House Detective: Making the Most of Home Inspection

The House Detective:  by Barry Stone, Certified Home Inspector

Dear Barry: We are buying a home and have received the sellers’ disclosure statement. The sellers say they received an insurance payment for hail damage on the roof, but they admit that the repairs were never done. We have two questions about this: Did the sellers commit insurance fraud by receiving payment for roof damages, without completing the repairs?  And, are the sellers obligated now to repair the roof?  Jen

Dear Jen: The sellers would only be guilty of insurance fraud if the claim for hail damage had been false. If the insurance company paid for actual damages, then the sellers had the choice to spend the money on repairs or to accept the money as compensation for the loss. What matters in this case is that the sellers honestly disclosed that there are unrepaired roof damages.

The sellers are currently under no obligation to repair the roof, although you can request repairs as part of your negotiations with them. What is needed now is a professional evaluation of the roof by a qualified home inspector or roofing contractor. Once you know the extent of the damages, you can decide whether repair or replacement of the roof is needed. With this information, you’ll be better prepared to negotiate with the sellers.

The House Detective:  by Barry Stone, Certified Home Inspector

Dear Barry: I bought a small commercial building about 4 years ago. Recently, I discovered evidence that there was once a fire in the basement. This was never disclosed by the seller. Now the seller says that the tenant in the building had the fire, but the seller provided no details. I have just listed the property for sale and don’t know what I should disclose to buyers. What do you recommend?  Mary

Dear Mary: If the fire was a substantial one, the fire department was probably called, and an insurance claim may have been filed. In that case, the fire department would have an official report of the event. Therefore, you should check with the local fire authorities to see what their records show.  If they have a fire report on file, it may indicate whether the owner of the building was aware of the situation. You should also ask the seller to provide the name and policy number of the insurance company so that you can learn what claims may have been made.

If the fire department and the insurance company were never notified, then the fire may have been small and the damages cosmetic in nature. In that case, you should disclose to future buyers of the property as much as you know about the situation and about your unsuccessful attempts to learn more. You should also hire a professional inspector to evaluate the condition of the property, including the fire evidence in the basement.

The House Detective:  by Barry Stone, Certified Home Inspector

Dear Barry: When we bought our house, our home inspector said that everything was in good condition. Since then, our basement has leaked, some of our circuit breakers became so hot they had to be replaced, and a chimney sweep told us that the fireplace is not usable. All of these issues should have been disclosed to us, and now we are saddled with one expense after the other. Who do we blame for these problems, the home inspector, the Realtor who recommended the inspector, or the previous owner?  Rena

Dear Rena: All three share some blame for the unfortunate lack of disclosure. The home inspector apparently did not do a thorough job. When a basement is prone to leaking, there are usually some signs of past leakage. If breakers are prone to overheating, there are usually some observable symptoms or evidence of faulty installation. When a fireplace is not usable, it is either because of substandard construction or material deterioration. Such conditions are typically identified qualified home inspectors.

If the Realtor recommended your home inspector, there could be some liability on the basis of “negligent referral.” Agents usually know which home inspectors are more or less qualified and thorough. Unfortunately, some agents are not inclined to recommend the best home inspectors. In some real estate offices, the best inspectors are labeled as “deal killers” or “deal breakers” and summarily dismissed from referral lists.

The sellers may or may not have known about the problems with the electrical panel and fireplace. Evidence of such conditions is not always apparent to homeowners. However, they probably knew about the leaking basement and should have disclosed that condition.

To hold a home inspector liable, you should give notice of the problems before they are repaired. Once the defects are altered from the way they were at the time of the inspection, it is difficult to raise issues of liability. Some home inspection contracts specifically require that you notify the inspector before making repairs.

At this point, you should give notice to the inspector, the agent, and the seller that these problems have been discovered. If no one is willing to address the matter, you can seek legal advice regarding disclosure liability.

