One of the home inspection associations in BC have issued yet another propaganda rant that is far from accurate, in an effort to boost their reputation in the BC marketplace.
The facts are that all 4 inspection organizations approved by BC Consumer Protection have basically identical entrance requirements and ongoing education requirements. All of the organizations require formal education followed by field training and then field assessments. On paper there is very little difference between the organizations. As an inspector who moved from ASTTBC to CanNACHI, I can assure you it took some effort to provide all of the paperwork I needed to show that my original certification through ASTTBC met all of the entrance requirements set out by CanNACHI. It was far from a cake walk.
Here are some of the inaccuracies contained within the CAHPI news release.
1) CAHPI actually fought against licensing at times during the process leading up to licensing because they were afraid ASTTBC would be named the sole licensing body (something that the ASTTBC certified inspectors at the time were not even in favour of). ASTTBC and the now defunct BCIPI were the only organizations to consistently work towards licensing.
2) Prior to licensing, the ASTTBC certifying process was the ONLY organization to require field training and assessment BEFORE allowing the inspector to offer services to the public. Organizations like CAHPI did not require field training prior to allowing their inspectors to 'Practice' on the public.
3) The CanNACHI entrance requirements have no similarity to the American InterNACHI entrance requirements. You cannot enter CanNACHI after taking only a internet based exam. (see entrance requirements here).
4) CanNACHI applicants must complete 50 hours of field training BEFORE being granted an Associate Membership level and being able to provide services to the public. They are not able to 'promise' that they will complete this at a later time and start practising immediately.
5) CAHPI indicates in their article that they are advocating for 300 hours of education yet still only require 150 hours for their new inspectors (which is less than other organizations requirements including CanNACHI, that require 200 min.)
6) The Standards of Inspection from all 4 organizations are virtually identical. This is in a large part due to the fact that the standards have more to do with insurance limitations than what we as inspectors should be inspecting to provide a suitable level of protection to the public.
If we as an inspection industry are ever to become a profession, then we need to change some fundamental aspects of home inspection:
A) Remove certification of inspectors from inspector associations.
I have heard horror stories about the certification process within each organization. Inspectors appear to sometimes get through too easily and the requirements to pass do not seem to be consistent even within the same organization.
I firmly believe that BC Consumer Protection should take over the certification of inspectors as a neutral third party.
The inspection associations would then only be responsible for training, marketing, and providing social/networking events to their inspectors. They could also provide seminar opportunities, but I believe that a much higher level of seminars education is available in the marketplace by attending events hosted by professionals. Organizations like TECA, BCBEC, HPO, RCI, & BCSCA all host regular seminars taught by experts.
With the certification removed from the four existing organizations, their is a chance the existing organizations would become obsolete (a needed step) and a new single organization could be created to provide training and social interaction.
B) Remove the ability of agents to recommend home inspectors.
This is by far, the biggest barrier to the BC Consumer being protected during the purchase process. It is estimated that over 90% of all inspectors rely on agent referrals for their livelihood. Organizations like CAHPI are very efficient at developing relationships between their inspectors and Real Estate agents. This was one of the key reasons I decided to not pursue a membership with them when I left ASTTBC.
The home inspector is in a direct conflict of interest with the Real Estate agent. The agents are primarily trying to sell a home and we as inspectors are advising whether that purchase makes sense from a liability standpoint. The agents are looking for inspectors that are quick (under 3 hours for a house and 1 hour for a condo), provide a report on site (so a checklist or computer generated report that provides little in-depth knowledge to the buyer regarding the dwelling), and finally be non-alarming (in the agent's opinion). This agent preferred inspector profile is not conducive to truly understanding the current conditions of a dwelling and leads to a purchaser making uninformed decisions.
Until agent based referrals are stopped, very little will change in the industry and consumers will continue making uninformed decisions.
Showing posts with label Independent Home Inspector. Show all posts
Showing posts with label Independent Home Inspector. Show all posts
Thursday, March 28, 2013
Thursday, March 1, 2012
Should agents make sure paperwork is in order when they list a Multi-Family Dwelling
SENWI inspects a lot of multi-family residences and we are becoming impatient with the general lack of transparency we are encountering by STRATA’s and their representatives (or in brand new buildings, by the developer) during the purchase process. SENWI feels that a purchaser is entitled to receive any and all information available on a given Strata complex, which would typically be available to the STRATA owners as a course of routine or on special request. This would include all minutes (Council and owner meetings), all engineering and mechanical reports, financial records, and any legal action by or against the STRATA. After all, the purchaser is technically now an owner with an accepted offer. That offer just happens to be based on the purchaser being satisfied with a due-diligence process.
