Featuring America's Home Inspector: Nationally Syndicated Columnist, Barry Stone
Defects Overlooked During Final Inspection

Defects Overlooked During Final Inspection

The House Detective:  by Barry Stone, Certified Building Inspector

Dear Barry:  We are buying a brand-new home and were not planning to have a home inspection because the house was just approved by the county building department. Then we read your recent article about inspecting new homes, so we hired a home inspector and got some big surprises. He found two plumbing problems in the crawlspace under the house, three ungrounded outlets in the living room, and a safety violation concerning the furnace in the attic. What I want to know is, how could these defects have been overlooked when the county did their final inspection?  Jason

Dear Jason:  Whenever I begin to inspect a brand-new home, I wonder if this will be the first one where I find no faulty conditions of any kind. So far, no cigar.

So the question is, how do so many defects escape discovery by municipal inspectors? In most cases, incompetency is not the problem. In your situation, involving undiscovered defects in the crawlspace and attic, as well as three ungrounded outlets, the problem does not necessarily involve ineptitude on the part of the county inspector. More likely, it is due to endemic shortcomings with the municipal building inspection process.

Some municipalities may be exceptions to this, but in general, building inspectors do not crawl under houses or through attics. They are not even equipped with ladders or with crawl suits. This means that faulty conditions in those areas of a house are never subject to the final inspection. As a result, any problems with plumbing, wiring, heating, framing, insulation, etc. in those places are never seen during the final inspection and remain as-is when the construction is signed off by the inspector. That is why further inspection by a qualified home inspector is always a good investment.

As for the ungrounded outlets, here is why those were not discovered by the municipal inspector. The power company does not turn on the electrical service to the property until the final inspection has been officially approved. Therefore, the power is off during the final inspection. Without power, there is no way to determine whether outlets are grounded, whether they have correct polarity, or whether any of the electrical fixtures are actually operative.

Home inspections, on the other hand, take place after the utilities are turned on, and unlike municipal inspectors, home inspectors test the functional condition of fixtures and use test devices to determine whether outlets are properly wired.

The main differences between municipal inspections and home inspections are these: Municipal inspections are for code compliance only, and they are limited locations that are accessible by pedestrian means only. Home inspections involve not only compliance with building standards but with quality of workmanship and with functional and safety-related conditions that are outside the scope of the building code. What’s more, home inspectors go where most municipal inspectors are unlikely to go in an entire career: to places that entail crawling in the dirt or through narrow cavernous recesses.

Municipal inspections should be regarded as a preliminary final inspection. Home inspections, when done by a qualified inspector, should be regarded as a “final” final inspection.

Alleged Collusion Among Agents and Home Inspectors

Alleged Collusion Among Agents and Home Inspectors

The House Detective: by Barry Stone, Certified Home Inspector

Dear Barry:  As an expert witness in construction defect lawsuits, I see many cases involving home inspectors who fail to disclose defects or who minimize the findings in their reports. In most cases, these inspectors are members of the American Society of Home Inspectors (ASHI) or similar associations. One inspector confided that too many problems in his report might “kill” a sale and the agent would no longer recommend him to buyers. Another inspector said he was expected to “work with the agents;” not to raise red flags or be too “nit-picky.” This is disturbing because home inspector referrals come mainly from agents. It also indicates that inspector organizations are not policing the industry very well. Perhaps ASHI or their insurance carriers could maintain a database of court rulings against inspectors and agents. The industry needs to do its job before the government steps in.  Ray

Dear Ben:  Your position as an expert witness exposes you to the worst examples of home inspectors and real estate agents. Without doubt, there are ethical disparities and conflicts of interest among some agents and home inspectors, and it is these unprincipled relationships that engender so many of the courtroom dramas in which you testify. But fortunately, there is a brighter side to the world of real estate and home inspection; one whose characters rarely stand in the shadow of a judge’s bench. So let’s examine the darker and lighter sides of disclosure practices, beginning with those professionals who recommend home inspectors to their clients.

Basically, there are two kinds of real estate agents: Advocates and Hucksters. Advocates are the honorable standard bearers of an often unfairly maligned profession. Advocates are those who truly represent the very best interests of their clients; who actively promote the defect disclosure process, and who recommend only the most qualified home inspectors. Advocates would rather kill a sale and find a better property for their client than to have the client be unhappy after the sale. Advocates know that doing the right thing attracts future business.

Unfortunately, there are also the huckster agents, those who keep attorneys busily employed, who denigrate the hard-earned reputations of the honorable advocates, and who boycott the most qualified home inspectors. Hucksters represent their own financial avarice at the expense of their clients. They compromise the disclosure process by seeking those inspectors who are less likely to provide full defect disclosure. They recommend inspectors who are less experienced, less capable, or who are willing to exchange principal for increased business. A huckster would rather close the sale than jeopardize the immediate flow of commission checks. To a huckster, top-notch home inspectors are known as “Deal Killers.”

Among home inspectors there are also two basic varieties: experienced practitioners and developing practitioners. But even within these divisions, we find the same ethical contrasts that define agents: either a total commitment to the client’s interests or a general disregard for same. Adversely affecting this situation is the reliance of most home inspectors upon agent referrals for the majority of their business. Agents understand this, and some have learned to exert subtle pressure. Nothing overt; just a simple hint such as, “We just want to know that everything is structurally sound, so please don’t be nit-picky.” Another favorite is, “This deal is important; so we need a really good report.” Inspectors who do not accede to these coded messages, who are fully committed to the buyers’ interests, needn’t expect future referrals from those agents. The choice then is well defined: either become a “street walker” for unscrupulous agents, or rely strictly upon the referrals of advocates.

