Insurance woes trim inspector numbers

Saturday, November 27th, 2004

Kim Pemberton


Bill Sutherland of the Canadian Association of Home and Property Inspectors says the B.C. chapter requires members to carry insurance.

While home inspectors continue to be in demand there is a concern some inspectors will leave the profession because they can’t get insurance, according to a Canada Mortgage and Housing Insurance report released this month.

Between 1997 and 2003 there were a total of 238 legal claims made against members of the Canadian Association of Home and Property Inspectors, which has approximately 1,040 full-time working inspectors in Canada. Of the legal claims against members, 15 involved B.C. members of the association.

The majority of the claims, nation-wide, concerned structural foundation (49) and water problems (46) that were missed.

These statistics would not include home inspectors who are not affiliated with the association.

“As of the date of this report, fewer companies are available to insure home inspectors for errors and omissions. This is forcing a significant change in the Canadian home-inspection market, with a possible result of a large number of home inspectors leaving the profession,” the report states.

Kamloops home inspector Bill Sutherland, who is also the president of the B.C. chapter of the Canadian Association of Home and Property Inspectors, said there are 150 B.C. members but approximately 200 others in the province who are not affiliated with the association.

The B.C. chapter requires all its members to have general comprehensive liability as well as errors and omissions coverage and provides a group plan. To become a member in the B.C. chapter home inspectors pay a $749 initial membership fee, and must pass an exam.

“We obviously like to think our people are well qualified to do the job,” said Sutherland.

“Home inspectors are in demand and hopefully the new ones coming on stream will meet the standards to do home inspections.”

Sutherland said he is aware of a few horror stories regarding unqualified home inspectors poorly advising clients, and that is why it is helpful for consumers to at least seek the services of an inspector affiliated with the association.

Vancouver lawyer and author of the Condominium Manual, Michael Mangan agrees.

“Home inspectors are not a regulated industry so there’s no authority saying you have to have insurance. There are some non-profit organizations of home inspectors and they’ve basically said we’re going to have certain standards you have to agree to if you want to be a member.”

He added some of these non-profit organizations do arrange group insurance for members in case there are legal claims made against them. Realtors also need to be careful when recommending inspectors, he said.

Mangan noted the Real Estate Council of B.C. advises realtors to always recommend an inspection before purchasing a property, and suggest the names of two or three possible home inspectors.

“That way the realtor is not directing the home owner to a particular inspector but rather directing them to a choice,” said Mangan, who has trained about 18,000 realtors over the years on legal matters.

“I suggest to realtors to talk to inspectors and find out if they are insured and the names of client references and even any unhappy clients the inspector is willing to let a prospective client to talk to. Like anything the more thorough you are the better the result.”

He said if a home inspector is insured it’s likely he or she belongs to an organization, and is keeping up with new developments in the industry.

“Many inspectors have you sign a contract (that) typically includes a statement ‘I will not be liable for any errors, or if I am the most I’m liable for is the return of the fee.’ But the courts look very carefully at these disclaimer clauses and there are various ways of legally defeating them.”

Jim Robar, director of technical research for CMHC, said relief is coming for consumers to better determine whether their home inspector is competent.

By the fall of 2005 this unregulated industry, which can have considerable influence on a consumer’s biggest investment, will be required to perform at least to the minimum of national performance standards.

The standards are currently being developed by members of the Canadian Association of Home and Property Inspectors, the Alliance of Canadian Building Officials Associations, the First Nations National Building Officers Association, and Canada Mortgage and Housing Association, under the chair of the Construction Sector Council. (Municipal building inspectors, who enforce city building codes and regulations, will also benefit from national standard guidelines.)

“This is good news for the consumer,” said Robar.

“Right now for the consumer it (obtaining a qualified home inspector) is very confusing and there is a lot of uncertainty to the competency of home inspectors.”

© The Vancouver Sun 2004


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