Many good purchasers’ agents will include clauses in the purchase contract asking for these types of documents (unfortunately not all agents engage in this practice), but in our experience some of the documents (specifically the engineering and mechanical reports) are often not provided on a timely basis and sometimes not at all. For instance, our inspectors are regularly told that a building envelope report is not available for the STRATA’s we inspect. There are a very few occasions, once we have pressed the issue, that we find this to be the case and instead the problem often seems to be one of laziness or concealment.
It is SENWI’s opinion that the buying public needs to demand laws to better protect a purchaser in this Province. When a multi-family STRATA dwelling is offered for sale, there should be requirements in place to ensure the purchaser is provided access to all required and available documentation. This access should be expedient and not involve days of delay. In an age where hard drive space is cheap, there is no reason why all documents cannot be kept and forwarded in an electronic format at no cost within an hour or two of the request. There are also multiple economic options for electronic transport of large files including FTP sites if necessary. An even better option is to upload all of the STRATA’s documents to a secure website for owner access. Then a purchaser with an accepted offer could be provided login credentials to the website with full access to all of the documentation they need to make an informed and timely decision. Fortunately, the website concept is catching on with some of the larger STRATA’s in the city.
SO, if you are purchasing a multi-family, make sure your agent asks for these documents in your offer and include an expedited time frame (at most 48 hours) that you are to receive these documents.
Many good purchasers’ agents will include clauses in the purchase contract asking for these types of documents (unfortunately not all agents engage in this practice), but in our experience some of the documents (specifically the engineering and mechanical reports) are often not provided on a timely basis and sometimes not at all. For instance, our inspectors are regularly told that a building envelope report is not available for the STRATA’s we inspect. There are a very few occasions, once we have pressed the issue, that we find this to be the case and instead the problem often seems to be one of laziness or concealment.
It is SENWI’s opinion that the buying public needs to demand laws to better protect a purchaser in this Province. When a multi-family STRATA dwelling is offered for sale, there should be requirements in place to ensure the purchaser is provided access to all required and available documentation. This access should be expedient and not involve days of delay. In an age where hard drive space is cheap, there is no reason why all documents cannot be kept and forwarded in an electronic format at no cost within an hour or two of the request. There are also multiple economic options for electronic transport of large files including FTP sites if necessary. An even better option is to upload all of the STRATA’s documents to a secure website for owner access. Then a purchaser with an accepted offer could be provided login credentials to the website with full access to all of the documentation they need to make an informed and timely decision. Fortunately, the website concept is catching on with some of the larger STRATA’s in the city.
SO, if you are purchasing a multi-family, make sure your agent asks for these documents in your offer and include an expedited time frame (at most 48 hours) that you are to receive these documents.
Wednesday, February 22, 2012
Dollar Limit on Subject To Inspection Clauses
I have occasionally come across clients who have accepted an inspection subject clause wording that greatly reduces their ability to pull out of the purchase if they are not satisfied with the findings of the home inspection report.
This clause can be worded similar to:
“Inspection Report against any defects whose cumulative cost of repair exceeds $ entered dollar amount (often $1000) and which reasonably may adversely affect the property’s use or value. The Seller will allow access to this property for this purpose on reasonable notice.”
There are two problems associated with a clause similar to above.
The first problem is that there can be conditions or characteristics uncovered during the home inspection that man not have a high dollar value to address, or in some cases may not even have the ability to assign a dollar value to, but cause the dwelling to be undesirable in the eyes of the purchaser. One example is rodents in the attic. Many people are not comfortable with this style of defect even though the cost of remediation can be in the low hundreds of dollars. If you accept a subject clause limiting your ability to pull out only when deficiencies are over $1000, then if the rodents are the only found issue, you are stuck purchasing a home you are really not comfortable living in. Another example of a characteristic of a home that you may not be able to assign any value to, and that actually caused one of my clients to pull out of their purchase, had nothing to do with the dwelling itself but instead addressed a ‘green belt’ that ran behind the property. During my review with the client at the end of the inspection, I indicated that the ‘green belt’ was in fact being utilized as a dirt bike obstacle course and that the bike activity could be clearly heard inside the house with all doors and windows closed during much of the inspection. When this was reported to the wife, a decision was quickly made that this was not the property for them. They were not interested in their peaceful weekend mornings, drinking coffee on the porch, being interrupted by the howl of dirt bikes going by.
