight, but “failed to communicate adequately the concern for moisture penetration even though no visible signs of penetration were observed.”

This confirms my position NOT to include a summary. I want the client to read the whole report.

That said, the judge is screwy if this SUMMARY of the judge's opinion is correct. There is no way there was no evidence of a defects described (unless it was concealed) then suddenly it was there 4 months later.

On a balance of probabilities I find that the document which contained the written limitations was not presented for her reading and signature until after the inspection walk through.

I email the agreement with confirmation of the inspection appointment and ask the client to read, sign and return.

I find the check-list is a tool for completeness but a very inadequate method of communication to the client... The significance of the check marks which was somewhat consistently understood by those who commented (an engineer, a senior home inspector, and two real estate agents) has no necessary meaning to a client.

I find that the written report was sufficient to trigger response from an insightful purchaser but without the basic knowledge that the professionals all had and Glenda Halliwell did not have, it did not trigger a concern with her. And, she never read it. Rather, she relied on the oral communication.

Upon completion of the inspection, Mr. Lazarus took a similar hands-off approach. He did not read the report. Because of his long association with Mr. Edwards, he knew that the important stuff would be on the last two pages where critical major deficiencies were addressed. He therefore emphasized those matters with Ms. Chan and placed those conditions in the amendment he proposed.

Still want to provide summaries?

I agreee w/Jim.

I don't include a summary for the reasons he cites.
The Client paid for a report; he should read it at least three times, then get someone else to read it; then, read it again. Then call me/email with any questions.

Q - "Which items should I address?"
A - "All of them."

No summary - ever.

I still maintain the judge was screwy. It was my understanding that an oral contract could never overcome an existing written contract but here the judge threw out the written inspection agreement as if it never happened, threw out the written report as if it never happened and instead relied specifically on the oral report and oral understanding of what the client wanted even though there was no evidence of mold or moisture intrusion at the time of the inspection. I can only hope that judges in the US are smart enough to stick the the law on the books and the laws of physics. Seems like this guy is requiring a crystal ball be added to every home inspectors tool bag.

Originally Posted by Jim Luttrall

I still maintain the judge was screwy. It was my understanding that an oral contract could never overcome an existing written contract but here the judge threw out the written inspection agreement as if it never happened, threw out the written report as if it never happened and instead relied specifically on the oral report and oral understanding of what the client wanted even though there was no evidence of mold or moisture intrusion at the time of the inspection. I can only hope that judges in the US are smart enough to stick the the law on the books and the laws of physics. Seems like this guy is requiring a crystal ball be added to every home inspectors tool bag.

Thanks Jim. Now I do not have to make the same comments.

I seriously think the Inspector just bothered the judge somehow even if it was his stance or look on his face.

Originally Posted by Jim Luttrall

This confirms my position NOT to include a summary. I want the client to read the whole report.

Summaries make me real nervous for the same reasons. Around here attorneys only want to see the summary, the agents only want the summary and the clients follow their advice. Inspectors have a great deal of pressure put on them to comply. Basically, if you don't play nice they'll refer buyers to an inspector who will.

I agree that the judge was screwy and its sounds like all the defendants were trying to throw each other under the bus. Hopefully this guy has E+O for $1,000,000 because between discovery and trial he will have burned through at least half of that. In fact the defense should have just bought her house as it would have been the cheapest course of action but then they would get any lawyer fees :-))


//Rick

Originally Posted by Joseph Peake

I agreee w/Jim.

I don't include a summary for the reasons he cites.
The Client paid for a report; he should read it at least three times, then get someone else to read it; then, read it again. Then call me/email with any questions.

Q - "Which items should I address?"
A - "All of them."

No summary - ever.

In NC you are required to include a summary if you want to keep your license.


Per NCGS 143-151.58 effective October 1, 2009

(a1) Summary Page. - A written report provided under subsection (a) of this section for a prepurchase home inspection of three or more systems must include a summary page that contains the information required by this subsection. All other subject matters pertaining to the home inspection must appear in the body of the report. The summary page must contain the following statement:

“This summary page is not the entire report. The complete report may include additional information of interest or concern to you. It is strongly recommended that you promptly read the complete report. For information regarding the negotiability of any item in this report under the real estate purchase contract, contact your North Carolina real estate agent or an attorney.”

