Home Inspector Oversight – “It’s been a nightmare, like I wish I’d never set foot in this house. I just wanted a place to live.”

rotten

“Buyers like Lindsay Denton, a 39-year-old single mother, are finding out the hard way they have little recourse if they believe a home inspector misses an obvious, visible defect. Complaints to the inspectors’ association might cost an inspector the loss of his or her license for a week, but financial settlements are only awarded through the courts.
Denton was battling breast cancer when she bought a $750,000 home in East Vancouver after an inspector’s report found no structural defects.
“It’s been a nightmare, like I wish I’d never set foot in this house. I just wanted a place to live,” Denton said.
“It doesn’t mean anything that they have a license or that they have errors and omissions insurance.”
Denton has filed a lawsuit against inspector Christopher Stockdale, who used to be the president of the Canadian Association of Home and Property Inspectors of B.C.
In her notice of civil claim, she alleges Stockdale failed to follow the standard practices of his association.
Denton claims he missed the fact that her home was structurally unsound, with extensive water damage, a hole in the roof, asbestos in the air ducts, and visibly rotten sill plates and posts.
She also claims Stockdale examined her one-storey roof with binoculars instead of climbing up with a ladder and failed to carry a tool to prod any potentially rotten wood.
Denton said she discovered some rot in the structure after the tenants in her basement suite moved out.
“I went downstairs to paint and I touched the wall and it was wet and soft and the wood on top of the foundation was rotten,” she said. “It was crumbling away.”
The crumbling wood Denton refers to is the sill plate, which sits underneath the posts that hold up the structure. She said the inspector should have seen rotten posts next to the furnace he inspected.
Inspections ‘do not constitute a guarantee’
In her claim, Denton says Stockdale of Home Sweet Home Inspections returned to her house, looked at the problems and offered to refund her the $565 inspection fee.
She claims she told Stockdale he also should have seen rot on the side of her house.
“I’ve borrowed $40,000 and I’ve spent more, and I’m looking for another $100,000 to fix my suite because it’s been 18 months without being rented.”
Denton says she’s struggling to make her mortgage payments and is waiting for another inspector’s report to assess the defects allegedly missed in her home, a report which will go before a judge in her civil case.


It’s almost impossible for homeowners to get compensation if something is missed during a home inspection, despite new regulations introduced by the B.C. government in 2009 requiring all home inspectors to be licenced and insured.”
– from ‘Buyers left with big bills when home inspectors miss defects’, CBC News, 21 Feb 2013[hat-tip 4SliceofCheese]

During a speculative mania, construction and inspection standards drop, as the abnormal pace of price gains paper over shoddy work. People are forgiving of all sorts of deficits as long as they know they are accumulating equity at a rapid pace. When the tide goes out, they look for people to blame. Ironically, that often leads to standards being tightened at the very time when such measures are least needed.
As an aside: If you “just want a place to live”, why buy a house where you need to rent out your basement to make the mortgage payments?
– vreaa

54 responses to “Home Inspector Oversight – “It’s been a nightmare, like I wish I’d never set foot in this house. I just wanted a place to live.”

  1. This woman is learning an important (and expensive) lesson about average prices. Unless you’re spending the average amount on building supplies and contractors, your home isn’t going up at the average price. That includes teardowns/new builds. Some people will spend less and some will spend more, some will see greater than average appreciation and some lower, but to greedily look at those average prices climbing without also looking at how busy Home Depot’s parking lot is? That’s a mistake.

    As I said in a previous thread, this woman has undoubtedly moved on from getting ripped off by a home inspector to getting ripped off by a contractor. And what’s with the breast cancer reference? Am I supposed to feel sorry for her because, in the midst of perhaps a fight for her life, she decided to buy a fixer-upper and become a cash-strapped, house-poor amateur landlord and it didn’t work out? Talk about going all in…

    • No worries, Ralph… The’Justice’Minister’s got your back or should that be, “Crack”… with a bold new plan to ‘out’ Shacks. [CrowdSourced, of course.]

