Last winter, I learned something that would be obvious to any veteran home-owner: You only know your house by living in it.
So when a snowy night in December produced one of the coldest temperatures in Edmonton history, I called a carpenter friend for a quick how-to on winterizing my newly purchased 50-year-old bungalow. His first tip: you should have done it back in the fall.
I had – sort of. I did remember the need to shut off the water supply to the backyard tap. Yet when I shone a flashlight into the basement ceiling space where I expected to find the valve, I saw nothing. I took my carpenter friend’s casual response to this as confirmation of the inevitable: “Sure,” he said, “I guess the pipes could freeze.”
And then they would burst, I extrapolated. After entertaining alarming visions of my basement as a cistern, I began looking for someone to blame – which led me to the report our home inspector had given us. Despite notes on seemingly every aspect of the house, there was no mention of the deficiency. Instead, I found a clause relieving him of inspecting hidden items, such as pipes in the ceiling.
This omission was due in part to the fact that anyone, trained or not, can examine a home in Alberta. The province’s home-inspection industry, comprising roughly 350 inspectors, isn’t regulated – but that could soon change. The Alberta government is currently considering the implementation of licensing, a move that would standardize inspectors’ qualifications and add a new layer of consumer protection. In the meantime, it’s still up to buyers to inform themselves about their informant and thus ensure that intelligence, so vital to making the decision of a lifetime, is built on a solid foundation of fact.
Before buying, my wife and I selected from five home-inspector brochures provided by our realtor and independently hired one whom friends had used. Following his three-hour inspection, the former civil engineer conducted a tour of the home’s bad grading, improper attic ventilation, out-of-date electrical breakers and other structural quirks – none of them enough to prevent an overall passing grade. We’re still thankful for his thoroughness. But, even so, the issue of the missing shutoff valve struck me as a downside to the process.
Like any industry, Canada’s home inspection business has had its troubles, one of the highest-profile examples of which played out last November before the Supreme Court of B.C. Following the faulty inspection of a $1.1-million North Vancouver home, the court ruled that the inspector’s negligence led to $193,000 worth of necessary repairs going unnoticed. Having purchased the property on the professional’s advice, the new owners sought damages to cover their costs – and the inspector was forced to foot the bill.
It’s no surprise, then, that Doug MacDonald, president of the Alberta chapter of the Canadian Association of Home and Property Inspectors (CAHPI), chooses his words carefully when asked about what is required of home inspectors.
MacDonald, owner of the Red Deer location of Pillar to Post Inc., a franchised inspection company, says the purpose of an inspection is to “reduce the risk of buying a house, to give buyers a professional opinion of the home’s condition.”
In an effort to legitimize the profession in the absence of government legislation and licensing, CAHPI “regulates” by registering inspectors. It admits members based on completion of courses covering topics such as home structure and systems integrity, communication and professionalism, and safety. The class time is followed by a series of exams and peer-reviewed test inspections. That way, says MacDonald, “if you hire one of our inspectors, you know you’re not just getting somebody off the street.”
By protecting the industry, MacDonald believes CAHPI also protects the consumer: “You’re basing the most money you’re ever going to spend in your life on someone who comes for two or three hours to look at a house and give you his or her opinion.”
That said, an inspection is never completely exhaustive. Inspectors aren’t, for example, required to investigate a concealed system or identify environmental hazards. And even among the elements included in the check, some things inevitably go overlooked. “Will we find everything all the time? No, we won’t,” says MacDonald. “Is there going to be the odd mistake even if there is regulation? Yes, there’s going to be, because we’re human. You can’t take the human factor out of it.” Hence, the existence of inspectors’ errors and omissions insurance. “A home inspectors’ review of a property is usually a condition the buyer will put on the offer to purchase to protect themselves,” says Melinda Mantello, manager, AMA Financial Mortgage Solutions. “Of course, people don’t have to get an inspection at all,” she says. “A consumer’s decision of whether or not to use a home inspector is a personal one.”
As part of its contribution towards laying the groundwork for regulation, CAHPI served on a working group that put forward a list of recommendations to Service Alberta, the ministry responsible for regulating a variety of industries, from prepaid contractors to payday loan shops. Between May and the end of June 2009, the ministry amassed public and industry input into whether home inspectors should be licensed, possible industry standards, insurance requirements and other matters that the government will factor into its conclusion, which is likely to come before the end of 2010.
“Generally, home inspectors in Alberta do a great job and we don’t actually hear too many complaints,” says Cam Traynor, Service Alberta communications director. “But in those rare instances where there is a negligent inspection, it could cost a homeowner hundreds of thousands of dollars. That’s why we’re considering regulation. But where that leads, we don’t know at this point.”
When the B.C. government announced regulation of the industry in January 2009 – the first province to do so – the move led to mandatory licensing that, in theory, will hold all inspectors to the same standards of conduct and performance. While that could happen in Alberta, for now consumers must protect their own interests and investments.
On its website, the Canada Mortgage and Housing Corporation (CMHC) puts it this way: “Once you buy a home, you’re on your own to maintain it, repair it, anticipate problems and pay the bills. This is why it’s best to know as much as you can about potential problems before you make the commitment to buy.”
Though it recommends consumers inform themselves as much as possible before a purchase, CMHC doesn’t endorse a particular inspector or association. Instead, it recommends that any inquiry into the quality of a home inspector focus on the number of homes inspected, on membership in associations like CAHPI and on references. If an inspector offers to double as repair contractor or to view a property after daylight hours when problems could go unnoticed, look for someone else.
When all was said and done, our inspection did result in a significant discovery that we, as first time homeowners, would never have noticed: outdated electrical breakers. However, after our inspector identified them, our realtor presented the seller with three options: replace them, deduct the cost of the repair from the purchase price or find a new buyer. The sellers chose the first option, meaning our $500 inspection had already paid for itself by way of a brand-new breaker box – a fix far more costly and complicated than the $10, half-hour job required to install a shutoff valve on the pipe leading to the backyard tap.
Whether you’re buying your first home, transferring your existing mortgage or checking out rental or recreational properties, AMA Financial has the right mortgage to fit your needs. 1-866-850-6116; AMAFinancial.ca