The second problem with this kind of limit being set is that it is difficult for the purchaser to prove a specific dollar value to remediate defects uncovered by the inspection. Often it is pretty clear that the defects are well over the subject limit, but without a quote, how can the buyer prove this. Inspectors are not contractors and cannot possibly provide accurate estimates for each and every defect uncovered. Many inspectors will not provide any estimate at all for remediation while others will try to provide some form of ballparks to the purchaser. So in order to comply with a clause like the above, the buyer would need to bring in contractors to provide fixed quotes on the various defects identified by the report. The subject removal period does not typically grant enough time for this type of activity and so extensions would have to be granted (often a week or more would need to be added).
You can see that neither condition is desirable for the purchaser. Even if it can be proven that the condition found is below the limit set by the clause, the buyer may not be comfortable living in a home with the condition even in a repaired state. Or the buyer may not have the time or facilities to deal with a repair and the delay it may represent to the ability to occupy the home. These are all decisions that should be left to the purchaser and not limited by an inspection clause.
We recommend that buyers not accept a dollar limit in their inspection subjects and instead insist on wording as close as possible to:
“Subject to the Buyer being satisfied with a property inspection to be performed, at the Buyer's expense, by a licensed Home Inspector of the Buyer’s choosing. Access to the property will be provided by the Vendor on reasonable notice and to the extent required to fulfill the Buyer’s due diligence”
The last part of this clause is important as we have occasionally come up against vendors who have refused to provide adequate access to the property. Because there agent (selling agent) has advised then that most inspections take 3 hours or less, they have initially refused access for our 4-8 hour process. The wording of this suggested clause also provides access to the property for secondary inspections that may be warranted based on the original findings of the home inspector.
Bottom line: As a buyer, you should not accept any wording that reduces your ability to legitimately pull out of the purchase should your home inspector uncover a deficiency or condition you are not comfortable accepting.
This clause can be worded similar to:
“Inspection Report against any defects whose cumulative cost of repair exceeds $ entered dollar amount (often $1000) and which reasonably may adversely affect the property’s use or value. The Seller will allow access to this property for this purpose on reasonable notice.”
There are two problems associated with a clause similar to above.
The first problem is that there can be conditions or characteristics uncovered during the home inspection that man not have a high dollar value to address, or in some cases may not even have the ability to assign a dollar value to, but cause the dwelling to be undesirable in the eyes of the purchaser. One example is rodents in the attic. Many people are not comfortable with this style of defect even though the cost of remediation can be in the low hundreds of dollars. If you accept a subject clause limiting your ability to pull out only when deficiencies are over $1000, then if the rodents are the only found issue, you are stuck purchasing a home you are really not comfortable living in. Another example of a characteristic of a home that you may not be able to assign any value to, and that actually caused one of my clients to pull out of their purchase, had nothing to do with the dwelling itself but instead addressed a ‘green belt’ that ran behind the property. During my review with the client at the end of the inspection, I indicated that the ‘green belt’ was in fact being utilized as a dirt bike obstacle course and that the bike activity could be clearly heard inside the house with all doors and windows closed during much of the inspection. When this was reported to the wife, a decision was quickly made that this was not the property for them. They were not interested in their peaceful weekend mornings, drinking coffee on the porch, being interrupted by the howl of dirt bikes going by.
The second problem with this kind of limit being set is that it is difficult for the purchaser to prove a specific dollar value to remediate defects uncovered by the inspection. Often it is pretty clear that the defects are well over the subject limit, but without a quote, how can the buyer prove this. Inspectors are not contractors and cannot possibly provide accurate estimates for each and every defect uncovered. Many inspectors will not provide any estimate at all for remediation while others will try to provide some form of ballparks to the purchaser. So in order to comply with a clause like the above, the buyer would need to bring in contractors to provide fixed quotes on the various defects identified by the report. The subject removal period does not typically grant enough time for this type of activity and so extensions would have to be granted (often a week or more would need to be added).
