Featuring America's Home Inspector: Nationally Syndicated Columnist, Barry Stone
Electrician vs. Home Inspector

Electrician vs. Home Inspector

The House Detective: by Barry Stone, Certified Home Inspector

Dear Barry:  Before buying my home, I hired a home inspector, and he reported no problems with the electrical subpanel in the bedroom closet. After moving in, I hired an electrician to install some light fixtures in the kitchen. He said the breaker panel was made by Federal Pacific, a brand that has been recalled as a fire hazard. He also said the panel had burn marks on the inside. At his urging, I let him replace the panel at a cost of $2880. After this, I called my home inspector to demand that he pay for the repair, since he failed to report these problems. The old panel had been thrown in the trash, but the inspector came over and showed me photos that he had taken of the panel during his inspection. The panel was actually a General Electric, not a Federal Pacific, and it had no perceptible burn marks. It now seems that my electrician was lying, and I’m wondering what to do. What do you think about this mess?  Karen

Dear Karen:  This situation has a number of complications and  uncertainties. Here are the main issues:

1)  You are faced with opposing testimonies from the home inspector and the electrician. The electrician says the panel was a Federal Pacific and had burn marks. The home inspector says the panel was a General Electric and did not have burn marks. Unfortunately, the old panel is no longer available as evidence. The home inspector, however, has presented photos to support his position. Apparently, someone is not telling the truth. Therefore, it is necessary to ask the question, “Does the home inspector’s photo depict your breaker panel or a panel from another property?” It may or may not be possible to answer that question conclusively.

2)  Competent home inspectors routinely disclose Federal Pacific breaker panels as potential fire hazards, especially if evidence of overheating is apparent. Failure to make such disclosures is a matter of professional negligence. If your electrician’s claim is correct, then your home inspector was at fault. If his photos are authentic, the electrician is at fault.

3)  Another issue involves your initial demand that the home inspector pay for the new breaker panel. When you were told that the panel needed replacement, you should have notified your inspector before having the panel replaced. A home inspector should have the opportunity to review a contested situation, to answer for what may or may not have been an error in the course of the inspection. Some home inspection contracts actually specify the right to see a claimed defect before it is repaired. The fact that the inspector was not given a chance to see the problem may absolve him of liability, regardless of whether he was at fault.

4)  A cost of $2880 to replace a breaker panel is excessive. The panel itself probably cost less than two hundred dollars and probably took less than a day to install. When you weigh these numbers, how much was your electrician charging as an hourly wage? From this perspective, the electrician appears to lose credibility.

In view of the inexplicable cost for the new panel and the photo evidence provided by the home inspector, it appears that the electrician may owe you a refund and a humble apology. Otherwise, he should provide a convincing explanation.

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.

Buyers Find Undisclosed Electrical Problem

The House Detective by Barry Stone, Certified Home Inspector

Dear Barry: We bought a triplex about a year ago and hired a home inspector to find the defects. But he missed something that could cost us a lot of money. Recently, we re-rented one of the units, and the new tenant discovered that the laundry room for the building is wired to her electrical system. So she refuses to pay rent until we pay for the added charges on her electric bill. Is this something that our home inspector should have found? And what about the sellers and listing agent? Shouldn’t they have said something, as well? Tina

Dear Tina: Assigning liability in a situation of this kind depends on a number of variables. So let’s look at the possibilities.

The first thing a home inspector should notice when inspecting the electrical system for an apartment building is the number of service meters and panels for the property. In a triplex, there should be four meters, one for each apartment and one for common areas such as exterior lighting, utility rooms, and the laundry facility. If there is no separate service for common areas, that should be noted in an inspection report. It’s something a buyer would want to know. On the other hand, when a separate service for common areas is provided, home inspectors do not verify which portions of the building are wired to that system. Turning off each breaker to see which fixtures and outlets are served would be a very time-consuming process, and that type of evaluation is not within the scope of a home inspection. The inspector’s liability, therefore, depends on whether there is a separate electrical service for common areas.

The sellers’ liability also has variables. If the property has no separate electrical service for common areas, the sellers should have realized that one of the tenants was paying for electrical use in the laundry room, and that fact should have been disclosed to potential buyers of the property. On the other hand, what if there is a separate service for common areas but the laundry room is not wired to that service. That could have been a wiring defect from the time the building was constructed. As long as the sellers were paying an electric bill each month for other portions of the building, they might have been unaware that the laundry room was not charged to that bill.

As for the listing agent, it is highly unlikely that a Realtor would be aware of this kind of problem.

