Recourse against an incompetent Inspector

mainecoonkittyJune 20, 2011

We had solid buyers for our house, with a pre-approved mortgage, who wanted to close quickly since they were relocating to our area. We negotiated a good deal and both they and we were happy with the numbers. But here's the issue: they hired an inspector who claimed that our house had mold in the attic on just a visual peek into the attic from atop a ladder through the ceiling access panel. He did not step a foot into the attic itself, took no samples of anything - just looked up there with a flashlight and stated that he saw mold. On that one word alone in his report to the buyers, they cancelled the contract and walked away in complete fear. Nothing my listing agent could do made them reconsider. With all the horror stories in circulation in the media about mold in a house, I could not really blame them for their fear.

In a panic, my husband and I immediately called in a certified EPA mold specialist. Guess what? He could not even find anything remotely suspicious or anything to take any samples of for testing, but he did do air samples just because we asked him to. There is NO mold anywhere in that attic or anywhere else in our house. None. And we have a letter from him stating that fact.

This same "inspector" completely missed that our hot water tank is electric, not gas, and he stated that the "gas water heater has adequate venting and fires cleanly". It's an all-electric house! He also completely missed that our back-up heating source to the electric heat pump is an electric furnance, not a gas furnance. There were several other very obvious misses just like that that cause us to question his competence.

But the bottom line is that in this very tough market, this guy's incompetence has cost us a very serious,m qualified buyer who has now moved on and purchased another house due to a limited timeframe to move. Do we have any recourse against him?

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Legally? The inspector was hired/contracted by the buyers. Any remedy for fault in the performance of his duties lies within contract law, and the contract was between him and the buyers, not between him and you. I don't think there is much you can do besides possibly report him to the home inspector governing body and post a FACTUAL review of him on as many online review sites as you can (and possibly send a letter describing your experience to all your local real estate agents/brokers).

Make sure you stick to factual events and examples, because he could also turn around and come after you for defamation and slander/libel if you can't back up what you post with facts.

I am not a lawyer, this is just my opinion.

    Bookmark   June 20, 2011 at 3:25PM
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Recourse depends upon a few things. First and foremost, what state do you live in? If it is one that regulates the home inspection profession, chances are the regulations state that the inspection for mold as well as any other environmental hazards are beyond the scope of a home inspection, which is also true for nationally accepted standards.

That said, if the buyers used that reason to cancel the contract, what proof did they show that the mold did indeed exist? Did they have photos taken by the Home Inspector? If not, how did they get out of the contract on that basis with no documentation?

IMO, your recourse is really with the buyers, because if they hired someone who had no training education or experience in mold detection, and they did nothing to confirm the existence of mold, and provided no documentation of the HI's findings, they had no business canceling the contract on a non-existent condition.

In addition, as some of his other findings were clearly not based upon your home, who is to say that the mold finding was also not based upon another home?

Many home inspectors will produce quickie reports because it enables them to perform more inspections. Often the reports are based upon a report from another inspection, and they make changes to reflect the findings of the current inspection. If they are sloppy and careless, this is the kind of thing that results.

That said, IMO, start with your attorney and they should not have been able to get out of the deal with no proof of a problem. They in turn may or may not be able to go after the HI to recoup any losses.

Bottom line is the HI clearly dropped the ball, but so did your attoreny in protecting your interests in the transaction.

Especially as the HI made other glaring errors that could easily be proven to be false, as that made the entire report suspect and lacking in credibility.

    Bookmark   June 20, 2011 at 3:33PM
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I would be very upset about this, buy unfortunately, there isn't much you can do. It seems ironic the HI could sue you for slander or for defamation of character, even though he sort of slandered and defamed your house (whatever the proper term would be for making false accusations about a house). Even if your accusations are factual, he can STILL sue you for it. Sure, he may lose, but he still will have dragged you through court, made you lose time from work, etc. etc. Or what if he wins? Are you prepared for that? Are you prepared for what could be a 1 year battle which may still net nothing but more frustration?

You may find an attorney who would be able to do something about it, but I would think in the end it wouldn't be worth the trouble. One thing the HI could easily say in his defense (and the court would probably agree) is that a visual inspection is totally acceptable for what he was hired to do. If he's smart, he probably has a "cover your butt" statement in the inspection report that states that he saw a board with a green colorization, that MAY be mold, but that further inspection would be required to PROVE it. If thats the case, then he's totally free and clear of any negligence. It's not his fault the buyer freaked out and refused to investigate further. Another thing he could say in his defense would be that you have no real proof the buyers backed out solely for that reason. Even if they did (and you would have to get them to make an appearance in court to testify to this - yeah, like that would happen) - he could STILL say you have no proof that their financing might not have fell through or some other thing might have happened to prevent the sale.

