You Can Win With Defensive Report Writing

In preparing for a presentation on insurance and claims, I read in a home inspection manual that the best way to prevent claims was to write good reports. Sounds simple?

Sometimes it is, as demonstrated by one of the finest examples of report writing I have seen. In this actual case, the home inspector was able to make a complaining client (an attorney from Nevada) JUST GO AWAY.

With the permission of Scott Kaylor, Pelican Property Inspections, Inc., I’m able to share with you the actual documents and the sequence of events.

Kaylor sent me three documents to review: the complaint letter, a copy of the inspection summary page, and his proposed response. First, I read the letter to see what was alleged, next the report and then the proposed response.

The following is the letter to the home inspector from the client, who is an attorney. It is slightly modified to fit the article and not disclose the client.

Document 1 — Demand Letter from Client

Legal Firm
Attorneys and Counselors at Law
January 24, 2003
Pelican Property Inspections
4567 Second Ave.
——-, FL

Re: 5678 Third Ave, —– FL

Gentlepersons,

In November 2002, I was informed that my home had three readily observable and non-disclosed problems. The only toilet was inoperable. The thermostat was inoperable. The roof had been purposely, but ineffectively, covered up by rocks so that the severe rot of the under roof and leakage of the roof into the second bedroom was occurring.

This was not a small leak. The leak was catastrophic in character and caused a large pool of water to accumulate in the second bedroom from one storm, the first storm after I took possession of the home.

The non-disclosure laws of Florida seem to be quite clear that observable problems are the responsibility of the inspector and disclosure is the responsibility of the seller.

These omissions cost me $10,550 for the roof, $380 for the thermostat and approximately $150 for the toilet, although I expect to get a rebate because of the low-flow conservation rebate from the county. I believe that I spent approximately $2,200 more than would be necessary just to replace the roof because I added a vulcanization element for future security.
Pelican Property Inspection’s lack of inspection to detect observable flaws and the Seller’s lack of disclosure cost me $9,230 not including telephone calls, engagement of experts to determine the cause of the leak, engineering review, etc.

This letter is a demand that the two parties responsible for my costs reimburse me within the next twenty days. I have had the roofing company prepare a report and take pictures of the condition of the property when they began the repairs. While I am fully prepared to engage an attorney, I would rather not. I understand that mistakes can be made and I see no need to involve contractors’ boards, better business bureau, etc., nor attorneys if we can settle this matter among the three of us.

Please feel free to contact my office in Anywhere, NV.

Very Truly Yours,

—————-

Document 2 — Summary of the Inspection Report

*SUMMARY/AREAS REQUIRING FURTHER EVALUATION*

IMPORTANT NOTE- PLEASE READ: The Summary page is provided to allow the reader a brief overview of the report. This page is not encompassing. Reading this page alone is not a substitute for reading the report in its entirety. The entire Inspection Report, including the ABC Standards of Practice, limitation, Scope of Inspection and Pre-Inspection Agreement must be carefully read to fully assess the findings of the inspection. This list is not intended to determine which items may need to be addressed per the contractual requirements of the sale of the property. Any areas of uncertainty regarding the contract should be clarified by consulting an attorney or real estate agent.

It is recommended that any deficiencies and the components/systems related to these deficiencies noted in the report be evaluated/inspected and repaired as needed by licensed contractors/professionals PRIOR TO THE CLOSE OF ESCROW. Further evaluation PRIOR to the close of escrow is recommended so a properly licensed professional can evaluate our concerns further and inspect the remainder of the system or component for additional concerns that mat be outside our area of expertise or the scope of our inspection. Please call our office for any clarifications or further questions.

ELECTRICAL: It is recommended the following issue(s) and related systems be further evaluated and addressed as needed by a Licensed Electrician.
(Author’s comment – I am not including the details as no complaint was made regarding the electrical system. There were several issues detailed by the inspector.)

ROOF: It is recommended the following issue(s) and the roof be further evaluated and addressed as needed by a Licensed Roofing Contractor.
The tar and gravel roof covering does not appear to be leaking but it is advancing in age. The following was observed:
a. Evidence of prior patching/repair.
b. Exposed areas of underlayment where the gravel has scoured and exposed the underlayment.
c. Deteriorated surface of the felt underlayment.

PLUMBING: It is recommended the following issue(s) and related systems be further evaluated and addressed as needed by a Licensed Plumbing Contractor.
The water runs continuously in the toilet tank.
(Author’s comment – I am not including the other issues, but there were several)

Document 3 — The Inspector’s Response

Pelican Property Inspections, Inc.
4567 Second Ave.
—–, FL
February 9, 2003

Re: 5678 Third Ave, —-FL
—— Esq.