The summary page must describe any system or component of the home that does not function as intended, allowing for normal wear and tear that does not prevent the system or component from functioning as intended. The summary page must also describe any system or component that appears not to function as intended, based upon documented tangible evidence, and that requires either subsequent examination or further investigation by a specialist. The summary page may describe any system or component that poses a safety concern.

Let me guess, the realtors had a strong hand in writing the rules in your state, right?

Summaries perpetuate the laziness of the clients, realtors and lawyers who can't be bothered to read the entire report.
I have had Realtors request summaries but they just get the entire report.

Originally Posted by James Duffin

In NC you are required to include a summary if you want to keep your license.


Per NCGS 143-151.58 effective October 1, 2009

(a1) Summary Page. - A written report provided under subsection (a) of this section for a prepurchase home inspection of three or more systems must include a summary page that contains the information required by this subsection. All other subject matters pertaining to the home inspection must appear in the body of the report. The summary page must contain the following statement:

“This summary page is not the entire report. The complete report may include additional information of interest or concern to you. It is strongly recommended that you promptly read the complete report. For information regarding the negotiability of any item in this report under the real estate purchase contract, contact your North Carolina real estate agent or an attorney.”

The summary page must describe any system or component of the home that does not function as intended, allowing for normal wear and tear that does not prevent the system or component from functioning as intended. The summary page must also describe any system or component that appears not to function as intended, based upon documented tangible evidence, and that requires either subsequent examination or further investigation by a specialist. The summary page may describe any system or component that poses a safety concern.

If this judge's ruling were applied, you would be screwed using your state standards in the particular case at hand.
You have my sympathies!

Originally Posted by Jim Luttrall

If this judge's ruling were applied, you would be screwed using your state standards in the particular case at hand.
You have my sympathies!

Just out of curiosity why do you say that?

Interesting to note the complainant did not provide any medical evidence to suggest her allergies were the result of the moulds.

[40] In particular, I have not been told how mould activates allergies. The witnesses all described that they could not smell mould because of the heavy smell of incense permeating the residence because of the religious shrine that was actively used on the main floor of the house. Will smell have any effect whatsoever on the allergenic properties of mould? If areas of mould are cleaned regularly such that they are not apparent to the eye, will they yet trigger allergic reaction?
[41] I do not know and I was not given evidence to know.
[42] These unanswered questions predict my findings with respect to Mr. Mr. Tran, whether he knew or must have known that there were problems from water penetration in his basement.

Did the complainant actually have a disposition to mould or was she subject to chemcial sensitivities?

Apparently the findings of the court will be appealed.

Reasons for Decision on Costs

http://www.canlii.org/eliisa/highlig...1onsc1642.html

Originally Posted by James Duffin

Just out of curiosity why do you say that?

The judge specifically agreed that the inspector had noted the only contributing defects visible in his report but had failed to communicate that to the client by not putting it in the summary. The client relied on the summary and the oral report and DID NOT READ the report.

The way I read the statues you posted, you would be required to report in the exact same method as the inspector who lost that court case.

Originally Posted by Eric Barker

Summaries make me real nervous for the same reasons. Around here attorneys only want to see the summary, the agents only want the summary and the clients follow their advice. Inspectors have a great deal of pressure put on them to comply. Basically, if you don't play nice they'll refer buyers to an inspector who will.

Eric... Just take your report and stamp ( Summary Report on the front page and give that to the agent.

Problem solved

Best

Ron

Originally Posted by Eric Barker

Summaries make me real nervous for the same reasons. Around here attorneys only want to see the summary, the agents only want the summary and the clients follow their advice. Inspectors have a great deal of pressure put on them to comply. Basically, if you don't play nice they'll refer buyers to an inspector who will.