You can see that neither condition is desirable for the purchaser. Even if it can be proven that the condition found is below the limit set by the clause, the buyer may not be comfortable living in a home with the condition even in a repaired state. Or the buyer may not have the time or facilities to deal with a repair and the delay it may represent to the ability to occupy the home. These are all decisions that should be left to the purchaser and not limited by an inspection clause.
We recommend that buyers not accept a dollar limit in their inspection subjects and instead insist on wording as close as possible to:
“Subject to the Buyer being satisfied with a property inspection to be performed, at the Buyer's expense, by a licensed Home Inspector of the Buyer’s choosing. Access to the property will be provided by the Vendor on reasonable notice and to the extent required to fulfill the Buyer’s due diligence”
The last part of this clause is important as we have occasionally come up against vendors who have refused to provide adequate access to the property. Because there agent (selling agent) has advised then that most inspections take 3 hours or less, they have initially refused access for our 4-8 hour process. The wording of this suggested clause also provides access to the property for secondary inspections that may be warranted based on the original findings of the home inspector.
Bottom line: As a buyer, you should not accept any wording that reduces your ability to legitimately pull out of the purchase should your home inspector uncover a deficiency or condition you are not comfortable accepting.
Monday, February 6, 2012
Agent admits it is not a good idea to choose an inspector that the agent recommends
Good Morning America interview a Real Estate Agent who confirm you may not be served by an agent refered inspector.
Good Morning America Video
Good Morning America Video
Tuesday, January 17, 2012
What kind of inspection report should you insist on?
OK, I have advised that to try to lower your potential liability in buying into multi-family-dwellings as much as possible you need to:
1) Make sure you have the Condo inspected
2) Make sure you choose an inspector who takes the time to perform a thorough evaluation of not just the purchase unit, but also the building envelope/exterior, roof, parkade, and all common mechanical areas.
3) Most important of all, look for an inspector who’s ‘process’ includes a detailed review of all engineering reports commissioned by the Strata in the last 5-10 years.
I would like to now talk about the type of report the buyer should ensure their chosen inspector provides.
By far the most common form of report used by home inspectors North America wide is the ‘Check List’ report. This takes on many different flavours and can even be included in a fancy publication like the Home Reference Manual which looks impressive but at its core is only a 9 page check-list-format report. The rest of the binder is boiler plate text that may or may not be relevant for the home you are purchasing and often does not describe a given defect with enough information to be truly informative in my view.
The fundamental problem with checklist style reports is that they have been designed to be of as little effort as possible for the inspector to fill out while at the same time protecting the INSPECTOR from liability. They typically do not go out of their way to inform you the PURCHASER and ensure YOU are protected from liability. There is physically not enough room to do so on most of these styles of reports as they often have limited opportunity to add enough commentary to fully describe a defect or deficiency. Inspectors often like this style of report because it takes very little skill, thought, or time to fill them out. Because you do not have to explain the deficiency, you can rush through the home with the only purpose being of identifying what may be a problem on the checklist and then state ‘further evaluation recommended’. Now of course most purchasers follow that advice- right? The reality is that very few purchases take additional steps, beyond the home inspection, to determine the current condition of the dwelling.
The final fundamental problem with checklist style reports in my view is that they never contain photos. Photos are the single most important tool that a good inspector has of portraying information to their client. Yet for a majority of the industry, they are not part of an inspector’s process. How can they be? When the average inspector provides a carbon copy checklist report on site and then never sees the purchaser again, how can photos be included? The answer is they can’t and typically aren't. Those that do will often just provide the client with a memory card or CD/DVD of raw unedited photos with no commentary. There is also a whole segment (significant) of the inspection industry where the inspector is scared to provide photos. A regular topic of discussion on inspector forums and at association meetings is around the concept that an inspector could be found liable for a defect shown in a photo but not referenced in the inspectors report.
Computer generated ‘checklist style’ reports are a slight step up from a hand written checklist as they can allow more extensive commentary and the addition of narrated photos, BUT only if the inspector is willing to put in the hours of time to modify the out of the box software template and then the extra time required on a per inspection basis to create the report at site or back in their office. Unfortunately, many don’t.
