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Tips for Success
in the Inspection Business
Mike's Dilemma
By George Wells
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New York home Inspector,
Mike wrote to me about a dilemma he is having. It is one that we
inspectors often face. His question relates to underground oil tanks but
it is any of a number of items that can cause a similar dilemma for any one of
us.
Mike wrote:
George:
I'm a veteran and licensed NY State Home Inspector but one item that
continually haunts me is buried oil tanks.
How do you recommend home inspectors handle residential buried oil
tanks? Sellers don't disclose them, Realtors down play them, buyers sue
you if you miss them. When I discover and report them I become the center of negative
controversy. If I miss one and don't report it I get sued even though
my contract says they are beyond the scope of a home inspection. The
company I refer them to for testing and removal gets the big bucks and I
don't even get a thank you.
Help,
Here's
my reply:
Hello Mike,
This was a very good question.
I am going to add it to the Tips For Success newsletter for everyone's benefit.
Have you actually been sued for
not reporting an underground storage tank? If so, what was the outcome? Is it
a requirement in New York
to look for underground tanks or inspect them? I cannot see how someone would
win a lawsuit for you not doing something that you were never hired to do in the
first place. That is, of course, unless you have set a precedence.
Have you read my e-book "How to Write a Better Home Inspection Report"? Read
the chapter "The Doorknob Is Loose". You are setting yourself up to be sued if
you report on underground tanks. If it is your practice to look for underground
tanks, and you miss one, that is very different from not looking for them in the
first place. If you have looked for, and have been reporting, underground
storage there is a reasonable expectation on the part of any person who has
hired you based on your reputation that you should find any tanks buried on
property that they hire you to inspect.
The key is consistency. You cannot expect to report the presence of oil tanks,
beehives, loose doorknobs, mulberry trees, or anything else for some clients and
expect not to have to report similar items for other clients.
You are probably familiar with
the phrase “Loose cannon on deck” (or simply “loose cannon”).
Real estate agents are likely to think of an inspector who is
inconsistent as being like “loose cannon”. They cannot
predict what you are going to say or report on during an inspection.
You need to decide on what it
is that you are going to look for and report on. Plan your
work and work your plan. Once you have decided what is going
to be included in your inspections and what is not going to be included, you
need to communicate that to the local real estate community.
You may want to put something
on your web site saying that you have revised your standards of practice and
advise everyone to become familiar with your new standards.
Have new clients sign a statement acknowledging that they have read and
understand your pre-inspection agreement and that you are working under a new
set of standards. Keep in mind that I am not a lawyer.
These are only suggestions to help make things clearer to your existing
clients and potential new clients. You should consult with
your lawyer for help with drafting any type of document that you are asking your
clients to sign.
I made the decision several
years ago not to inspect appliances as part of my standard inspection.
Most of my work comes from referrals. New clients
from referrals have certain expectations regarding the service I provide.
After all, that is why they are hiring me. For all I
know, they may have been calling me because they expect me to inspect
appliances. I made sure that everyone I worked with
understood that I no longer inspect appliances. I run the
dishwasher and garbage disposal to check for plumbing leaks only.
I still explain the purpose for running the appliances to every client
who is present during inspections.
People may be calling you
because they expect you to look for underground tanks.
Imagine several people standing around the water cooler at work talking about
home inspectors. One person says, “My home inspector did not
tell me that there is an underground oil tank and it is going to cost me $5,000
to have it removed”. Another person then says, “Gee, you
should have hired my inspector - Mike. He found a tank and
saved us $5,000”. A third person says, “None of the
inspectors I’ve talked to inspect for underground tanks. Give me Mike’s phone
number, I’ll have him do my inspection and save me the cost of hiring a person
to look for tanks”. Person number three then calls you and
never mentions underground tanks. You do the inspection,
there is a tank and you miss it. You can see where this one
is heading...
I respect any home inspector
who is trying to do the right thing. I am quite confident
that you are just trying to do the right thing by reporting on underground tanks
when you find them. While it is important for you to be
consistent, there are times when it is appropriate to deviate from your normal
inspection. I will deviate from the standards when I see a situation that
represents an immediate hazard because I do not want anyone to be injured.
In that case, you are reporting on the hazard, not the specific item that
is the cause of the hazard. You need to be very careful with
the way that you present your findings of the hazard; whether verbally or in
your written report.
Here is an example of a
situation I encountered a while ago. I used to be an
electrical contractor with quite a lot of industrial experience.
A small electrical contractor, who was a former student of mine, asked me
to advise him and inspect his work on a electrical project he had in a
manufacturing plant. It was a more complex job that he was
comfortable with so he wanted someone more experienced to make sure he was doing
everything correctly.
While in the plant one day, I
walked up onto a mezzanine about 20 feet above the plant floor so that I could
get a bird’s eye view of the work below. There was a dry
type transformer mounted on the deck of the mezzanine. I do
not recall its exact size but it was around 100 kVA or so.
The transformer had a vented top to facilitate cooling as most transformers of
this size do. There were cardboard boxes stacked up on the
transformer and all around it. The transformer was very hot.
It was so hot that I was sure it would start a fire if the boxes were not
removed from the area.
I had some concerns about the
location of transformer. It should not have been mounted on
the mezzanine floor because the mezzanine was used for storage and it was
inevitable that someone would stack stuff on top of it and around it.
I told my client, the
electrical contractor, that I was going to find the plant manager and tell him
about the situation. I was not there to look at the
transformer. That was completely outside the scope of what I
was there to do. However, I recognized a hazard and reported
it. I did not report it as a transformer that had been
installed improperly. I reported it as a hazard that needed
immediate attention. Had I not told someone about the
hazard, there very likely would have been a fire.
What if I had not reported the
situation to the plant manager and there had been a fire?
Would I have been responsible? Perhaps not legally but
certainly in a moral sense, yes, I would have been. What if
I had seen the boxes stacked up but it had not been unusually hot at the time
but as an electrical expert, I know that the conditions were such that there was
a fire hazard?
Those of us who have special
expertise in a given area are going to be held to a higher standard with respect
to our expertise whether we like or not and regardless of what our
pre-inspection agreement says. Many of my clients hire me
because of my electrical background. I advertise my
credentials. I want them to hire me so I promote the fact
that I am a master electrician and was an electrical contractor.
My clients have a reasonable expectation that I will see things that
relate to the electrical system that another home inspector may not see.
The same is true with someone who has special training in underground
tanks, roofing, HVAC, plumbing, or anything else.
It is a fine line that we
sometimes have to walk. I would never ignore something that
would cause injury to someone or would likely cost them a lot of money but, I am
very careful about how I present my findings. Any time you
deviate from your standards, you need very clearly to explain that you have
deviated from the standards and explain why you have deviated for the standard.
I wish you much success!
George
Comments from other inspectors: John McKenna: The Inspection report should be proactive and instruct each client to
hire a professional company to inspect for the presence of these tanks,
as it is beyond the scope of the inspection service to find things
that are buried underground. Inform each client that it is their
responsibility and that way they will not have unrealistic expectations. John McKenna
American Home
Inspection Earl Taylor: I have an exclusion in my contract for Underground fuel tanks. If there is evidence of an oil tank underground I do cover it in the report
two ways, as a functional tank and as an abandoned tank. There are federal guidelines on how to handle an abandoned tank. Also, there are methods of checking functional fuel tanks for ground contamination if the local or state regulations require it. Earl Taylor, Lead Inspector
R.J. and Associates, Inc. | 