The House Detective:  by Barry Stone, Certified Home Inspector

Dear Barry: I bought my home about five years ago and hired a home inspector prior to purchase. Recently, my contractor replaced some exterior siding. When the old boards were removed, he found rotted framing inside the walls. Is this something the home inspector should have found five years ago, and do I have any recourse?  Kate

Dear Kate: A home inspection is specifically defined as a “visual inspection of conditions that are exposed and accessible at the time of the inspection.” No home inspector can determine conditions that are hidden within finished walls. The rotted wood, after all, was discovered by removing the siding; something that does not take place during a home inspection. Keep in mind also that five years have passed since your home was inspected. Wood that is currently rotted may have been intact at that time. But that could only have been determined by opening the walls, and investigations of that kind are beyond the scope of a home inspection.

When hiring a home inspector, it is wise to read the inspection report and contract in their entirety. This will familiarize you with the standards and limitations of the home inspection process.

The House Detective:  by Barry Stone, Certified Home Inspector

Dear Barry: We just hired a home inspection for the house that we may buy, and this raised a dispute with the sellers. The inspector found rotted framing below the porch and living room, but he did not list this as a major defect. The sellers say we cannot cancel the deal without losing our deposit because the purchase contract allows cancellation for major defects only. What should we do? Larah

Dear Larah: Home inspectors rarely specify whether a defect is major or minor because that kind of judgment is often subjective. A defect that is major to one buyer might be minor to someone else. In the case of wood rot, two variables directly affect that assessment: 1) the extent of the damage and; 2) the cost to repair.

If large portions of the porch and floor framing are damaged, then the condition cannot be described as minor. Besides this, dryrot is not a static condition. It is caused by fungus infection that spreads further into the wood members whenever moisture is present. If left unchecked, small amounts of rot can become very major. This means that replacement of rotted wood is an immediate necessity.

This leads, of course, to the question of expense. If the repair costs are major, then the rot cannot regarded as a minor defect. To resolve this debate, you should get three bids from licensed contractors for replacement of the affected framing. Hopefully, the repairs will not be too costly and you can proceed with the purchase of the home. Otherwise, you should be entitled to a refund of your deposit.

The House Detective:  by Barry Stone, Certified Home Inspector

Dear Barry: Before we bought our home, we hired a home inspector, but he didn’t report any of the major problems in the house. Now we have to repair the plumbing, the electrical wiring, and the roof. When he did the inspection, he said everything was OK, but he was just lying, and we think he may have gotten a big tip from the seller or the agent. He was supposed to be working for us. Why would a home inspector do business this way?  Beatriz

Dear Beatriz: To assume that a home inspector took a bribe is a big jump. When home inspectors fail to report defects, the problem is usually negligence or professional incompetence, not willful collusion with sellers or agents. Unfortunately, there are more than a few home inspectors who are just plain inexperienced or not adequately skilled as inspectors. Because of this, many homebuyers do not receive adequate disclosure. To make matters worse, there are many agents who recommend such inspectors to their clients.

The first thing you should do is have your home reinspected, but this time you should find an inspector with many years of experience and a reputation for thoroughness. To gather some leads, call a few real estate offices and ask for the most “nit-picky” home inspector in town. Tell them you want a home inspector who is known as a “deal breaker.” That’s the misnomer that some agents apply to the best inspectors.

A second report from a truly qualified home inspector will reveal the actual condition of your home and will provide a more complete list of the issues that were missed by the first inspector. Then you can notify the first inspector of your concerns and ask if he has errors and omissions insurance. Hopefully, he will be willing to address your concerns.

