YOUR HOUSE MIGHT BLOW UP!

1. WANT AN INSPECTION?

 A little business card blew up into a big case last Tuesday at the Kentucky Board of Home Inspectors (the KBHI).
    The business card, with an alarming note, was left on a neighbor’s house by 16-year home inspector Kenny Martin.
     Martin said he could tell a neighbor about hazards he found inspecting the house next door.  The  Hearing Officer said it was “an advertisement and not a warning of imminent danger” that improperly disclosed the results of a home inspection without written client approval.
     It drew the first written reprimand from the KBHI at Tuesday’s board meeting in Frankfort. KBHI v Kenny Martin, Case No. 13-KBHI-0121.
    That came as the result of the first complaint by a homebuilder against a home inspector. The same builder built both homes.  You can see his problem.
     The case also is the first to spell out the difference between “imminent danger” – versus a “potential”danger – under Kentucky rules. And in writing.  Inspection results usually are confidential — unless there is an “imminent danger to life, health, or safety” (or a court order).
    The board order also gives some pointers for home inspectors handling a complaint – from a client or from the board.
    In fact, it was the KBHI’s first 13B Hearing. This is all new ground — with important guidance for home inspectors and homebuilders.

It all started as usual. In May, 2012.

Martin inspects a vacant, new single family at 1609 Church Side in a new neighborhood where about 18 out of 20 homes were built by the homebuilder, Matt Jones Construction.
    When he finished the inspection, Martin went next door, to 1613 Church Side, and left a business card in the front door of the other home, one empty lot away.
The business card had a slogan: “Don’t Gamble on Your Next Home. ‘Get a Full House.’” Playing cards with three aces and two kings were drawn below it.
    But that was not all.  Here’s the rub.  On the back of the business card Martin wrote: “FYI – We performed an inspection on the home next door & found over 60 issues, some of these are noticeable on your home.  For a full competent inspection by an inspector who does not work w/ real estate agents, call us!”
     Remember that number.  “60.”  It would come back to haunt him.
     Martin delivered his report on or about May 9, 2013.  It included photos of several safety hazards, including gas leak.  Martin’s report also said LG&E had come out and immediately corrected the problem.  At the bottom of each page, the report said “This confidential report is prepared exclusively for Li Tan Lin,” the client.  Graduates of PLI’s law classes know that is poppycock and a bad habit at best.  Here, it turned around and bit the inspector.  Both the complaint against the inspector and the Hearing Officer used it.
     The neighbor at 1613 took the card to Dennis Jones, owner of Matt Jones Construction Co., the company that built both homes.  Jones also is a real estate broker.  He has been building homes since 1973.
     On June 15, 2012, about a month after the inspection, Jones filed his Complaint with the KBHI.
 In a finely tuned attack, Jones said his complaint was “that the inspector solicited business at an adjacent property by referencing this confidential inspection report.”  Jones did not pick bigger issues like claiming there was a “false representation.”  Just one narrow laser-like point.
     When the KBHI sent the complaint to Martin, he answered that he saw “no problem.”
     “These are not my clients and they show no confidential information being disclosed.,” Martin said.  “I have no obligations to this person.  I guess their mad because the house did not sell?  No laws were violated in leaving a card on the home next door.”
     Wrong again.  The Board sent Martin a letter of reprimand on Dec. 19, 2012.  The reprimand said Martin violated 815 KAR 6:030 Sec. 2(8) by disclosing information concerning a home inspection report without the written approval of the client.
     “However,” the KBHI added, “the Board did not believe a first-time violation of this nature was serious enough to warrant filing a formal complaint against you.”
     It could have ended there.  But no.
     A reprimand is the least serious disciplinary action the Board can take.  But it does go into a home inspector’s file. And whether or not a complaint is a first-time offense can matter.  The Board is beginning to get the idea of progressive discipline.   
     Martin appeared at the Jan. 8, 2013 meeting of the KBHI.  He re-argued his interpretation of the confidentiality requirement.  He asked for a hearing on the reprimand. For this, the Board claimed it had to discuss in secret, and closed the meeting.
