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| November - December 2009 Inspector eNews |
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November — December 2009 | Archives
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Lessons in Risk Management: The Inaccessible Crawlspace Although some insurance claims are due to negligence on the part of the inspector, most are not. Most are the result of comments made, or not made, at the inspection and in the report. The Inspector performed an inspection of an older home that had a crawlspace. There was a small area, somewhat of a cellar, that was accessible and a very limited portion of the crawlspace was visible from the cellar. In his report under the “Foundation” section, the inspector wrote, “crawlspace partially not accessible,” along with describing some conditions needing repair. This comment would seem to meet or exceed nationally accepted standards of practice and clearly alert the client that portions of the subfloor area were not accessible. The comment did not mention the crawlspace was not inspected even though we would assume that if not accessible. Sometime after the inspection the buyer submitted a claim for non-disclosed deteriorated wood and significant repairs needed to the floor framing in the crawlspace. Upon further review it was discovered that numerous defects were clearly visible by simply looking with a flashlight through the subfloor ventilation opening screens. Defects were visible even though this portion of the crawlspace itself was not accessible due to lack of clearance between the soil and floor framing (clearance was 1-foot to zero). The moral of this story: the inspector mentioned that the crawlspace was inaccessible, meeting or exceeding national standards of practice. However, the fact that defects were visible simply by shining a light through ventilation openings made defending the claim difficult. Simply mentioning that the crawlspace was not accessible, while complying with the standard of practice, does not alert the client to the magnitude of potential hidden conditions. We recommend further elaboration regarding the potentials when areas are inaccessible:
As a further recommendation, if there is any opportunity to see portions of the building through alternative methods, such as a crawlspace via the ventilation openings, we recommend using them as long as the methods are safe. If areas are not accessible for inspection be sure to report the condition and the potential hidden conditions that may be present.
Chinese Drywall Update - November 2, 2009 What is Multi-District Litigation (“MDL”)? MDL is a procedure to consolidate similar cases for the purpose of, among other things, conserving resources and preventing inconsistent rulings in different courts. All such cases are assigned to a judge in one federal district court. In June 2009, a panel of federal judges ruled that lawsuits filed in federal courts against home builders, suppliers and manufacturers of Chinese drywall would be transferred to the Eastern District of Louisiana, where Judge Eldon Fallon will preside over discovery and pre-trial hearings. As one of his first tasks, Judge Fallon appointed a steering committee consisting of several plaintiffs' and defendants' lawyers. This committee is responsible for arguing pretrial motions, deciding which legal theories to pursue and conducting common discovery. On November 2, 2009, Knauf (one of the manufacturers of Chinese drywall) agreed to accept service of lawsuits for a period of one month. Until now, service of process (the formal mechanism by which one serves a defendant with a lawsuit) was required to be made through the Hague Convention, which costs approximately $15,000 per claimant. Claimants who have Knauf drywall will now be able to consolidate their claims in one omnibus class action complaint against Knauf and other defendants who were involved in the manufacture, sale, importation, brokerage, distribution, construction and installation of homes containing Knauf drywall. Homeowners who wish to participate must submit evidence that their home contains Knauf drywall, such as photos of markings or visual inspection reports ON OR BEFORE DECEMBER 2, 2009. Preservation Order On October 9, 2009, Judge Fallon entered a Preservation of Physical Evidence Order requiring all persons or entities who have or who intend to pursue a claim relating to Chinese drywall to preserve physical evidence at their own expense. Thus, those who undertake to repair their homes must comply with this order in order to pursue a claim at a later date. Consumer Product Safety Commission Findings Homeowners were dealt a blow last week when the Consumer Product Safety Commission (CPSC) announced that further studies are needed to establish a nexus between Chinese drywall and corrosion and health effects. The Press Statement and full report is available on www.cpsc.gov/info/drywall The Florida Department of Health studies found elevated levels of sulfur gases coming from Chinese drywall