Even though I just picked up an excellent high volume Realtor ..... you have just helped prove my case that I always state. My case would make me lose this new Realtor but ...................... Realtors should be banned throughout the country from being able to refer any Home Inspector in anyway, including groups of inspectors or local or national home inspector associations or individuals. Their multi thousand dollar contract with this buyer from selling that 500,000.00 home at 3% is only a mere 15,000.00. Many Realtors out there no longer pay the office they work out of a percentage. They pay an office fee once a month.

I recently tried to get another Realtor to start referring me, very high volume, because she hears so much over the past 6 or 7 years about me since I moved here but she wants a summary and wants only the "big ticket items in the summary" Sorry, I do not do summaries. I want to be absolutely sure that the buyer reads everything in the report. Her answer was that I could just send her a summary and not the client "So I will know what to address to the client" My answer was to address the entire report. Her answer was that she did not have time for all that. Needless to say she is not referring me. Let's see. a 3 or 4 or 5 or 10,000.00, 15,000 or even a $20,000.00 deal in her pocket and she does not have time to go over a report with a client.

Who's decision should it be as to what goes into the summary if it were not the inspector? Wait, I know, the buyers? The one that is paying you? No, not even the buyer. Any concern found in the home should be in the summary. Not just the big ticket item. Not just the items that are broken now. If something is about to die and you know it will in a short time but at this moment it still has a heart beat then as far as most that want to be the decision makers are concerned "it is working now and does not need to be in a summary.


Hmmm. An HVAC system that is outdated badly but is still actually working doe s not need to be in a summary .... Bull. At the least a 7.000.00 change out for the entire system and it should not go in the summary? Bull.

I do not do summaries. I do not put what someone else feels I should in the summary (don't do them anyway). I do not allow anyone at all to have any influence as to what goes into my report. One time a Home Inspector referred me, maybe a year or so ago) I bit my tongue not trying do verbally lash them for trying to influence me I actually forgot the sprinklers and had to go back to do them. All I wanted to do was get out of there. The buyers were so brainwashed by the time they got to the inspection they actually thought I should have spent another couple hours with them ... after I was there for a couple hours before they arrived and still spent 2 hours with them. Between the Realtor and the clients it made me wish that public flogging should be re-instated. The Realtor told me straight out that she arrived before the clients to let me know what her inspector says and how he says it and how I should write particular things in the report and how not to. I mean after all : "I am here to make a sale, not lose a deal"

I operate in North Carolina and like James Duffin am required to include a summary. Every defect in my report no matter how small or inconsequential goes into the summary. I cut and paste the exact statements from the body to build the summary. No changes or differences between the summary and body text.

My summaries are often 5-8 pages long. If they ONLY read the summary of my report, they get everything. Whats left in the body is the silly required stuff that nobody cares about anyway. Photos are in the body only and not in the summary so it encourages them to read the body.

I cut/pasted this (read below) verbatim from my last contact (almost a year ago) with a local agent. His comments speak volumes. Thank goodness there are many agents who truly represent their clients - this character is not one of them.

Background - As a result of issues with a manufactured stone installation that were raised in our report, the agent had sent me a fax copy of an amateurish email of dubious origin from someone purporting to represent the manufacturer stating that the manufactured installation was correct.

I contacted the manufacturer and they performed a site visit and then sent me a letter listing deficiencies.

I forwarded to our mutual Client (Deidre) the manufacturer's letter.

Below is what I received from the agent:

"Please do not send Deidre anymore unfiltered NON requested information..!!!

Joe your job was DONE when you RECOMMENDED in your report a letter be secured.... NOT to take it upon yourself to schedule meetings and re-inspections and to re comment.

Your well payed job was DONE ...Now my hard work will go unrewarded .. unfortunately I am unable to continue recommending Affordable Inspection and Testing Group as you may be too thorough. If you ask a million people how to turn a knob one is bound to have a problem with it."

Originally Posted by Joseph Peake

"Your well payed job was DONE ...Now my hard work will go unrewarded .. unfortunately I am unable to continue recommending Affordable Inspection and Testing Group as you may be too thorough. If you ask a million people how to turn a knob one is bound to have a problem with it."