      [CBC] – Crack shack reporting: B.C.’s Justice Minister says a new agency will allow people to report so-called crack shacks

      http://www.cbc.ca/player/News/Canada/BC/ID/2337585999/

      [NoteToEd: One wonders, as trading conditions continue to deteriorate – will unscrupulous vendors target their neighbourhood comps with spurious reports of CrackShacking or would that be counter-productive?… Will BC HomeInspectors be forced to up their game by introducing compulsory testing for precursors/narcotics trace residues?]

      • Ralph Cramdown

        It seems the agency is as yet unnamed. May I suggest Neighbours Against Negatives, Narcotics, Yobs, Drop a Dime! … NANNYDAD
        Sounds like they’re heading towards ASBOs to me.

  2. If home inspectors were subject to the same standards as financial auditors, they would be responsible for any material error in their assessment. If a previously undisclosed material error is found in public company financial statements after an audit report has been released, and the auditor should have been able to detect that error, the auditor becomes responsible for the entire loss of market value of that security,should one occur ( yes, this can be billions of dollars, since the auditor is liable for the loss to all shareholders). It is the auditors responsibility to charge a fee representative of the costs of such an engagement. Thus type of liability is in place for the benefit of the market and generally’ although expensive is in my opinion worth while. What boggles my mind us why other professional groups aren’t subject to the same standards: bond rating agencies, home inspectors, even the news. Generally’ I feel that whenever a group has the ability to influence another group with “an opinion” they should be held legally accountable for any fallout caused by people relying in that opinion.

  3. An I crazy, or does it seem like a good idea to offer a ‘bounty’ – five per cent per minor defect, ten per cent per major, thirty per cent for deal dealer, to the home inspector? It’s one way to get a diligent appraisal.

    And when the bounty gets too high, you pay, thank ’em for their time, and bail.

    Warning – I could be crazy.

    • Of course I meant “deal breaker”.

      And “am”.

      Ha.

    • It’s a great idea.
      My favourite home inspection stories are the ones that involve skilled inspectors like Ed W. standing across the road from a property, before even entering it, and pointing out major defects along the lines of: “This house is built on a stream. Do we need to go any further?” …. ‘ding!’… deal breaker, pay him his bounty and take him to the next property of interest.

    • Brilliant, in fact.

    • They have a standard check list already. They just don’t use it sometimes. Of course, the prospective buyer needs to do a little look around as well. It is called due diligence or personal responsibility. All it takes is a screwdriver, a flashlight and a small paper face mask. In most cases you can unearth the basic problems yourself with very little effort.

  4. “…bought a $750,000 home in East Vancouver ” “I just wanted a place to live.”

    Riiight….

    • Exactly.
      Place to live: $350K
      Speculative financial instrument component of property: $400K
      Total price: $750K

      Spec mania ends
      Financial instrument component of house disappears
      Reverts to value as a home: $350K
      Plus overshoot out of seller panic and dearth of buyers: $300K

    • There is enough for the horror story regardless of the faulty home inspection – “a 39-year-old single mother…was battling breast cancer when she bought a $750,000 home in East Vancouver” – what was she thinking.

  5. What a nightmare. Those areas of rot would have been simple to detect. I hope she wins her lawsuit.

    My guess is that the stone cladding added to the lower level of the front of the house (shown near the start of the CBC clip), which would not have been original to an Edwardian cottage but added by a former owner, probably trapped water behind it. A competent or caring inspector would know the risk of such a DIY modification, and would have given the walls behind that cladding extra attention.

    It’s definitely caveat emptor out there. And we’ve got an entire RE industry, with multiple associated players, that does its best to dazzle people with surfaces. House smells a bit musty? Bake some chocolate chip cookies for the open house.

    Anyone contemplating a house or condo purchase would be very well served by first taking a half-day course in DIY home inspection. Along with a ‘Basic Finances 101’ workshop. It’s crazy that most people step into the biggest purchase decision of their lives with so little knowledge.

    • ..”half-day course in DIY home inspection”.

      Bloody good idea.