samples (ten homes), but according to Dr. David Krause, these levels do not present imminent or foreseeable health hazards to homeowners. Further studies are needed to determine the health effects from gases in lower concentrations. Insurers Continue to Drop Homeowners Last month, we learned that Citizens canceled a homeowner's policy of insurance because the owner had Chinese drywall. Citizens then reversed it decision and reinstated the policy. Other insurers, however, continue to drop homeowners, some citing a change in exposure, namely that the property is vacant (even if the homeowner temporary left their home because of adverse health effects from the Chinese drywall). Other insurers are canceling policies because the Chinese drywall presents a higher risk of exposure. One must wonder how insurers are dropping homeowners with Chinese drywall yet the CPSC has yet to establish a nexus between Chinese drywall, corrosion and health effects. Even more bizarre are lenders who are refusing to abate mortgages until homes are determined to be uninhabitable. Of course, if a homeowner fails to insure his/her home, the lender may impose force placed insurance. Loans for Remediation - Will HUD ever offer assistance? The House voted unanimously to amend the "Small Business Financing and Investment Act of 2009" to allow the SBA to lend money to homeowners for the repair or replacement of Chinese drywall. However, there still is no approved remediation protocol, nor has the federal government made a determination that the drywall needs to be replaced. As such, the amendment does nothing to assist homeowners now. Meanwhile, HUD is offering no assistance to homeowners with Chinese drywall, other than to recommend that homeowners seek foreclosure avoidance counseling, which I find rather insulting. Visit www.chinesedrywall.com to learn more about Chinese drywall. Please send your questions, comments or feedback to: help@chinesedrywall.com. *Allison Grant, Esq., is a partner with the law firm of Shapiro, Blasi, Wasserman & Gora, P.A., in Boca Raton, Florida. (561) 477-7800. If you are not represented by an attorney and have any questions about these new developments or wish to discuss your legal rights, please feel free to call me. *This article does not constitute legal or any other professional advice, and is not intended to create a professional relationship including, but not limited to, an attorney-client relationship. Copyright 2009 - Chinese Drywall Marketing, LLC Page 5 |
Congratulations! New Candidates Richard W Sarette New CCIs John L. Briere New Affiliates Ed Daher
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November — December 2009 | Archives
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Lessons in Risk Management: The Inaccessible Crawlspace Although some insurance claims are due to negligence on the part of the inspector, most are not. Most are the result of comments made, or not made, at the inspection and in the report. The Inspector performed an inspection of an older home that had a crawlspace. There was a small area, somewhat of a cellar, that was accessible and a very limited portion of the crawlspace was visible from the cellar. In his report under the “Foundation” section, the inspector wrote, “crawlspace partially not accessible,” along with describing some conditions needing repair. This comment would seem to meet or exceed nationally accepted standards of practice and clearly alert the client that portions of the subfloor area were not accessible. The comment did not mention the crawlspace was not inspected even though we would assume that if not accessible. Sometime after the inspection the buyer submitted a claim for non-disclosed deteriorated wood and significant repairs needed to the floor framing in the crawlspace. Upon further review it was discovered that numerous defects were clearly visible by simply looking with a flashlight through the subfloor ventilation opening screens. Defects were visible even though this portion of the crawlspace itself was not accessible due to lack of clearance between the soil and floor framing (clearance was 1-foot to zero). The moral of this story: the inspector mentioned that the crawlspace was inaccessible, meeting or exceeding national standards of practice. However, the fact that defects were visible simply by shining a light through ventilation openings made defending the claim difficult. Simply mentioning that the crawlspace was not accessible, while complying with the standard of practice, does not alert the client to the magnitude of potential hidden conditions. We recommend further elaboration regarding the potentials when areas are inaccessible:
As a further recommendation, if there is any opportunity to see portions of the building through alternative methods, such as a crawlspace via the ventilation openings, we recommend using them as long as the methods are safe. If areas are not accessible for inspection be sure to report the condition and the potential hidden conditions that may be present.
