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Re: Builders Demanding Indemnification


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Contributed by Dennis Robittaille

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According to a recent article in the San Antonio Express-News, a new tactic being used by builders in the San Antonio area to keep home inspectors off-site is to demand that home inspectors sign a contract releasing the builder from all liability while the inspector is on-site.

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I am not so sure that this is a "tactic". Our builders insurance only covers, employees and customers. So Home Inspectors are in a weird classification. We do ask for a copy of the Home Inspectors insurance prior to site visits, but we do not yet ask for a "Hold Harmeless agreement" Our insurance guy says it is a gray area, the person is a sub contractor but not ours. I can see both sides of the coin often as a builder the Home Inspection can be erratic. Believe it or not there are guys out there with sub standard training, no tools, no technical expertise. It is hard for builders with limited exposure to HI to respect you before you have demonstrated that you are not one of the masses. I may not become popular saying this--but from my perspective more of the local HI are underqualified then qualified.

Now from the other perspective. We do some new construction inspections (it is still rare here), most contracts do not have an inspection clause and demand is so strong that alot of builders will just tell the client take it or leave it. But no builder has yet asked for us to sign the "Hold Harmless agreement" but as long as it was a "normal" one I would probably sign it.

Pete

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This has been going on in the Phoenix area for years. Brown Family Communities (BFC) Want the inspector to carry 2 mill in gen liability insurance, 1 mil. in auto insurance, schedule 14 days in advance , have the superintendent present for the entire inspection, release them from all liability and give them a copy of the report at the end of the inspection.

Del Webb (Pulte Is currently writing up something similar.

Continental Homes Had something close to what Brown has but a group of us got together and put an add in the Saturday paper (Real Estate section) condemning this. As soon as HI's were certified in this state Continental changed it to confirming your workers comp ins. Getting permission from the builder in writing before the inspection and being state certified.

Pete is right in saying there are many unqualified inspectors out there.

But.

If one can prove that they are qualified, the builder shouldn't try and stop the inspector from accessing the property, It may put more liability on the builder in the end.

We were moving in and my daughter went to play in the house. When we went to look for her she was dead. Your Honor, I wanted to bring in a state certified inspector that is also certified in the local building code and carries there own insurance but the builder would not allow it, I can't help but feel that had my inspector been allowed in the house they would have found the electrical problem before my 5 year old daughter did.

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Originally posted by swarga

This has been going on in the Phoenix area for years. Brown Family Communities (BFC) Want the inspector to carry 2 mill in gen liability insurance, 1 mil. in auto insurance, schedule 14 days in advance , have the superintendent present for the entire inspection, release them from all liability and give them a copy of the report at the end of the inspection.

Del Webb (Pulte Is currently writing up something similar.

Continental Homes Had something close to what Brown has but a group of us got together and put an add in the Saturday paper (Real Estate section) condemning this. As soon as HI's were certified in this state Continental changed it to confirming your workers comp ins. Getting permission from the builder in writing before the inspection and being state certified.

Pete is right in saying there are many unqualified inspectors out there.

But.

If one can prove that they are qualified, the builder shouldn't try and stop the inspector from accessing the property, It may put more liability on the builder in the end.

We were moving in and my daughter went to play in the house. When we went to look for her she was dead. Your Honor, I wanted to bring in a state certified inspector that is also certified in the local building code and carries there own insurance but the builder would not allow it, I can't help but feel that had my inspector been allowed in the house they would have found the electrical problem before my 5 year old daughter did.

I agree with you. Here we do not have any license, so there is no benchmark for qualification.

But I also know having worked in Risk Management that the statement you outlined is of no consequence to true liability reduction. A skillfull wordsmith can make that sort of statement from any situation.

I am anti big governement in general but I do think we as HI's benefit from a good state law. There is no enforceable standard here. So when one of those people with the thfancy cars who follow my clients show up and say "My inspector says the anti-tip on the stive does not matter" we could say "Just following the law". (just assuming the eventual law will have some good standards).

As an articulate HI, just tell your slient to call you after the closing and you will help them try and find what the builder is hiding. Gives them more of a story to tell their neighbors and friends (referrals).

Pete

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