    • Speaking of CDN.75M EastVan TearDowns/HomeHorrorShows, CaveatEmptor… ‘Inspectors’Clouseau… and autodidactic approaches to BigDecisions… what better place to attach a little voyeuristic FridayMorningFun than a remark by VREAA’s very own architectural conservationist and HomeImprovementGuru…

      DearReaders… It’s AstonishingCompsFerYerBucksTime! …courtesy of the NYT [a SlideShow of assorted USD750K Yanqui properties including some TastyVintageAbodes]…

      http://tinyurl.com/bympyr4

  6. That chocolate chip cookie thing totally works. Some of my stuff was a little musty after the move. I baked cookies and VOILA! instant Mom’s kitchen. I’ll even publish the recipe if you guys like, made me totally famous in Massett.

  7. She realized back then that the guy didn’t check the roof properly and paid him 500$ without asking him to do his job and now she made a mistake DUH! If you can’t manage your wallet for 500$ you shouldn’t think you have what it takes to spend 750k$ on an investment! However, if she got a mortgage on that amount we shouldn’t pity her. Yep there’s still quiet an income behind it (maybe a single dad cash cow)….

  8. “Where prices are concerned, the CMHC [Canadian Housing and Mortgage Corp.] expects an average $356,500 to $378,500 this year, and $363,800 and $390,800 in 2014.
    Based on the “point forecast,” that would be a gain of 1 per cent this year and 2.7 per cent next year.”

    – from ‘House prices to continue climbing, CMHC says’, Michael Babad, 22 Feb 2013

    Should our government backed mortgage insurance corporation be in the business of publicly predicting housing prices?
    Why?
    What if they’re horribly wrong?
    Would they be accountable to market participants for those predictions?

    • Well, given what they do, they certainly need to privately predict home prices. Once they’ve done the work, given that they’re working for me, I don’t think it’s unreasonable for that work product to be made public.

      Of course, I’d give the number a bit more credence if their board of directors consisted of insurance specialists and housing economists rather than builders and cheerleaders, but that’s a somewhat different issue.

      My father has a book of house plans, maybe an inch thick, that was published by CMHC way back when (’70s, probably). Plan, elevation and profile, and you can see which way they’re designed to optimally face by the layout of the windows etc. Solid designs, reasonably economical to construct, good use of interior space… The CMHC used to do a lot more useful stuff than it does now. I look at typical builder designs for tract homes and can tell just by looking that the faux dormers, multiple rooflines and various recessed or proud wall features make for a house that’s more expensive to construct, to heat and to maintain than would a simpler design. Ornament for ornament’s sake, and done badly.

  9. pricedoutfornow

    You’re right, vreaa, I think we will see many more of these sob stories trotted out now that house prices are not racing higher at stunning rates. People in Vancouver may now be realizing “WTF was I thinking, spending nearly $1 million on a mouldy, rat-infested property that is slowly sinking in value every year?” It’s not so much fun anymore when you open your annual assessment and see that it’s dropped, rather than gone up.
    In many parts of the world, a $750k house would be a pretty decent place to live. In Vancouver, this is most certainly a crappy teardown. This city has been drinking the Kool-Aid for too, too long.
    PS-And yeah, what was she thinking, if she can’t afford to buy the house without renting out the basement suite, why bother? Why are people in BC so eager to have people living in their basements? This is no way to “own” a house-you might as well be renting in a multi-family housing complex for all the quality of life this gives you. Insane.

    • “In many parts of the world, a $750k house would be a pretty decent place to live.”

      See above, PricedOut…. embedded in Froogle’s contribution….

  10. putting the issue of whether she can afford it aside, I think the fact that the inspector did not do his job properly is a serious one and I hope she can recover damages through courts. That’s what the inspector’s insurance is for. offering the inspection fee refund of 500 dollars is a complete joke in this situation

  11. moustache and eyewear

    Watching or reading CBC is the true horror. Considering the source of this information, is the story legit? Who do we have to verify Mainstream Media?

    • Why would they even make this crap up? There are a million of these stories out there. I have no sympathy whatsoever. This lady was not too sick to still be greedy. Does that qualify her for a big settlement after the fact?

      • How do we know she was greedy? Especially if so many forces were telling her she might be being prudent?