I have received your letter dated 1/24/03-requesting compensation for repairs on the above-noted house. We are sorry to learn that you have spent $10,550 in repairs. You stated in your letter that you had to replace your roof covering, toilet and a HVAC thermostat.

A review of our files indicated that the inspection was performed on July 25, 2002. The report was mailed to your Realtor(r) in Anywhere, FL, and to you in Anywhere, NV. Your copy was mailed return receipt and confirmation was returned.

Your letter states that the “roof was covered up by rocks” in an effort to hide the leakage. I trust that the experts that you engaged informed you that this type of roof is a built-up tar and gravel roof and requires gravel/aggregate in order to function as designed. With that being said, please refer to the SUMMARY of the Home Inspection Report and refer to the roof section. Also, please refer to the two digital photos of the deterioration on the roof covering. We stated that the following issues should be further evaluated PRIOR to closing by a licensed roofing contractor:

• Evidence of patching and repair
• Exposed areas of underlayment where the gravel has scoured and exposed the underlayment
• Deteriorated surface of the felt underlayment

When you followed our advice and had the roof covering further evaluated prior to the close of escrow, what were the results?

Your letter states that the toilet is inoperable. Again, please refer to the SUMMARY of the Home Inspection Report and refer to the plumbing section. We state that the water runs continuously in the toilet. When you followed our advice and had this evaluated further prior to close of escrow by a licensed plumber, what were the results?

Your letter states that the thermostat is inoperable. Please refer to the HVAC section of the report. At the time of the inspection, the system responded to controls and functioned properly. Both the heat and the A/C systems were operated and produced conditioned air within acceptable parameters. Conditions in a home can and will change from day to day. A Home Inspection is not a warranty or guarantee. Please refer to the Inspection Agreement that you signed for details.

We regret that you have experienced concerns with your house. However, we are puzzled as to why our recommendations were ignored. If you had followed our recommendations, you could have avoided this situation.

In summary, your Home Inspection Report has no omissions regarding these issues. Quite to the contrary, we identified the issues as being deficient and requiring further evaluation prior to closing. As a result, we are not responsible for any of the repair costs that you incurred. We are confident in the thoroughness of our report and are fully prepared to defend ourselves against your accusations.

Sincerely,
Pelican Property Inspections

Key Defense Mechanisms

Sitting at my desk, reviewing the documents, I thought this is a slam dunk – we got her – there is no way she can pursue this, and of course she did not.

Over the years, home inspectors have improved their report writing and agreements-each time lawyers try another approach to counteract the improvements.
In this case, the inspector included all the current Key Defense Mechanisms (the “3 Ws”) in his report.

WHAT – the problem component – the roof

WHO – who should evaluate further – a licensed roofing contractor

WHEN – the time period by when the further evaluation should be completed – before close of escrow

Additionally, he recommended an evaluation of the ENTIRE SYSTEM in question.

There are those who say that real estate agents won’t use home inspectors who write this type of report. That’s not true in this case. This is a two-inspector firm that does approximately 1,000 inspections a year and has done so for years.

I know many home inspectors use a handwritten matrix-type report (as I did), and therefore cannot incorporate the “3 Ws” into the report itself. If the matrix report has a summary page, the following statement can be added at the top of it: “The following is a list of significant defects. I strongly recommend you have the appropriate licensed contractor further evaluate each defect and the entire system in question before close of escrow.”

Home inspectors who use a computerized report can easily include the “3 Ws.”

Two additional hints for preventing claims:

Whenever you have a system (for example, electrical) in which you’ve identified multiple problems, I suggest you recommend that a contractor evaluate the entire system. There’s sure to be one bad outlet you’ve missed.

Regarding re-inspections, don’t do them. This does not include pest inspections where often a re-inspection is required. It refers to instances when you call for a roofing or other contractor to further evaluate and repair problems you observed. If you go back and inspect the repairs, you are assuming the liability exposure of the repairs even though you don’t know if they’ve done them correctly or have solved the problem.

I enjoy working in our industry and believe we do a great service to homebuyers. Nevertheless, all too often people want to blame someone else for their problems – it happens to one in four home inspectors every year. I hope the “3 Ws” of report writing help keep you from being that one of the four.  

Editor’s note: Opinions expressed are those of the author. The publisher is not engaged in rendering legal, accounting or other professional services. If legal advice or other expert assistance is required, the services of a competent professional person should be sought.