The House Detective:  by Barry Stone, Certified Home Inspector

Dear Barry: When we bought our house, the home inspector found no problems with the water heater. On moving day, the gas man had a different story. Instead of lighting the pilot, he capped off the gas and said it is illegal to have a gas water heater in a bathroom. He advised moving it to another location or replacing it with an electric water heater. The seller says he installed the water heater himself and that the previous water heater was in the same location. Is the seller required to move or replace the water heater since he is the one who installed it, or is this our problem?  Lauren

Dear Lauren: Your home inspector should have reported this problem. It is common knowledge among experienced inspectors that gas-fueled water heaters are prohibited in bathrooms. You should notify your inspector of the situation and request a reinspection. The seller, on the other hand, may be liable for installing a water heater without a permit, but most homeowners are unaware that permits are required for water heater replacement.

The purpose of a permit for water heater installations is to insure compliance with pertinent plumbing and safety codes, including the prohibition against placement in a bathroom. If the seller did not obtain a permit, he is in no position to defend the quality of the installation. This does not mean that he is contractually obligated, as a seller, to correct the problem, but you have a reasonable basis for demanding that he do so.

Water heaters are prohibited in bathrooms for two reasons: 1) Faulty exhaust venting can contaminate the air, causing asphyxiation; 2) Inadequate combustion air supply can reduce the oxygen level in the room. Either of these would be very dangerous for someone relaxing in a tub of hot water.

The code requirement is clear. Its intent is to save lives. The gas man was right. The water heater should be moved or replaced with an electric one.

The House Detective:  by Barry Stone, Certified Home Inspector

Dear Barry: Since purchasing our home, numerous cracks have appeared in the walls. Some are as wide as half-an-inch. We’ve also noticed that patching has been done at many of these cracks, indicating that the sellers of the home were aware of the problem but had attempted to hide it. None of this was reported by our home inspector when we were in escrow. How serious do you think this problem is, and what should we do about it?  Thomas

Dear Thomas: Cracks as wide as half-an-inch indicate a major structural problem with the foundation system and/or instability of the soil. The fact that so much movement has occurred since the cracks were patched warrants immediate attention and concern. When symptoms such as these are intentionally masked in order to sell a property, some home inspectors are able to see through the concealment. But when cosmetic repairs are effectively done, it is sometimes possible to prevent discovery of building settlement by a home inspector.

Your first course of action is to notify all parties to the transaction by certified mail. Inform the home inspector, the sellers, their agent, and your agent that there are serious, undisclosed problems with the home and ask that they all come to the property to see what is taking place. And don’t perform any manner of repair work in the meantime. Inform all parties, particularly the sellers, that you want a detailed structural engineering report on the home. The sellers should accept whatever costs are necessary to repair the structural defects, as determined by the engineer. If no one is willing to cooperate, you should enlist the aid of an experienced real estate attorney.

The House Detective:  by Barry Stone, Certified Home Inspector

Dear Barry: : Our laundry is located on the second floor, directly adjacent to the bathroom. Whenever I run the dryer, the bathroom becomes very humid if the door is shut. I’ve also noticed something like black soot on the bathroom walls. I wash it off, but it always comes back. What could be causing the humidity and the soot, and what can I do to resolve this?   Debbie

Dear Debbie: Here are two possibilities: The vent duct for the clothes dryer may be connected to the bathroom vent duct in the attic. This would allow steam from the clothes dryer to enter the bathroom through the ceiling vent.

Another possibility is disconnection of the dryer vent inside the wall or ceiling of the bathroom. This would cause the moisture from your clothes to vent into the wall or ceiling cavities, raising the humidity in that room.

Another concern is that the “soot” on the walls could actually be black mold, caused by the excessive moisture condition. If so, this would raise health concerns for your family.

To evaluate and resolve this situation, three things need to be done:

1)  A licensed contractor should investigate the path of the dryer vent to determine whether it is disconnected or not properly vented to the exterior.

2)  The wood framing should be inspected to determine whether moisture exposure has caused fungus infection and dryrot.

3) The area should be evaluated by a qualified mold inspector to determine if mold is the problem and if mold remediation is needed. Air samples should be taken from wall cavities to determine whether there is mold behind the drywall.