      • Ralph Cramdown

        Well, we don’t know her entire financial situation, but not too many advisors would say it’s prudent for a household with only one adult to buy property that needs an income suite to comfortably pay the mortgage. Too many things can go wrong and, oh look, one of them did.

      • Perhaps there is a difference between greedy and very foolish, Epte. Do you think this gal is prudent, sensible, balanced, clear headed, rational, logical or bright? What single mother backs herself into a corner with a 3/4 million dollar obligation just three innings following the worst financial crisis the world has ever witnessed?

        Sorry…she is greedy and a speculator. I have no sympathy.

  12. There will be sob stories of every type as this mania unwinds.

    The evaporation of wealth will be said to be the fault of every conceivqble party except for those who actually signed the contracts and made the gambles.

  13. As the VREAA host said above, “To be fair to her, though, she clearly made a decision at a time of stress, and bought into the ubiquitous local belief that buying was responsible and a good way to build equity.”

    I sympathize with her as well. Maybe she was very naive and trusting about the home purchase and the home inspection, as well as being perhaps — how shall I say — a bit preoccupied, being a single mother with cancer!

    Also, given the speculative mania, maybe she was having/would have had trouble finding a rental where she could feel secure about not being turfed out by a landlord watching the market? For single mothers with children, this might be especially important. And what person in the middle of cancer treatment wants to have to worry about moving?

    Clearly, she’s in a terrible situation now, but let’s not forget that the MSM has relentlessly advertised that doing what she did (buying a house) is a WISE thing. The government and the banks, until recently, seemed to concur and encourage this, of course. Perhaps by buying a house she was even trying to secure her children’s financial future, in case she didn’t survive the cancer? Clearly she didn’t know the facts, but how many others out there are like her?

    With Froogle, I hope she wins her lawsuit, and I hope the inspector never works again.

    There’s not nearly enough frank discussion, much less action (what I’d like to see is focused rage aimed on solutions, actually) in BC about sloppy building practices (lots of commenters here recently were talking about the leaky condo situation continuing unabated, but have we seen coverage of this in the local media?). And forget about remedies for consumers.

    • Epte, I’m afraid they don’t do “focused rage” in Vancouver anymore (with the possible exception of visiting VerbalWrath on HaplessBaristas for inaccurately concocting frothy beverages)…

      HarlemShake, however…

      http://tinyurl.com/b2e3szf

      [NoteToEd: Seasonal Affective Disorder combined with prolonged BasementDwelling are clearly taking their toll…]

    • There are more options than a detached for families, including condos and townhomes, many nice and well-run, perhaps not in VanEast though…

      She bought a detached low density house with a suite close to the core. If she’s looking for a place to live I find the choice somewhat of an enigma.

      • Well, perhaps she, like many others, was thinking that SFHs appreciate much more than other condos or town homes, which in Vancouver they have. Also, it’s very common advice to buy in core neighbourhoods.

        So yes, probably she was thinking speculatively.

        However, I’d also bet the farm (and Farmer) that she was thinking this was a wise and prudent thing (no matter how wrong she was, I think that’s what she was thinking) to help secure her and her child’s future.

        Anyone here had cancer at that age? I did. Anyone know mothers who’ve had cancer at that age? I did. The foolishness of the decision tp buy may have been affected, as the Host said, by the incredible stress she was under. I’ve never seen anyone more desperate than the young mothers I knew who were wondering what was going to happen to their children if they didn’t survive, or how they would support themselves, or help support their families, if the cancer and/or treatment rendered them unable to work for months or years. Perhaps this is what led her to speculate on real estate?

        Or perhaps she did just want a house where she’d thought she be secure in a way she thought she might not have been through renting? And one can certainly raise children in a condo, but a lot of parents want yards for their kids.

        Yes, she made a foolish decision — one for which she’s paying dearly. But the building inspector was perhaps incompetent or dishonest or both and sounds like he is trying to duck responsibility.

        In any case, I like the idea, as I said, of focusing on solutions (thanks Absinthe, Ridiculous, Bemused, Host — and Nem, for the humour.)

