Lessons from PCOs WDI Litigation
Perhaps the fastest-rising area of pest control litigation involves WDI/WDO reports. If recent studies are valid, about 18 percent of the $1.2 billion in termite-related services generated last year are a result of real estate inspections. According to some commentators at the NPMA annual convention in Las Vegas, this doubled the amount generated in pretreatment services. Accordingly, I have outlined several points that should be included in every pest management professional's plan to avoid litigation involving inspection reports. While I agree that some of these appear to be common sense and should not need to be listed, each point is one "learned" by a PCO involved in litigation over a WDI report.
Perform the inspection. While this seems easy enough, we are seeing claims where the allegation is that the PCO just failed to do the inspection. Obviously, defenses here are limited.
Perform the inspection correctly. Following state guidelines and/or NPMA instructions speaks for itself. Nevertheless, having a detailed checklist for each step of an inspection is not only a good organizational tool, it may well keep your inspection claims from becoming a lawsuit. Take nothing for granted. Go into each room in the house, including the crawlspace and basement. Visually inspect the premises as thoroughly as you can.
Fill out the report completely. All reports have questions, and all questions require answers, even if the answer is "not applicable." Use the comments section to explain "findings" as needed. Attach additional sheets as needed. Err on the side of providing too much, not too little, information.
Identify inaccessible areas. If a crawlspace is blocked, or an attic door is locked, say so on the report. If boxes cover a wall, blocking your view, explain what you see and are faced with. Consider a photograph to confirm the inaccessibility. Clearly document why the area is inaccessible.
Specifically identify problems. If there are leaks, or evidence of leakage, state where and what you observed, even if you have been told, "that's been fixed." If there is wood-to-ground contact, or problems with sprinklers or firewood next to the house, or stopped up gutters, include them in your report. These problems can be fixed. A defective report might not be fixable.
Use your best people for the job. State agencies and the mortgage industry believe these inspections are important. We should send only our best people to handle these jobs. This is not the place for a brand-new or rookie technician. Also, do not let a real estate broker or agent convince you that the report should read differently.
Charge adequately. The old adage you get what you pay for may haunt a "cheap" inspection. You are providing a regulated service often required before a house can be financed. Or you may be fulfilling the terms of an annual contract. In either event, charge a sufficient amount so that you can devote adequate time by properly trained inspectors to do the best job possible.
Graph properly. While drawings don't have to be to scale, they should be clear enough so as to be understood. Unclear or incomplete graphics will only hurt your position.
Properly document your findings. Phrases like "some damage," or "a lot of termites" are not helpful. Don't write in shorthand or write partial answers. If the question asks for "prior treatment," state the date and/or dates of prior treatment. If there are too many dates for the block, asterisk the block and explain them in the comments section.
You can list all the details or indicate multiple treatments with records available at your office for review. Remember, these reports are being read by people who do not have the same knowledge as you. They must be able to understand the information you are providing.Red flag problem areas. If a house has been "recently remodeled" or has standing water in a crawlspace, indicate such and all other potential concerns that warrant notice. Failure to address these issues in an inspection report may cause them to be addressed in litigation later.
Clearly communicate with the person ordering the report. Whether it is a buyer, real estate agent or closing agent, you need to confirm several things, preferably in a written communication. These include:
Property address;
Date of inspection;
That no other inspections were reported to you in response to your direct inquiry;
That you will be paid a specific amount at closing;
Confirmation that the buyer or the buyer's agent may review prior treatment records, if they exist;
Confirm that the buyer may be present at the inspection; and,
Confirm that the buyer may transfer the current service agreement and explain how this can be done.
Form should be properly delivered. All required signatures should be on the form. Consider having each page signed by the buyer, or at least initialed on each page. This is especially true if you have found a problem. If you fax the report (we suggest it be hand delivered and maybe even cash on delivery [or "COD"]) make sure both front and back of each necessary page is faxed and that you have a confirmation for each page.
CONCLUSION
There is a great deal of responsibility inherent with each inspection. This is indicative of the potential liability you face with each job. Don't try to do more in a day or week than you can reasonably handle. Don't be persuaded into being anything but absolutely clear in your report.
Remember, you are performing a valuable service for the buyer who may well one day be either your customer, or your plaintiff, in a lawsuit. Your job is to do a proper inspection, not meet a closing deadline.