You can see that I am not a fan of checklist reports. I wish I was, they are much faster and easier than the reports I utilize in my business. Not many inspectors relish the idea of spending a day behind a desk creating a report and I am no exception. I am always looking for ways to decrease the report production time but always ensure that my number 1 priority is informing and protecting the client. In my opinion the best inspection report is a narrative report created specifically for the inspected dwelling that is augmented with lots of annotated photos. This is much the same format used by most engineers. The process is intense in the time frame typically allotted for subject removals and usually takes between 10-15 hours, but this has been the only way I have personally found that allows me to ensure that my client is as fully informed as possible.
1) Make sure you have the Condo inspected
2) Make sure you choose an inspector who takes the time to perform a thorough evaluation of not just the purchase unit, but also the building envelope/exterior, roof, parkade, and all common mechanical areas.
3) Most important of all, look for an inspector who’s ‘process’ includes a detailed review of all engineering reports commissioned by the Strata in the last 5-10 years.
I would like to now talk about the type of report the buyer should ensure their chosen inspector provides.
By far the most common form of report used by home inspectors North America wide is the ‘Check List’ report. This takes on many different flavours and can even be included in a fancy publication like the Home Reference Manual which looks impressive but at its core is only a 9 page check-list-format report. The rest of the binder is boiler plate text that may or may not be relevant for the home you are purchasing and often does not describe a given defect with enough information to be truly informative in my view.
The fundamental problem with checklist style reports is that they have been designed to be of as little effort as possible for the inspector to fill out while at the same time protecting the INSPECTOR from liability. They typically do not go out of their way to inform you the PURCHASER and ensure YOU are protected from liability. There is physically not enough room to do so on most of these styles of reports as they often have limited opportunity to add enough commentary to fully describe a defect or deficiency. Inspectors often like this style of report because it takes very little skill, thought, or time to fill them out. Because you do not have to explain the deficiency, you can rush through the home with the only purpose being of identifying what may be a problem on the checklist and then state ‘further evaluation recommended’. Now of course most purchasers follow that advice- right? The reality is that very few purchases take additional steps, beyond the home inspection, to determine the current condition of the dwelling.
The final fundamental problem with checklist style reports in my view is that they never contain photos. Photos are the single most important tool that a good inspector has of portraying information to their client. Yet for a majority of the industry, they are not part of an inspector’s process. How can they be? When the average inspector provides a carbon copy checklist report on site and then never sees the purchaser again, how can photos be included? The answer is they can’t and typically aren't. Those that do will often just provide the client with a memory card or CD/DVD of raw unedited photos with no commentary. There is also a whole segment (significant) of the inspection industry where the inspector is scared to provide photos. A regular topic of discussion on inspector forums and at association meetings is around the concept that an inspector could be found liable for a defect shown in a photo but not referenced in the inspectors report.
Computer generated ‘checklist style’ reports are a slight step up from a hand written checklist as they can allow more extensive commentary and the addition of narrated photos, BUT only if the inspector is willing to put in the hours of time to modify the out of the box software template and then the extra time required on a per inspection basis to create the report at site or back in their office. Unfortunately, many don’t.
You can see that I am not a fan of checklist reports. I wish I was, they are much faster and easier than the reports I utilize in my business. Not many inspectors relish the idea of spending a day behind a desk creating a report and I am no exception. I am always looking for ways to decrease the report production time but always ensure that my number 1 priority is informing and protecting the client. In my opinion the best inspection report is a narrative report created specifically for the inspected dwelling that is augmented with lots of annotated photos. This is much the same format used by most engineers. The process is intense in the time frame typically allotted for subject removals and usually takes between 10-15 hours, but this has been the only way I have personally found that allows me to ensure that my client is as fully informed as possible.
Friday, January 13, 2012
How can I reduce the potential liability of buying a Condo
In my last post I was prompted to comment on the liability that can be present when buying multi-family-dwellings after reading two articles from the Vancouver Courier.
I will now try to give provide the reader tools for a thorough due diligence process to hopefully avoid a large portion of the potential liability that exists with these purchases.
My number one piece of advice is to have the unit inspected. This may seem like self serving advice, and in part it may be, but it is imperative that you have a Condo inspected before purchasing if you have any chance of avoiding liability. As this CMHC research report shows, many of the people that ran into financial difficulty after purchasing a Condo, did so because they did not have the Condo first inspected (in the studdy this represented 29 of the 40 case studies!).