      • I am not even trying to be argumentative Epte but like I said before I have no sympathy whatsoever for this women. The sickness with cancer card does not pull at my heart strings or make me want to donate to the charity of her choice.

        Lets look at this from another angle.

        Go back one million years in time to when we all lived in caves. Try to imagine this same situation playing out back then in a time when there was no brokers or government of services of any kind.

        Now you have a women with one child and no husband who is sick with a potentially terminal illness. What should she do? Well we already know the answer do we not?

        She went out and bought the biggest empty cave she could afford, did not exercise any personal responsibility in assuring it was safe for the small family she had and then made an heroic attempt to live alone without the benefit of family to assist her. Instead she chose tenants to pay for the food and other cave expenses. She is a genius.

        Is that what sick people did in cave-man days?

        She is an ignorant person in my view. A speculator. Irresponsible to her child.

      • Ralph Cramdown

        But the solutions, epte, are known. Rent, buy a new home with a warranty, buy a place you can afford without having to sublet, add a second breadwinner to the family, learn enough about home construction and maintenance that you can do the inspection yourself, insist that the vendor complete a detailed questionnaire about the known history of the property.

        Even if in this situation the home inspector was negligent, there are many, likely the majority, that an inspector wouldn’t catch. He won’t peel back drywall, move furniture and wait for hard rainstorms to inspect. You think somebody’s going to give you a $500 opinion with the possibility of $100,000 in damages if he’s wrong? His insurance premiums would be more than $500 per inspection if that were the case.

        Yes, SFH usually appreciates faster than condos. You think that’s risk free money and people who live in condos are just lazy fools? Of all the real estate plays you can live in, buying an older, subdivided SFH you can barely afford from a seller who was likely in the same boat so that you can play amateur landlord and “build equity” has to be about the riskiest. Even more so if you don’t know much about construction, renovation or maintenance. This woman is making one blunder after another. When she found the problem and discovered its likely cost to fix, selling the house would’ve been the winning move. But no! Litigation! Six figure remediation! Years without rental income!

      • Ralph and Farmer, please believe me, I don’t think people who live in condos are fools!

        I’m also sure many parents, as I said, crave yards for their children.
        But I would be the last person to urge any of them to buy a house in Vancouver.

        I used the word “foolish” several times to describe this woman’s purchase. I agree with both of you that she had many other options and this was one of the riskiest things she could do.

        I’m just saying I think I know how she might have gotten to the place where she thought it was a good idea.

        I can also see why she would have expected a home inspector who was president of the home inspection association or whatever to be knowledgeable, trustworthy, and thorough. She had enough on her mind without being expected to do his job for him.

        I agree with proposals on this thread that DIY home-inspection courses are a great idea.

        I’m very glad the CBC covered this story, if only to warn the public about insufficient home inspections. Maybe we can urge the CBC to cover more Vancouver RE nightmares.

        If you both were writing for the MSM, maybe more consumers out there would be more aware of all the risks this woman undertook.

        I’ve written recently to someone in the Vancouver media about the endlessly misleading, sunny “articles” about buying here. Hope other readers will consider doing this too. Then maybe people who are naive about RE here will not get into such dire situations.

  14. parabola economica … credit ratings and mispriced assets … structural rot galore in plain sight … but only for those who want to see … pffft!

  15. I am deeply alarmed that there’s so little recourse to home inspectors. I agree with ridiculous upthread – there’s got to be some level of due diligence going on with these “professionals”.

    Yes, I agree this woman helped herself into a bad jam and would have even if the house were perfect … but she tried to have her ducks in a row by having an inspector.

    One of the reasons I first thought there was froth in the market was that people were buying with no inspection. At the time, I thought that crazy, and so found these blogs. But without these blogs I would have assumed that I was paying an inspector to inspect and tell me real things about the property, rather than shaking a Magic Eight Ball.

    Bemused – that’s a great idea.

    • MagicEightBalls are so yesterday, Absinthe… What you want is…

      VooDoo!Man

      [NoteToEd: Rare ethnographic footage from Benin… where the HomeInspectors truly take pride in their work and have a nice little sideline in RealtorEffigies™. For my part, I especially enjoyed his diatribe on the shortcomings of thatched roofs…]

    • I’m also drawn to these proposed solutions!

