1. Christopher B. Block, Esquire 425 Eagle Rock Avenue. Suite 302. Roseland, NJ 07068 P:973.618.4176 F:973.618.4100 E:cbblock@mdwcg.com Gawain Charlton-Perrin, Esq. Direct Phone: 630-760-3077 GCharltonPe@Hanover.com Watch Your Step! The Guide to Representing Home Inspectors and Real Estate Agents 1

2. The Plight of the Average Home Inspector Low fees - Often under $250 per inspection High risk – No one is ever satisfied Statutes and common law require fidelity to client and thorough review of entire visible area of the property BUT, if too thorough, you can alienate real estate agents who are your primary source of referrals 2

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4. Types of Cases and How to Attack Them General areas of claims are: a.Negligence b.Breach of Contract c.Fraud and Consumer Fraud (Statutory Fraud) 4

5. Negligence Plaintiff sues home inspector because she didnt note the existence of fire damage above basement ceiling tiles. Attack all prongs: Was there a duty to lift up ceiling tiles (usually no), see through walls? Is the existence of concealed fire damage without structural damage a real damage? (Depends on your state, effect on resale is the best argument) What standard is plaintiff using to establish the duty? Does your state have a statute like NJ that gives the exact duty? Were you given notice of damages before plaintiff repaired? Are we dealing with a spoliation case? (If plaintiff repairs problems before you can see them) 5

6. Breach of Contract Plaintiff sues because you did not discover rodent issues in a crawl space. Read Visual inspection agreement, note limitations and promises, limitation of liability clauses, arbitration clauses, reference to statute or guidelines. EXCLUSIONS: If plaintiff is going to rely on the contract to prove her case, why does she get to limit it to her signature? Ask what her expectations were and then take her through the contract she signed. 6

7. Fraud and Consumer Fraud Has this been plead with specificity as fraud usually requires? Are these claims permitted against home inspectors or are they excluded as professionals, like lawyers and doctors often are? Do these claims permit treble damages? (You could use this to help convince your client to settle a hairy case) Do they require actual damages as fraud often does? (Not speculative) 7

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9. How to Prevent Claims Advise for the Home Inspector on your Christmas List Send Visual Inspection Agreement/contract at least 48 hours in advance. This helps avoid allegations of a contract of adhesion or that plaintiff was forced to sign the contract Gives them a chance to ask questions, you can argue they could have crossed out disagreeable clauses but didn't bother to read it. 9

10. Introductory Letter or Email Introductory letter or email should insist all purchasers be present. While this is not always feasible, this helps you establish that you wanted them all there to pay attention and hear what you have to say but they could not or would not be bothered. Plus, then plaintiff will have to explain why they were so busy. (Often it puts plaintiff in position of explaining why she was too busy at work to attend the home inspection though budgets purchase of her life) 10

11. Begin and End Time Note time of start and end on inspection form and who was present Good housekeeping measure: Plaintiff's counsel always asks, how long were you there, who was present? They try to establish they were all cookie cutter or you had no recollection of this site, this helps you. Plus, if they bring their own roofing specialist or pool guy, you have some evidence. 11

12. Limitations of Liability Clauses Check if your state permits limitations of liability clauses. If so, put them in. Could mean the difference between a $300 claim and a $30,000 claim. Limited states permit limitation of liability clauses. We only reimburse you for cost of the work. In NJ they are forbidden. 12

13. If there is a statute for home inspections, reference it in your report and agreement so plaintiff has a reference and a guide for her expectations. Could ask at deposition: Did you read the regulations? Why did you expect him to climb on the roof when regulations clearly do not require it? 13

14. Fool's Gold Avoid Arbitration Clauses – Fools Gold – Can still be very costly, especially if other defendants still in litigation You lose all control – No civil procedure, sole arbitrator holds all of the cards No appeals – Whatever the arbitrator does, no matter how ridiculous, it is final and unassailable. (Unless something epic) No stare decisis – mediator can invent precedent Arbitrators often split the baby, no matter what. 14

15. Carefully constructing your web site and dont over sell – never say, we find everything or guarantee a result. Seems obvious but too often you see sites that say "we find every termite" or "I promise to find every problem" But what if it is the day after a two foot snow storm and you literally cannot see the basement windows…well you promised. 15

16. Thank you! Christopher B. Block, Esquire 425 Eagle Rock Avenue. Suite 302. Roseland, NJ 07068 P:973.618.4176 F:973.618.4100 E:cbblock@mdwcg.com Gawain Charlton-Perrin, Esq. Direct Phone: 630-760-3077 GCharltonPe@Hanover.com 16