House Detective

The House Detective:  by Barry Stone, Certified Home Inspector

Dear Barry: We bought our home about four months ago, and now have a big, undisclosed problem. The house is very old and was completely renovated; not by the person who sold us the property, but two owners previous to them. Our Realtor advised us to check for permits at the city hall, which we did. The city showed us copies of permits for the electrical, plumbing, and mechanical work. But we did not notice the absence of signatures on the permit records. We didn’t know that people could apply for permits and never call for inspections. Our second mistake was buying the property without hiring a home inspector. We’d like to blame someone for this mess, but I suppose the lesson here is “buyer beware”. What should we do to get all of this straightened out?  Alison

Dear Alison: Some home inspectors routinely advise buyers to verify the sign-off on building permits. This is because many people have taken out permits for additions, renovations, remodels, and even new construction, without ever calling for an inspection. Municipal building departments don’t check up on every property that has an outstanding permit because many permits are issued without work ever being done. This makes covert work, without inspections or signoffs, an easy sleight of hand. Unfortunately, the victims are the unsuspecting buyers who are easily fooled by the display of an unsigned permit.

At this point, you need to know what is right or wrong with the work that was done. A qualified home inspector can help you find those answers. This, of course, should have been done before you purchased the property. Unfortunately, too many buyers find reasons not to hire a home inspector.

After you review the findings of the home inspection, arrange for the building department to inspect and approve the renovations. But be prepared for anything. This process could be quick and easy, or it could be complicated and expensive, depending on the style and approach of the municipal inspector. For example, the inspector could order you to remove drywall to expose the piping and wiring within the walls. Hopefully, the corrective work, if any, will not be too costly or involved.

After the corrections are completed and signed off, you’ll know that the renovations are safe and in compliance with code. When you eventually sell the property, you can do so without fear of undisclosed defects.

The House Detective:  by Barry Stone, Certified Home Inspector

Dear Barry: I am the broker of a large real estate company. In my area, most home inspectors use computerized reports, with photos of the defects they disclose. Very few still use the old fashioned, hand-written forms, and I seldom give my business to those backward dinosaurs. One of those technophobes is the most experienced home inspector in my area. He usually finds defects that are missed by other home inspectors. In fact, he even finds problems that are missed by the termite inspectors. But I can’t stand his lousy 1990 carbon copy reports. They’re hard to read and harder to email. So I never refer this Neanderthal to my clients. But when other agents refer him, his reports make me so mad I could pull out my hair. What is it that keeps these closed-minded idiots from getting with today’s high tech program?  Yuli

Dear Yuli: Sit down and cool off. Businesses today are in technological transition, including home inspection and real estate companies. Most home inspectors have made the change to electronic reporting, but a few remain stuck in their old ways. Some are part-time inspectors, without a major commitment to the business. Others are comfortable in their routines and have little interest in state-of-the-art innovations. And there are some professionals who recognize the need to modernize but have been too busy inspecting homes to invest in change.

Old style reports are not as user-friendly as the new electronic versions that include photographs of defects. On the other hand, not all computer reports are as easy to read as they ought to be.  In some reports, the defect disclosures are obscured by paragraphs of “boiler plate” verbiage. In others, the disclosures are so vague that the defects cannot be readily understood. But all of these issues are eclipsed by the essential purpose of home inspection: to disclose property defects.

You admit that the “Neanderthal”, “dinosaur”, “technophobe”, “idiot” who does not get your business is the most thorough home inspector available; that he finds problems that other home inspectors miss. This means that the “high tech” reports that your clients receive from other home inspectors do not provide complete disclosure of all significant defects. It means that you prefer those incomplete reports to the out-dated, carbon copy reports that contain more actual disclosures. The question, therefore, has shifted. Instead of old report forms vs. new electronic reports, the issue has become partial disclosure vs. full disclosure of property defects. In other words, form vs. substance.

If this is the choice, which do you suppose is more important to your home-buying clients? Would they prefer full disclosure or fancy disclosure? And what about your liability as a broker? How would you defend yourself if sued for incomplete disclosure? Would you tell the jury that you avoid thorough home inspectors who don’t print fancy reports? That would hardly invite a favorable verdict.

So here is the bottom line: Home inspectors who take their business seriously should find a comprehensive electronic report system to maintain viability in the marketplace. Meanwhile, Realtors should recommend the most thorough home inspectors available, regardless of the style of reports they generate. In either business, it’s all about representing the best interests of clients, while limiting liability.

The House Detective:? by Barry Stone, Certified Home Inspector

Dear Barry: When we bought our home, the agent was selling it for his mother, and they told us that it was a maintenance-free home, in perfect condition. That was five years ago, and now the undisclosed problems have surfaced. First, we began to have septic problems, but no one could find the access to the septic tank. According to our neighbors, the garage was built over the tank. Another problem was lack of access to the crawlspace beneath the house. The seller had installed a forced air heating system, and the new air ducts blocked the access opening on the side of the building. Our home inspector pointed this out before we bought the property, but nothing was done about it at the time. Well last week, we made a new access hole and got a very unpleasant surprise. The crawlspace is filled with black, smelly, stagnant water from the laundry drain, and mold is growing on the underside of the floor. The seller simply ran a drain hose under the building and never told anyone. After this many years, do we have any recourse?? Leslie

Dear Leslie: If the agent was representing you, as well as his mother, that was not a good arrangement. You should have had your own agent to represent your interests. A good agent, working on your behalf, would have negotiated to have the seller provide a septic inspection report. The septic inspector would have found the septic access or would have discovered that the system was not accessible. In that case, an access would have been created to enable inspection and servicing of the system. If other septic repairs had been needed, that could have been negotiated before you bought the property.

If access to the crawlspace was obstructed, your home inspector should have recommended that access be provided before the close of escrow. If that had been done, the faulty laundry drain, the excessive moisture condition, and possibly the mold would have been discovered.

If these problems had come to light sooner, you might have held the seller, the agent, and the home inspector liable for faulty disclosure. After five years, you may no longer have recourse. However, you should check with a real estate attorney for clarification on that point.

The House Detective:? by Barry Stone, Certified Home Inspector

Dear Barry: I am a Realtor and recently closed escrow on a bank-owned property. The bank insisted on an “as is” sale, which is customary with foreclosed homes. My buyers hired a home inspector but decided to forego a termite inspection. After moving in, they found termite damage in the kitchen and dining room. We’ve also learned that the listing agent knew about this damage but withheld disclosure because it was an “as-is” deal and because the seller (the bank) was not required to disclose defects. Do you think my buyers have recourse?? Karen

Dear Karen: People often misconstrue the term “as is” to mean a release from the requirements of real estate disclosure laws. In the case of lenders who foreclose on delinquent mortgages, there is, in fact, an exclusion from the requirement to disclose. But this exclusion does not excuse Realtors who withhold disclosure of known defects. The requirement to disclose all known defects is an ethical and legal imperative for all real estate agents. Withholding knowledge of a defect, such as termite damage, is not acceptable for an agent, even when the seller of the property is a bank.

In the situation at hand, the listing agent should pay to repair the undisclosed damages. If the agent does not accept that responsibility, the matter should be reported to the state agency that licenses real estate professionals. The complaint, however, should be filed by the buyers, not by another agent.