    • Real Estate Tsunami

      The whole inspection and warranty business is a farce.
      Take the 2-5-10 year new house Warranty.
      I just bought a pillow that has a 10 year Warranty!

      • Serious? A ten Year warranty on a pillow? Wow.

        I recall back about 15 years ago I bought boots with a lifetime warranty from a domestic company. Canadian Tire was the dealer if I recall. They were caled “Prospectors” and they were awesome boots.

        Anyway, they did not quite live up to the claims advertised so for fun I took them back and asked for repairs. Lo and behold the company was long gone having been swallowed up in the great shift of manufacturing to Asia. They still make those boots but now they come from overseas and the warranty ain’t worth spit.

        How would you collect on a pillow warranty? It is just fluff as I see it.

  16. I used Home Sweet Home inspection in 2004. The guy somehow missed the fact that the roof was leaky and had not in fact been roofed by anyone in the roofing business. I was preparing to sue when I found a greater fool to dump it in on in 2005. I feel lucky to have escaped with a small profit.

  17. A single mother buying a 750k property? I am not single and I am not a mother and with both of our incomes combined there is no way we would pay such a rediculous amount of money for a POS(because clearly it was) property! Being a single parent should not be a card you throw around to get more sympathy from people it should be the card that makes you realize you have to make responsible, sound decisions…

    No sympathy for her.. she should have been fully aware of what she was doing before she jumped into the muck. Even if she did get “swayed” by others that is no excuse.. it was ultimately her decision to make and even though she knew her POS inspector did not climb on the roof to inspect it she still payed him and DIDN’T EVEN GET A SECOND OPINION. Idiot.

    • If all this rage resulted in just one letter to the CMHC, the banks, or the MSM, perhaps we could start reducing enabling the stock of Vancouver “idiots” and discouraging them from buying all the mouldy or badly-built or badly-inspected SFHs, condos, town homes in the city. Go for it!

  18. Whoops, meant to say above “reducing the stock of Vancouver idiots” or “stop enabling the stock of Vancouver idiots”.

  19. It’s pretty easy for all of you to call me an idiot, or spout about me being ignorant and foolish. Is it better for me to rent and get kicked out again? I was living in a brand new, beautiful suite that, unfortunately, was not legal. Someone informed the city about the suite, causing the landlords all kinds of trouble and they were forced to remove the suite, and then sell their income property. Would it be better to subject myself to that again? Would that be being a good mother? Or should I have moved to the suburbs and taken my child away from his Dad? I didn’t think so. I suppose now you will say it is my fault for living in an illegal suite, fully equiped with sprinklers and an alarm. How many people with a home in Vancouver have an illegal suite? I suppose you think that a single mother should be put in her place by living in a basement suite. The only reason that “cancer” and “single mother” were even mentioned was because I told the inspector before he did his “inspection” that I had had a rough couple of years and needed a good inspection, needed to know what I was getting myself into. That, and the very fact that I hired him, shows reliance. And THAT was the point. Not so you could pick me and my life apart. And you know what he told me? That I had come to the right place, that he licensed other home inspectors. I think that those of you who are criticizing me are missing the point of the article, that a home inspection means nothing. That this home inspector missed MAJOR defects. If this was the same story about a couple that bought the house, would you still be slamming the buyer? Or would you get the take home message?

    • What is the problem with professional property management companies? You wouldn’t have problems with illegal suites and it would be difficult for them to kick you out too.
      Or a co-op – a no-go too?

      this home inspector missed MAJOR defects.

      That is a big problem. A lot of real estate related activities in this city are either low quality or outright fraud.
      Caveat emptor.

  20. Wow, lots of false choices there, Lindsay. Can’t you check with the city to see if a suite is legal? Live in a purpose built apartment? Spend less and buy a condo? Yes, move to the ‘burbs because you can’t afford to live in Vancouver, and if the father stays, so be it. Any of those would have been better than your current situation, and probably better than if everything had gone well with your purchase.

    Sorry for your troubles, and best of luck. Some good parents also rent. I’m one (I hope).

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