Joe,

Wear that as a badge of honor. I wonder if your client (the buyer) - who is also the agent's client - would say you were "too thorough".

You may also want to point out to the agent that it is "paid", not "payed".

Originally Posted by Joseph Peake

"Your well payed job was DONE "

Originally Posted by Joseph Peake

I cut/pasted this (read below) verbatim from my last contact (almost a year ago) with a local agent. His comments speak volumes. Thank goodness there are many agents who truly represent their clients - this character is not one of them.

Background - As a result of issues with a manufactured stone installation that were raised in our report, the agent had sent me a fax copy of an amateurish email of dubious origin from someone purporting to represent the manufacturer stating that the manufactured installation was correct.

I contacted the manufacturer and they performed a site visit and then sent me a letter listing deficiencies.

I forwarded to our mutual Client (Deidre) the manufacturer's letter.

Below is what I received from the agent:

"Please do not send Deidre anymore unfiltered NON requested information..!!!

Joe your job was DONE when you RECOMMENDED in your report a letter be secured.... NOT to take it upon yourself to schedule meetings and re-inspections and to re comment.

Your well payed job was DONE ...Now my hard work will go unrewarded .. unfortunately I am unable to continue recommending Affordable Inspection and Testing Group as you may be too thorough. If you ask a million people how to turn a knob one is bound to have a problem with it."

You are better off without that agent for sure! I bet their broker in charge would love to see that email! Some one would be looking for a new place to work...if they still had a RE license!

Originally Posted by Joseph Peake

I cut/pasted this (read below) verbatim from my last contact (almost a year ago) with a local agent. His comments speak volumes. Thank goodness there are many agents who truly represent their clients - this character is not one of them.

Background - As a result of issues with a manufactured stone installation that were raised in our report, the agent had sent me a fax copy of an amateurish email of dubious origin from someone purporting to represent the manufacturer stating that the manufactured installation was correct.

I contacted the manufacturer and they performed a site visit and then sent me a letter listing deficiencies.

I forwarded to our mutual Client (Deidre) the manufacturer's letter.

Below is what I received from the agent:

"Please do not send Deidre anymore unfiltered NON requested information..!!!

Joe your job was DONE when you RECOMMENDED in your report a letter be secured.... NOT to take it upon yourself to schedule meetings and re-inspections and to re comment.

Your well payed job was DONE ...Now my hard work will go unrewarded .. unfortunately I am unable to continue recommending Affordable Inspection and Testing Group as you may be too thorough. If you ask a million people how to turn a knob one is bound to have a problem with it."

Another fine example why ......... read my last post.

Absolutely ridiculous that everyone here can name Real Estate Agents, that is with an s, that at one time or another extended their bounds as Agent to trying to influence a home inspection outcome or a follow up to an inspection.

If everyone can name one, and there are thousands of inspectors Why are Realtors still allowed to give referrals for the home inspection? Because most inspectors get a tremendous amount of their income mostly from Realtor referrals and they are afraid of losing that and having to compete on their own marketing skills and or referrals from past clients. It is just too easy to get Realtor referrals. That in itself is the absolute biggest reason why Realtors should get out of the Inspection business altogether.

The worse part is that most if not all can name far, far, far more than one Realtor that has in some way shape or form tried to influence them in the past and will have the same happen to them in the future..

Originally Posted by Bruce Breedlove

Joe,

Wear that as a badge of honor. I wonder if your client (the buyer) - who is also the agent's client - would say you were "too thorough".

You may also want to point out to the agent that it is "paid", not "payed".

The "too thorough" language could eventually bring some business our direction if it were widely known.

I've been considering purchasing a billboard ad (in view of this agent's office) with some of his comments in quotes and advising potential clients that "we work only for them". Unfortunately, over the years, the management of this particular office has demonstrated that this mindset is their modus operandi. I remain confident that "the cream will rise to the top", and that "everyone eventually gets what's coming to them", but sometimes it takes many years for word to get around. There's little doubt that he'll wind up on the receiving end of a well deserved lawsuit for this type of behavior .... eventually.