I have only dealt with 2 HIs, and while they both appeared to know what they were doing, I also saw some of the "lazyness" that goes along with it. My HI would only look at the roof from ground level w/a pair of binoculars. Same as your HI refusing to actually go into the attic. My HI was worried about falling off the roof and injuring himself, or falling through the roof and enabling the owner to sue him for repairs - the same as your HI didn't want any liability for falling through the ceiling.

About the only thing you could do "to get back at him" would be to report him to the banks and realtors around the area in hopes they would stop recommending him to buyers. But then you are opening yourself up for a lawsuit again. Things happen for a reason, and although it stinks you lost this sale, for all you know, they may not have followed through in the first place. Better to just move on and forget about it. I hope you find another buyer real soon. Good luck.

    Bookmark   June 20, 2011 at 6:44PM
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Omg, that is a nightmare! I would be so mad! I bet stuff like this happens with deals all the time. You always hear horror stories about inspectors. Actually, something similar happened to me one time. It didn't cause me to lose the deal but it caused me to have to pay the buyers a grand. I sold a house two years after buying it. I agreed to do the termite inspection. I called the same guy who inspected it two years ago when I bought it. THIS time he pointed to damage in the hardwood floors (it was an old 100-year-old house) from termites. He couldn't SEE any termites but he couldn't say they weren't there because he couldn't get all the way to the back of the crawl space. Funny, it was the same damage that was in the floor when I bought it but he didn't find it a problem then. He also forgot he did the first inspection. I had to give the buyers a thousand dollars so they could have it treated for termites just in case. I'm friends with them now and they told me they never had it treated. But your situation is much worse. I am so sorry. I will be prepared for something like this if my next buyer wants to get an inspection. Maybe you can put something in the agreement that they have to give you a chance to explain or remedy the defect. You had the EPA guy come. It's too bad they didn't wait for you to get an expert opinion.

    Bookmark   June 20, 2011 at 10:40PM
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Wow - what a terrible experience with the inspector! I would try to report him to whatever group/board that he belongs to. Also, I'd be sure that the buyers agent knows how wrong the inspector was because so that he doesn't recommend this inspector to any more buyers.

I have to disagree with one point logic made. I was always under the impression that a buyer could back out of a contract for ANY reason under the home inspection contingency. They don't have to have proof that there is a problem/issue with the house. If someone were to insist on proof or a reason for backing out, they could point to some other tiny little thing that was wrong with the house like squeaky floorboard or a window that won't open. (They wouldn't have to state that potential mold was the issue). Even if the law said that buyers had to give the seller the opportunity to fix any problems that would prevent them from buying the home, a buyer could probably find something trival that couldn't be fixed.

    Bookmark   June 21, 2011 at 9:23AM
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During the option period (at least here) they can get out for ANY reason and don't have to give a reason. So I agree with Maurenemm that it would be hard to prove that the buyer walked because of the inspector.

I am really shocked an inspector would mention mold. Here an inspector would never mention mold. Too much liability all around. When my brother was buying a house in CA the inspector said something along the lines of "there is some gray stuff on the wall you may want to have checked out" and my brother said "you mean mold?" and he said "I didn't say mold...but you may want to have that wall looked at."

    Bookmark   June 21, 2011 at 11:14AM
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Well, that stinks, but there isn't anything you can do about it. The home inspector has a duty to point out any potential problems to his employer (your buyer.) He has NO obligation to you. He is just giving his professional opinion - which may be right or wrong.

    Bookmark   June 21, 2011 at 12:32PM
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maurenemm: "I have to disagree with one point logic made. I was always under the impression that a buyer could back out of a contract for ANY reason under the home inspection contingency. They don't have to have proof that there is a problem/issue with the house."

IMO, that may vary state to state.

However, I can't see why it would not depend upon how the purchase/sale contract is written

For example, if it is a state that licenses the HI profession, I would require a clause that states that only the findings of a licensed home inspector will be valid for termination of contract. In addition, if it is found that the HI either stepped beyond his training and/or certification in identifying a visual defect that proves untrue, or if he made an error in stating that a visual defect exists that does not exist and he can't support his assessment, that too would not be a valid reason for termination of the contract.

Bottom line is there are HI horror stories mostly becuase because many buyers do not perform due diligence in hiring a home inspector, and usually go for the lowest bid and the same day and/or check list report. This more often than not winds up screwing them and often the seller as well.

In addition, many attorney's are indeed too lazy to customize the purchase/sale contract to fully protect the buyer...same for the sellers attorney. They generally want to standardize everything, close and collect their fee.

It never ceases to amaze me that with home sales and purchases, given the financial ramification and investment involved, that most people are so cavalier and uneducated about protecting their own interests in the process.

There is no excuse for lack of due diligence, on the part of all involved.

    Bookmark   June 21, 2011 at 2:08PM
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Thank you all for your comments. I really appreciate the knowledge and wisdom you've shared. We're over the shock and will move forward. tryhing to protect ourselves from another disappointment as best we can.

    Bookmark   June 21, 2011 at 4:07PM
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