Lawsuits

[Ron Homolka]

How many of you have been sued? How many carry insurance?

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[Nolan Kienitz]

That could be a loaded question as one never knows what tomorrow brings.

I've never been sued and I carry all kinds of insurance.

[Ted Menelly]

Hey Ron, how many traffic tickets have you gotten? How often do you beat your wife? What is your medical history?

[Ron Homolka]

Thanks for the answers, I've recently stopped beating my wife, but anyway I was just curious about lawsuits against home inspectors in general, not trying to pry into anyone's private life. I'm contemplating going into this business in my area, and was wondering if this is common to this business, and what can you do to protect yourself, through a iron clad contract, insurance, work practices, etc. Any other thoughts?

[Matt Fellman]

Been to court twice. Got pulled in with the agents, the broker, and the appraiser.
Agent paid dearly though for misrepresentation. Everyone else walked.

Still paid out 10K+ in attorney fees. Going to court is going to cost you regardless. We tried to countersue for attorney fees, but it didn't happen.

If you go to court and you will if your in this business, its only a matter of time you best hope you have insurance. Its a numbers game.

rick

Similar experience here... this whole idea of just suing everyone near the house really sucks but is the norm these days. People don't even have to be damaged in any way to absoultely screw you in legal fees, time and mental anquish.

It doesn't happen often but often enough to keep you on your toes.

[Jack Feldmann]

Was sued several years ago by someone that bought a house 2.5 years after I inspected it (for someone else). Got thrown out, but still paid a bunch to an atty.

I'm required to have E&O in TN. I carried it even before I was required to.
I have been involved with maybe 7 or 8 lawsuits where another inspector is being sued, and their atty hires me to try to defend them, and in a couple cases it was the atty suing them that hired me.

While the contract is what seems to be one of the most important parts, I don't think any are ironclad.

Where most of the cases come down to are: 1. the contract, 2. Standards of Practice, 3. Standard of care in the area, and 4. the report.

[Richard Stanley]

If you do a good job, you probably won't need to worry about 1 thru 4.

[Nolan Kienitz]

Was threatened once by a "seller" ... ~ 6 weeks after home sold (yes, my client purchased, closed, moved in).

Seller was absolute upset as I did not restore one of three A/C T-Stats to "precisely" a specific temperature that controlled a portion of the master suite. It caused him and his wife undue stress, trauma, health conditions and many other things.

This guy was serious and he was bitching about an ~ 2-degree setting on his "analog" T-Stat.

Mind you the house sold and he was now somewhere else.

He kept harping about suing and I gave him the TREC attorney's phone number, e-mail and where he could get the complaint form and wished him well. I continued the conversation that if he chose to do such (after I AGAIN confirmed that he had sold the house and moved) that my attorney would be in touch with him to file a lawsuit for leaving several items in an unsafe accessible condition that could have caused me serious harm or death. Items included a "very broken" attic access ladder and very unsafe clearance to his SEP. Of course I had images of all.

Seems like he quickly decided that the +/- 2-degrees on his "formerly owned" T-Stat was not a big issue any more.

You know ... they walk among us.

[Ted Menelly]

Was threatened once by a "seller" ... ~ 6 weeks after home sold (yes, my client purchased, closed, moved in).

Seller was absolute upset as I did not restore one of three A/C T-Stats to "precisely" a specific temperature that controlled a portion of the master suite. It caused him and his wife undue stress, trauma, health conditions and many other things.

This guy was serious and he was bitching about an ~ 2-degree setting on his "analog" T-Stat.

Mind you the house sold and he was now somewhere else.

He kept harping about suing and I gave him the TREC attorney's phone number, e-mail and where he could get the complaint form and wished him well. I continued the conversation that if he chose to do such (after I AGAIN confirmed that he had sold the house and moved) that my attorney would be in touch with him to file a lawsuit for leaving several items in an unsafe accessible condition that could have caused me serious harm or death. Items included a "very broken" attic access ladder and very unsafe clearance to his SEP. Of course I had images of all.

Seems like he quickly decided that the +/- 2-degrees on his "formerly owned" T-Stat was not a big issue any more.

You know ... they walk among us.

I get those strange calls from time to time. One recent seller complained I had left the blinds all in a mess (most were broken and I opened them and closed them to check the windows) I did not measure where they sat on the sill before I opened them and then closed them.

I left attic insulation all over the home ( I actually swept what did get onto the hall tile up and threw it in the trash in the garage bin)

I left wet foot print throughout the home (I entered the home, it was raining, put a towel down, stomped and wiped my feet and even checked before I left and wiped a couple of minor spots just beyond the towel)

The zero lot line home was empty. Every window needed replacing. The shingles needed to be replaced. Multiple electric items. A pond in the side and back yard due to know drainage. The home inside and out was a mess and needed a rehab.

He wanted to be paid for his time for picking up invisible insulation. Wiping up invisible wet and muddy foot prints and rearranging the blinds.

Everything he mentioned I made personal note to clean wipe and adjust to where I found the home before I left.

Get paid....right!

[Ron Bibler]

Thanks for the answers, I've recently stopped beating my wife, but anyway I was just curious about lawsuits against home inspectors in general, not trying to pry into anyone's private life. I'm contemplating going into this business in my area, and was wondering if this is common to this business, and what can you do to protect yourself, through a iron clad contract, insurance, work practices, etc. Any other thoughts?