The Vancouver Courier articles discussed how you cannot rely on the documents provided by the vendor and I cannot agree more. First of all, the commonly provided 2 years of minutes is not nearly a long enough time frame to properly evaluate the buildings performance. But it also is far too short of a period of time to properly evaluate the performance of the STRATA and PROPERTY MANAGER to ensure they are capable of properly managing the best interests of the building and owners. This is often a much larger area of liability for a potential buyer than that represented by the structure itself and a process that is often overlooked. A poorly managed and maintained building significantly escalates the costs of repairs and often the complexity and duration of those repairs.
Finally, another reason to not rely on minutes or property disclosure statements (PDS) is that they rarely reflect an accurate assessment of the property. A PDS is often not truthful and as I wrote about on another blog entry, there does not seem to be a reasonable way to hold the vendor responsible for what they fill out in the PDS. Likewise, Strata Minutes seldom tell the whole storey. Strata Council are of course owners and are often reluctant to divulge any information in minutes when they know that information could lower the values of the homes they own and make it difficult for them to sell in the future. They participate in the practice of “In Camera” meetings where no official minutes of what is discussed are kept or made available to the public and instead the discussions and resulting actions are “off the record”. This is of course illegal but regularly occurs in Strata’s across the lower mainland.
So, what can a buyer do to reduce their potential liability? I mentioned above that my number one recommendation is to have the unit inspected. Well my second piece of advice is to choose the ‘right’ inspector.
When the average time spent on site by a home inspector for an apartment style Condo is 1.5 hours or less, it is important to realize that this type of inspection will often not be thorough enough to have any meaningful impact on the potential liability you face as a purchaser. Further, the checklist style reports, usually provided by this style of inspector, are often unable to sufficiently inform the purchaser on any deficiencies or liabilities that this brief inspection uncovered.
Instead, a purchaser should look for an inspector that is going to take the time to perform a thorough inspection of not just the unit but also the building envelope/exterior, roof, parkade, and all common mechanical areas. Most important of all, look for an inspector who’s ‘process’ includes a detailed review of all engineering reports commissioned by the Strata in the last 5-10 years.
As home inspectors, we are generalists that if correctly trained are able to usually identify problems or the risk of problems. But we are only performing a visual inspection which has many limitations to defining the true condition of a building. A reputable building envelope firm will go beyond visual inspection and will disassemble components or perform some destructive testing to determine the full condition of the building enclosure. By including the review of these detailed engineering reports, an inspector can then provide a lot more insight to a potential purchaser to allow them to make a more informed decision.
In my next entry, I will discuss the type of report you should ensure your inspector provides and why that style of report is going to benefit you.
I will now try to give provide the reader tools for a thorough due diligence process to hopefully avoid a large portion of the potential liability that exists with these purchases.
My number one piece of advice is to have the unit inspected. This may seem like self serving advice, and in part it may be, but it is imperative that you have a Condo inspected before purchasing if you have any chance of avoiding liability. As this CMHC research report shows, many of the people that ran into financial difficulty after purchasing a Condo, did so because they did not have the Condo first inspected (in the studdy this represented 29 of the 40 case studies!).
The Vancouver Courier articles discussed how you cannot rely on the documents provided by the vendor and I cannot agree more. First of all, the commonly provided 2 years of minutes is not nearly a long enough time frame to properly evaluate the buildings performance. But it also is far too short of a period of time to properly evaluate the performance of the STRATA and PROPERTY MANAGER to ensure they are capable of properly managing the best interests of the building and owners. This is often a much larger area of liability for a potential buyer than that represented by the structure itself and a process that is often overlooked. A poorly managed and maintained building significantly escalates the costs of repairs and often the complexity and duration of those repairs.
Finally, another reason to not rely on minutes or property disclosure statements (PDS) is that they rarely reflect an accurate assessment of the property. A PDS is often not truthful and as I wrote about on another blog entry, there does not seem to be a reasonable way to hold the vendor responsible for what they fill out in the PDS. Likewise, Strata Minutes seldom tell the whole storey. Strata Council are of course owners and are often reluctant to divulge any information in minutes when they know that information could lower the values of the homes they own and make it difficult for them to sell in the future. They participate in the practice of “In Camera” meetings where no official minutes of what is discussed are kept or made available to the public and instead the discussions and resulting actions are “off the record”. This is of course illegal but regularly occurs in Strata’s across the lower mainland.