As to the consumer advocacy of ASHI and similar organizations, professional integrity among member inspectors can be influenced and encouraged, but it cannot be forced. Honesty can only derive from a willingness to be honest. A database of inspectors and agents who have been successfully sued could be published, but would this truly be a reliable determinant? We live in the age of frivolous lawsuits, a surreal business world in which McDonalds must serve tepid coffee, lest we victims burn our litigious laps. If the seller of a home fails to disclose a defect that was unknown to the agent and concealed from the home inspector, the attorneys still name the agent and the inspector as defendants in the suit.  And sometimes the juries rule against them, regardless of innocence of guilt.

In an imperfect world, “buyer beware” remains the essential caveat for those who purchase a home. The best way a buyer can beware is to find an “Advocate” for an agent and a home inspector with a reputation for thorough, accurate, unbiased inspections.

A Chip Off The Old Tub

The House Detective: by Barry Stone, Certified Home Inspector

Dear Barry:   I purchased my house about a year ago. At the time, the bathtub seemed to be OK, but now it is apparent that it was painted to cover rust. I also found plumbing problems under the sinks, but none of these issues was reported by my home inspector. What can I do about this?  Dawn

Dear Dawn:  The parties who are potentially liable are the sellers and your home inspector. Sellers are required to disclose all known defects. However, the sellers in your case may not have thought the painted tub was a defect. It might have seemed to them that this was a former defect, having been repaired with paint. Unfortunately, paint is not a permanent repair for the damaged finish on a bathtub. In most cases, chipping or peeling eventually occurs.

Home inspector liability depends on whether the problems were visible at the time of the inspection. The paint on the tub may not have been obvious at the time of the inspection.

As for the plumbing problems, seller liability depends upon whether the previous owners were aware of those issues and whether the problems even existed prior to the sale. Home inspector liability depends on whether the problems were visible and accessible at the time of the inspection. If the problems involve leakage, that may or may not have been occurring at the time. If there are installation defects, they may have been obscured by storage under the sinks, as is often the case during home inspections.

You should contact your home inspector and request a second look at these problems.

Asbestos Pipe Insulation Not Disclosed

The House Detective: by Barry Stone, Certified Home Inspector

Dear Barry:   My home was built in 1926 and has asbestos insulation on all the hot water pipes under the building. Fortunately, all of this asbestos has been wrapped. When I first learned about it, I was horrified and wondered why my home inspector hadn’t mention it when I bought the property. My main concern is what will happen when I eventually want to sell the home. Can I resell it in this condition, without penalty?  Am I required to have the asbestos removed? And also, do I have recourse from my home inspector for not mentioning the asbestos?  Judy

Dear Judy:  Asbestos pipe insulation was common in the 1920s and is not regarded as a significant health risk when it is undamaged and intact. Fortunately, the asbestos insulation in your home been encapsulated, rendering it in much safer condition than when it was exposed to the air.

As a seller, there is no requirement for removal of asbestos, and there are no penalties for merely having it. Your only requirement will be to provide full disclosure to prospective buyers, to let them know that the asbestos material is present. If the former owners were the ones who had the pipes wrapped, they probably knew about the asbestos and should have provided some disclosure.

Environmental hazards such as asbestos are not within the scope of a home inspection. However, competent inspectors who take their work seriously will often point out situations where the presence of asbestos is likely, such as insulated pipes in an old home. This is something that your home inspector would have been wise to do, even though not required to do so.

House Need To Be Rewired?

The House Detective: by Barry Stone, Certified Home Inspector

Dear Barry:   We just bought a home but can’t move in because of major electrical problems. Before we bought it, our home inspector found a few electrical defects, but he said these were minor, so we waited till the escrow closed before making repairs. Our electrician now says that the previous owner tampered with the wiring, and the entire house needs to be rewired. But we don’t have enough money to pay for that kind of repair. Shouldn’t our home inspector have reported this situation, and isn’t he liable for the cost of rewiring?  Carol

Dear Carol:   If your home inspector failed to identify visible defects in the electrical wiring, then he is probably liable for the repair costs, depending on liability limits in the inspection contract and liability laws in your state. However, before rushing to judgment regarding liability, there are other questions that should be answered.

Presently, you have two conflicting opinions about the electrical system. The home inspector says there are some minor defects (whatever that means), and the electrician says the house needs to be rewired. The question is, “Who is correct?” Two possibilities come to mind: either you have a home inspector who overlooked significant defects or an electrician trying to land a big job. This uncertainty should be resolved before taking action.

One thing to keep in mind is that it’s extremely unusual for a house to require total rewiring. Most electrical defects are specific and can usually be repaired without replacing all of the wires. If the previous owner of your home “tampered with the wiring,” it is hard to imagine that he affected all of the circuits.

To gain some clarity on the situation, you should get a third opinion from another electrician. If the second electrician agrees that the house needs to be rewired, the home inspector should be notified and should come to the property to explain why he failed to correctly evaluate the electrical system. At that point, he should be asked to file a claim on his errors and omissions insurance, assuming that he has insurance.

Additionally, the seller of the home should not be dismissed from potential liability. The electrical code requires that there be a permit for altering the wiring in a home. If the seller “tampered” with the wiring in ways that affect safety, the work was most likely not permitted. If that is the case, the seller should have disclosed this prior to sale of the property. If no disclosure was made, the seller should pay for the electrical repairs.