         Apparently the Board had thought that a written reprimand would not entitle a licensee to a hearing.  Wrong.  When it let the public back in, the Board’s unusually skilled stand-in attorney explained inspectors did have a right to a hearing – for a reprimand or any disciplinary action.  The Board voted to “grant” the hearing Martin was entitled to have.
     Meanwhile, after he got home from the Board meeting, Martin sent an email to the regular Board attorney.  
     “I forgot to mention the fact that there are 8 listed safety hazards in the report.”  He wondered if there really was any reason for a hearing.
     The reason was that he had asked the Board for the hearing.  Toyota: You asked for it, you got it.  PS – There’s an old saying.  Anyone who tries to be his own lawyer has a fool for a client.
     So the hearing covened on Aug. 27, 2013.
     And so it developed that, at the hearing, Martin’s defense to the reprimand switched primarily to safety hazards.  Martin went so far as to stress that his defense was “safety hazards period.”  If you’re going to put all your eggs in one basket, it better hold.
     The confidentiality rule says inspectors “shall not…disclose any information concerning the results or content of the home inspection report” without written client consent.  Except that a “home inspector may disclose information if there is an imminent danger to life, health, or safety…”   815 KAR 6:030 Sec. 2(8).
     But Martin had created a problem or two for himself here.
     Remember that number?  “60?”
     The first problem was that Martin already had whittled that down from 60, in the note on his business card, to 8, in his email to the Board attorney.
     But the number got shaved down to, at most, three, when former KBHI chairman J. R. Bone testified for the Board, against Martin.  And it was only 1, when the builder testified.
     Jones, the complaining builder, testified that both houses passed all required building code inspections.  He said the only potential safety hazard was the gas line leak that Martin reported, and had LG&E fix.  Jones said all his homes routinely pass state and local inspections.  He also gives a one-year warranty.  
     Bone agreed that most of the 8 problems Martin brought up in his email to the Board attorney, and testified about at the hearing, were potential safety hazards.
     “Potential” is not the same as “imminent,” the key word in the confidentiality rule.
     Bone also testified that the gas leak Martin reported was an “imminent” danger – but Martin knew it had been taken care of.  Bone even agreed that two items Martin reported were “imminent” dangers too.  Those hazards were (1) installing the auto-reverse photoelectric safety beams installed too high, “so a child or pet could be crushed by the descending door,” and insulation around a light canister, when he could see no IC markings, could let heat build up and cause a fire.
     That totaled 3 “imminent” dangers.  Martin argued there were others.  Like a deck not securely attached to the house, placement of Romex wiring in the basement. No one else agreed, including the Hearing Officer.
     It’s possible that a lawyer representing Martin might have cast doubt on some of the more basic issues, for example by asking Bone if he ever delivered reports to agents without the written consent of a client.  But it was over once Martin appeared at the hearing claiming the “imminent danger” exception with 60 on his card, 8 in his email, and just 3 everyone could agree on – and excuses that shifted enough not to pass the Hearing Officer’s smell test. 
     In fact, the Hearing Officer seemed pretty skeptical about the whole story.
     “Imminent” means “certain and very near impending,” the Final Order declared.  “‘Imminent’ does not mean merely ‘probable.’”
     That’s the moral of this story when it comes to the “imminent danger” exception to home inspector confidentiality.
     But the Order went further: “The evidence was clear and unambiguous that no one at 1613 was in imminent danger. Martin did not see the garage at 1613 because it was beneath the back of the house.  He did not know if 1613 even had gas service.  He never went into 1613 and thus had no idea as to whether the home had any cannister lights nestled in insulation,” the Hearing Officer wrote.
     “His business card was an advertisement and not a warning of imminent danger,” the Hearing Officer concluded.
     Then, despite a recommended order loaded with disbelief about Martin’s sworn testimony, the Hearing Officer also seconded the Board’s view that “Martin should be issued a final letter of reprimand, as opposed to a more severe penalty, because it is his first time violation of this nature.”

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