So, what can a buyer do to reduce their potential liability? I mentioned above that my number one recommendation is to have the unit inspected. Well my second piece of advice is to choose the ‘right’ inspector.
When the average time spent on site by a home inspector for an apartment style Condo is 1.5 hours or less, it is important to realize that this type of inspection will often not be thorough enough to have any meaningful impact on the potential liability you face as a purchaser. Further, the checklist style reports, usually provided by this style of inspector, are often unable to sufficiently inform the purchaser on any deficiencies or liabilities that this brief inspection uncovered.
Instead, a purchaser should look for an inspector that is going to take the time to perform a thorough inspection of not just the unit but also the building envelope/exterior, roof, parkade, and all common mechanical areas. Most important of all, look for an inspector who’s ‘process’ includes a detailed review of all engineering reports commissioned by the Strata in the last 5-10 years.
As home inspectors, we are generalists that if correctly trained are able to usually identify problems or the risk of problems. But we are only performing a visual inspection which has many limitations to defining the true condition of a building. A reputable building envelope firm will go beyond visual inspection and will disassemble components or perform some destructive testing to determine the full condition of the building enclosure. By including the review of these detailed engineering reports, an inspector can then provide a lot more insight to a potential purchaser to allow them to make a more informed decision.
In my next entry, I will discuss the type of report you should ensure your inspector provides and why that style of report is going to benefit you.
Wednesday, January 11, 2012
Risk associated with the purchase of Multi-Family-Dwellings in Greater Vancouver
I recently came across these Vancouver Courier articles (Condo Pitfalls & Condo Nightmares). They do a fairly accurate and thorough job of discussing the pitfalls that buyers face when buying condo style apartments and townhouses in the Vancouver region.
We have found that too many buyers in the market today do not truly understand the liability they face when buying into multi-family. We often get comments like “That is the Strata’s responsibility; we do not have to worry about that”. We have heard of many people that have gone bankrupt or lost their Condo because of special assessments for unexpected repairs that they could not afford. I have never heard of this happening to buyers of single-family-dwellings.
The facts are that the purchase of any multi-family-dwelling typically represents a significantly higher level of possible liability over the purchase of an average single family home. One of the key reasons for this is the fact that most multi-family-buildings are quite a bit taller and larger than a typical single family house and as such have a much greater exposure to wind driven rain. This higher exposure will then accentuate problems with a water shedding surface with poor design and maintenance.
These articles somewhat suggest that the problem may be behind us or is confined to buildings of the 80’s and 90’s. Nothing could be further from the truth. Many studies, including those by CMHC, state that there has only been an approximate 50% of the buildings that have or will have problems fixed to date. This leaves tens of thousands of units that are still out their in need of remediation.
As the articles discuss, even a fully or partially remediated building does not always significantly lower your liability. Many early attempts at remediation did nothing to change the actual design of the water shedding surfaces and are as such destined to repeat the cycle of repair and the extreme costs to the owners that result from those repairs.
Brand new buildings are also not a guarantee of quality or lower liability. Our inspections have uncovered many buildings 1-5 year old and still under warranty that have water ingress into parkades, roof top decks, poorly detailed and back slopping flashings, etc, the list goes on. Just because a building is constructed post 2000 does not mean you do not have to still be careful in your selection and diligence.
You often can also not rely on the fact that there is a warranty in place. We have come across an alarming number of Strata’s that have not commissioned a full building envelope assessment prior to the 5yr Water Ingress Warranty expiry and as such lost out on the opportunity to claim problems that were present. And those that do file a warranty claim, and are successful in their claim, can often be met with short term repairs done by the developer in order to get past the warranty period. Often these short term repairs saddle the owners with a lifetime of accelerated maintenance and increased cost of ownership going forward.
So it is very important to perform due diligence when purchasing a multi-family-dwellings and I will discuss ways to do so in upcoming blog posts.
We have found that too many buyers in the market today do not truly understand the liability they face when buying into multi-family. We often get comments like “That is the Strata’s responsibility; we do not have to worry about that”. We have heard of many people that have gone bankrupt or lost their Condo because of special assessments for unexpected repairs that they could not afford. I have never heard of this happening to buyers of single-family-dwellings.