Chinese Drywall Update - November 2, 2009 What is Multi-District Litigation (“MDL”)? MDL is a procedure to consolidate similar cases for the purpose of, among other things, conserving resources and preventing inconsistent rulings in different courts. All such cases are assigned to a judge in one federal district court. In June 2009, a panel of federal judges ruled that lawsuits filed in federal courts against home builders, suppliers and manufacturers of Chinese drywall would be transferred to the Eastern District of Louisiana, where Judge Eldon Fallon will preside over discovery and pre-trial hearings. As one of his first tasks, Judge Fallon appointed a steering committee consisting of several plaintiffs' and defendants' lawyers. This committee is responsible for arguing pretrial motions, deciding which legal theories to pursue and conducting common discovery. On November 2, 2009, Knauf (one of the manufacturers of Chinese drywall) agreed to accept service of lawsuits for a period of one month. Until now, service of process (the formal mechanism by which one serves a defendant with a lawsuit) was required to be made through the Hague Convention, which costs approximately $15,000 per claimant. Claimants who have Knauf drywall will now be able to consolidate their claims in one omnibus class action complaint against Knauf and other defendants who were involved in the manufacture, sale, importation, brokerage, distribution, construction and installation of homes containing Knauf drywall. Homeowners who wish to participate must submit evidence that their home contains Knauf drywall, such as photos of markings or visual inspection reports ON OR BEFORE DECEMBER 2, 2009. Preservation Order On October 9, 2009, Judge Fallon entered a Preservation of Physical Evidence Order requiring all persons or entities who have or who intend to pursue a claim relating to Chinese drywall to preserve physical evidence at their own expense. Thus, those who undertake to repair their homes must comply with this order in order to pursue a claim at a later date. Consumer Product Safety Commission Findings Homeowners were dealt a blow last week when the Consumer Product Safety Commission (CPSC) announced that further studies are needed to establish a nexus between Chinese drywall and corrosion and health effects. The Press Statement and full report is available on www.cpsc.gov/info/drywall The Florida Department of Health studies found elevated levels of sulfur gases coming from Chinese drywall samples (ten homes), but according to Dr. David Krause, these levels do not present imminent or foreseeable health hazards to homeowners. Further studies are needed to determine the health effects from gases in lower concentrations. Insurers Continue to Drop Homeowners Last month, we learned that Citizens canceled a homeowner's policy of insurance because the owner had Chinese drywall. Citizens then reversed it decision and reinstated the policy. Other insurers, however, continue to drop homeowners, some citing a change in exposure, namely that the property is vacant (even if the homeowner temporary left their home because of adverse health effects from the Chinese drywall). Other insurers are canceling policies because the Chinese drywall presents a higher risk of exposure. One must wonder how insurers are dropping homeowners with Chinese drywall yet the CPSC has yet to establish a nexus between Chinese drywall, corrosion and health effects. Even more bizarre are lenders who are refusing to abate mortgages until homes are determined to be uninhabitable. Of course, if a homeowner fails to insure his/her home, the lender may impose force placed insurance. Loans for Remediation - Will HUD ever offer assistance? The House voted unanimously to amend the "Small Business Financing and Investment Act of 2009" to allow the SBA to lend money to homeowners for the repair or replacement of Chinese drywall. However, there still is no approved remediation protocol, nor has the federal government made a determination that the drywall needs to be replaced. As such, the amendment does nothing to assist homeowners now. Meanwhile, HUD is offering no assistance to homeowners with Chinese drywall, other than to recommend that homeowners seek foreclosure avoidance counseling, which I find rather insulting. Visit www.chinesedrywall.com to learn more about Chinese drywall. Please send your questions, comments or feedback to: help@chinesedrywall.com. *Allison Grant, Esq., is a partner with the law firm of Shapiro, Blasi, Wasserman & Gora, P.A., in Boca Raton, Florida. (561) 477-7800. If you are not represented by an attorney and have any questions about these new developments or wish to discuss your legal rights, please feel free to call me. *This article does not constitute legal or any other professional advice, and is not intended to create a professional relationship including, but not limited to, an attorney-client relationship. Copyright 2009 - Chinese Drywall Marketing, LLC Page 5 |
Congratulations! New Candidates Richard W Sarette New CCIs John L. Briere New Affiliates Ed Daher
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