Move all you assets into your wife name. Get a good attorney. Do a good job and have some fun. any thing can happen in life.

But like Arron stated The insurance is like a bulls eye on you back. After you do you inspection and you get your check Let the buyer and seller known you don't have any insurance L.O.L.

Best

Ron

[Kevin Luce]

Over the years I've been sued 4 times. Twice I gave it to my insurance company and twice I gave it to my local lawyer (informed my insurance company). The two times I gave it to my local lawyer, the things the buyers were suing about were silly. At $245 an hour (on the higher side of charges around here) he was able to get rid of the cases for less than $1000 for each case. The two I gave to my insurance company, the first one the insurance company settled and the second one is still going on 3 1/2 years later even though nothing has happened for a little over 2 years now.

Three out the four times I was one of 3 or 4 companies + sellers + buyer's Realtor that was getting sued.

Side note: It seems that lawyers cost more if using them through the insurance company. I live in the second largest county in Indiana with a lot of lawyers practicing here plus Chicago which is only 45 minutes away. Yet the insurance company will use a lawyer in Indianapolis which is around 3 hours from here. So just to show up for court is going to take the entire day to drive, do their job and drive back.

Personally, I think we all need to carry E&O insurance or have enough money set aside so we can be financially responsible for that day we truly do miss something .

Have a good day all.

[Frank Bombardiere]

I read a stat once that an HI gets sued about once for every 750 inspections. I don't know if that is accurate or not. I have been sued once in about 3500 inspections and never went to court. Cost me about $2500 to give the buyer $500 for settlement. I think the key is to try to be respectful with the people that end up complaining about something and try to make them understand that you do care and are not just trying to blow them off. However, there are some crazies out there that you end up telling to stick it where the sun don't shine and let the chips fall where they may.

[Kevin Luce]

Getting sued once every 750 inspections (I would think) varies from place to place. When I first moved up to Northwest Indiana, my E&O insurance was cheap. One reason (I was told) the insurance has become expensive is that this area is now labeled as a higher risk. I don't know if it's because the number of people getting home inspections is much greater, the type of people that have moved into this area (a lot of Illinois/Chicago people) are more likely to sue, or if it's the fault of the home inspectors. Yet when I lived in Kentucky, the chances of getting sued was much further from our thoughts.

So while that 1/750 number might be somewhat correct overall, I would think your location by itself could play a large role in determine the number of lawsuits per the total number of home inspections.

I stopped counting the total number of home inspection I've done a long time ago. But if I figure that if I've average one home inspection per day every day in the year for the number of years I've been doing home inspections here in Indiana, that 750 number would be close.

[Ron Bibler]

Getting sued once every 750 inspections (I would think) varies from place to place. When I first moved up to Northwest Indiana, my E&O insurance was cheap. One reason (I was told) the insurance has become expensive is that this area is now labeled as a higher risk. I don't know if it's because the number of people getting home inspections is much greater, the type of people that have moved into this area (a lot of Illinois/Chicago people) are more likely to sue, or if it's the fault of the home inspectors. Yet when I lived in Kentucky, the chances of getting sued was much further from our thoughts.

So while that 1/750 number might be somewhat correct overall, I would think your location by itself could play a large role in determine the number of lawsuits per the total number of home inspections.

I stopped counting the total number of home inspection I've done a long time ago. But if I figure that if I've average one home inspection per day every day in the year for the number of years I've been doing home inspections here in Indiana, that 750 number would be close.

Another actor is the economy. I got a call from a guy last night asking for information on suing the prior owner/Contractor/flipper of his new home.

He want to proves that he covered up a leak in the wall. His window now leaks.

The guy was making me sick that way he was talking...

Best

Ron

[Matt Fellman]

In my experience the 1/750 is a bit high.... I'd say you get a complaint (one you can't get rid of over the phone or with a quick trip out) every 750 but a fullblown lawsuit doesn't come around very often. Our company (+/- 4 guys) has had 3 in the last 10 years.

I'd bet the 750 number came from a guy selling insurance

[Dan Harris]

In my experience the 1/750 is a bit high.... I'd say you get a complaint (one you can't get rid of over the phone or with a quick trip out) every 750 but a fullblown lawsuit doesn't come around very often. Our company (+/- 4 guys) has had 3 in the last 10 years.

I'd bet the 750 number came from a guy selling insurance

I would be interested to see if there are any stats for states the have HI licensing verses non- lic states.

[Raymond Wand]

I'd like to see some statistics from the insurers on what inspectors are being sued for and the outcomes. But given the secrecy of insurers to release such info its a given they will most certainly mitigate their losses at inspectors expense.

[Matt Fellman]

I'd like to see some statistics from the insurers on what inspectors are being sued for and the outcomes. But given the secrecy of insurers to release such info its a given they will most certainly mitigate their losses at inspectors expense.

I was at a NAHI conference years ago and the insurance guy had a big pie chart of what they paid out on. That alone probably shaped my focus in this career more than any other single event.

It was awhile ago but here's roughly what I remermber.....

Water intrusion and bugs were over 50%, Structural stuff was about 30% and everything else was the remaining 20%.

I've always found if amusing how much focus we all seem to put on plumbing/HVAC/electrical when it's really the least likely to cost you money.