The facts are that the purchase of any multi-family-dwelling typically represents a significantly higher level of possible liability over the purchase of an average single family home. One of the key reasons for this is the fact that most multi-family-buildings are quite a bit taller and larger than a typical single family house and as such have a much greater exposure to wind driven rain. This higher exposure will then accentuate problems with a water shedding surface with poor design and maintenance.
These articles somewhat suggest that the problem may be behind us or is confined to buildings of the 80’s and 90’s. Nothing could be further from the truth. Many studies, including those by CMHC, state that there has only been an approximate 50% of the buildings that have or will have problems fixed to date. This leaves tens of thousands of units that are still out their in need of remediation.
As the articles discuss, even a fully or partially remediated building does not always significantly lower your liability. Many early attempts at remediation did nothing to change the actual design of the water shedding surfaces and are as such destined to repeat the cycle of repair and the extreme costs to the owners that result from those repairs.
Brand new buildings are also not a guarantee of quality or lower liability. Our inspections have uncovered many buildings 1-5 year old and still under warranty that have water ingress into parkades, roof top decks, poorly detailed and back slopping flashings, etc, the list goes on. Just because a building is constructed post 2000 does not mean you do not have to still be careful in your selection and diligence.
You often can also not rely on the fact that there is a warranty in place. We have come across an alarming number of Strata’s that have not commissioned a full building envelope assessment prior to the 5yr Water Ingress Warranty expiry and as such lost out on the opportunity to claim problems that were present. And those that do file a warranty claim, and are successful in their claim, can often be met with short term repairs done by the developer in order to get past the warranty period. Often these short term repairs saddle the owners with a lifetime of accelerated maintenance and increased cost of ownership going forward.
So it is very important to perform due diligence when purchasing a multi-family-dwellings and I will discuss ways to do so in upcoming blog posts.
Sunday, February 13, 2011
Why does SENWI take so long?
I was recently at another inspection association's seminar. At a break I got to talking with one of that association's longest members and I mentioned that I can often take up to 300 photos when looking at a property. He laughed and said - "How long does that take?" I replied that I am often at a house for 5-7 hours. He made the typical claim of how long he had been in the field and that he is looking for the 'big ticket' items only and implied that any inspector worth a grain of salt could do that in under 3-1/2 hours.
SO why does SENWI take longer?
Well first of all, our clients are usually with us (something uncommon in the industry) during the inspection. This allows them to be better informed regarding the condition of the dwelling and does take on average a hour or two longer per inspection depending on their level of interest and questions. It allows the buyer to understand the defect because they have seen it with their own eyes.
Next, we are not looking for just the 'big ticket items'. Our reports present a majority of the conditions we find in the house that could be improved upon. Who are we, as inspectors, to decide up front what is important to you as a buyer? I have had many client choose not to buy a home not because of the dollar value of a problem, but because they were not willing to deal with a specific problem. That is and should be your prerogative as a buyer.
Lastly, I suspect that we, at SENWI, take a bit more time to look at things than inspectors who take less time on site. We open up most access panels, we will move a couch or chair to see behind, we will clear out a closet to get into an attic or crawlspace and we will look behind that picture to see what it may be hiding (where incidentally many electrical distribution panels are found). We almost always inspect a roof from its surface or multiple eaves-trough locations (many in the industry just look at it from grade with binoculars), we will crawl over a fence in order to get into an otherwise inaccessible point of the back yard. This all takes time and increases our ability to report on deficiencies which in turn reduces your liability as a buyer.
Could we inspect the roof from grade and get a good idea on the OVERALL condition and age? Yes, but what about all the smaller details that may not be a condition of the roof issue, but more where the roof meets other parts of the dwelling, locations that may be allowing water into the wall or roof cavities. These can only be examined from arm's length and I do not know anyone with arms long enough to reach a roof from the ground level.
So, yes we could perform our inspections without the buyer present, we could state that areas are not accessible because of storage or fences, we could look at roofs from grade, we could leave our cameras in our truck, we could fill out a pre-printed checklist on site (hard copy or software driven), … We would still meet the legal requirements of our contract and our certifying body's Standards of Inspection. But we do not want to, we want to provide a service that is better than that, one that we can be proud of, one that PROTECTS YOU - not us.
Subscribe to:
Posts (Atom)