Finally, there is the disgruntled new tenant who discovered the problem. It might be a good idea to pay her entire electric bill for the disputed time period, as a way of relieving tensions. But electrical alterations will be needed to prevent ongoing disagreements over electrical usage. If there is no separate service for common areas, you can have one installed by a licensed electrician, or you can have the laundry room circuits separately metered so that adjustments in the tenant’s electric bills can be computed. To get this process started, have the building checked by a licensed electrical contractor to see which would be a more practical and cost-effective approach.

Safety Concerns in Electrical Panel

The House Detective by Barry Stone, Certified Home Inspector

Dear Barry: We recently purchased a home. During the negotiations, we asked the sellers to replace the electrical panel due to safety concerns disclosed by our home inspector. The sellers agreed to have this work done. On the day that the escrow closed, the escrow officer told us that the new panel had been installed without a permit. After moving in, we applied for our own permit at the building department. But the new panel did not pass inspection. We emailed copies of the failed inspection notice to the sellers, their agent, and our agent, but no one has responded. What should we do? Niki

Dear Niki: According to the National Electrical Code and the International Residential Code, it is illegal to perform electrical installations without a permit. It was the responsibility of the sellers to have this work done according to safety code requirements and with the approval of the local building department. Likewise, it was the responsibility of the agents to inform you of the status of the work before the close of escrow, not after.

If the sellers and agents are unwilling to address your concerns, a wake-up letter from a real estate attorney may be needed. Certified mail on legal stationary tends to be more stimulating than common email. Of similar effect would an ethics complaint at the local Board of Realtors office.

FHA Appraisers are not Home Inspectors

The House Detective by Barry Stone, Certified Home Inspector

Dear Barry: In one of your articles, you painted an inaccurate picture of FHA appraisers. I agree that home inspectors are more qualified than appraisers to identify defects in a home, but FHA appraisers also have a role in identifying some of these problems. According to HUD standards, an FHA appraiser must look in the attic for signs of leakage, poor construction, and fire damage, inspect the foundation crawlspace for various defects, operate the heating, electrical, and plumbing systems, review the site drainage, and check many other issues. Our inspections are not nearly as thorough as a home inspection, but when we find evidence of a significant problem, we recommend that buyers hire a home inspector. I suggest you review the HUD Valuation Analysis of Single Family One to Four Unit Dwellings. David

Dear David: My comments about FHA appraisers were not intended to negate the importance or validity of your profession. Many homebuyers, however, are unclear about the difference between an appraisal and a home inspection. When they see an appraiser inspect the attic, the furnace, the electrical panels, etc., they sometimes assume that a home inspection would be redundant; that the FHA appraiser has fully evaluated the physical condition of the property. Then they’re surprised when problems are discovered after the close of escrow.

When buyers see their appraiser check the furnace, they may assume that the heating system has been evaluated and approved. Later, they’re surprised to find safety violations involving fire clearances, gas supply connections, and combustion air requirements.

When buyers see their appraiser check the attic, they may assume that pertinent conditions have been checked and signed off. Later, they’re surprised that the rafters need reinforcement, that the chimney is too close to combustible material, that the attic wiring is improperly spliced, that some of the water lines are substandard, or that the vapor barrier is on the wrong side of the insulation.

When buyers see their appraiser open the breaker panel, they may assume that electrical compliance has been verified. Later, they’re surprised to learn that circuits are over-fused, that breakers are double-tapped, that ground wires are not bonded, or that some wires have burnt insulation.

When buyers see their appraiser check the fireplace, they may assume that fire safety compliance was confirmed. Later, they’re surprised to know that the chimney liner is cracked, that the gas connector is substandard, that there is a gap between the mantle and the firebox lintel, or that the hearth is too close to combustible flooring.

When buyers see their appraiser check bathroom fixtures, they may assume that conditions are acceptable. Later, they’re surprised that bathtub windows are not safety glass, that hot and cold connections are reversed at the sink, that the toilet is loose on the floor, or that the shower pan leaks under the house.

And speaking of under the house: Since when do appraisers don a suit of overalls and crawl the length and breadth of a sub-area? When buyers see their appraiser peek into the access opening, they may assume that conditions in that area have been evaluated. Later, they’re surprised about faulty ground drainage, about pipes that are corroded or leaking, about piers that are displaced, or air ducts that are disconnected.

HUD should set realistic standards for FHA appraisers. Instead, this federal agency has required FHA appraisers to perform tasks that are beyond the scope of their expertise. This increases professional liability for appraisers, while giving a false sense of security to uninformed homebuyers. Bureaucracies should allow appraisers do what they do best: determine the market value of property; not evaluate building systems. Instead of inspecting for defects, FHA appraisers should advise homebuyers to hire qualified home inspectors; not merely when defects are observed, but in every case. This will better serve the interests of the home-buying public, while reducing the liability of FHA appraisers.