Inspector screw up?

22 Replies

Hello,

I just found out that I need to replace my water heater. 2 months after Inspection. 

In the inspection report, the inspector wrote that its condition is "Satisfactory". 

Unofficially, when I emailed the inspector to ask specifically about the water heater, he said it looks pretty new and I don't have any reason to worry. Now, I was told by my PM that I should install a new water heater since the old one has issues. In addition, they say that it looks over 20 years old. I saw also a picture with 1998 tag. 

Should/could I force the inspector to take responsibility? Can I do anything with it? 

Thank you very much!

That's a crappy situation. I bet you signed something for the inspector saying that he's not liable for giving you bad info, but you might check to make sure. 

One big problem would be that to pursue it in court or anything like that would likely not be worth the expense. You can always leave a bad review in some online location that'll hurt him - that might bring him to the bargaining table. Not sure if it's worth it though. There's also the BBB, where you could file a complaint. I don't see a high probability of you getting compensated in either of those scenarios though.

Typically home inspectors have you sign a waiver that limits their liability.

Water heater could have been perfectly fine 2 months ago and is not fine now.  

And its a water heater, they can fail at any moment. Seriously, some die in under a year.  Its part of owning a property, just replace the water heater.

You know what I would do?  I would call my local electric/gas company - depending on the water heater - and ask if they are offering a rebate on new water heaters.  In my area, the rebate is about 1/3 or more of the cost plus almost all installation; they'll even add the cost to the water bill spread over 5 years - interest free (my favorite kind) -  so it's about $15 a month.  A CEO of an insurance company recently told me that the insurance industry is going to stop insuring properties with water heaters over 12 years old. With claim costs increasing year-over-year, the average claim based on a failed water heater damage claim is $60k.  I would rather have you buy a new water heater than be left with a damage claim AND a new water heater.  

And, this is just one more reason why being a real estate investor is not for wimps.

@Clark Kirkpatrick and @Russell Brazil both said it - I can guarantee you that in what you signed, the inspector is not responsible for anything and you are not relying on anything he says or reports. 

Unfortunately, you are on your own on this one, your recourse will cost more than the water heater.

I went through this and learned the hard way. I now have licensed contractors do the inspections. The two most useless things in real estate are Home Inspectors and Home Warranties

I agree with what's been posted; the inspector's contract probably limits their liability.

The inspector I've hired a couple of times in the Kansas City area told me that he kept track of water heater failures, and that they last, on average, 16 to 17 years here.  So if yours really is from 1998, it might be time for a new one.  Did the inspection report list the year of the water heater?  If it lists the serial number, sometimes you can tell from that - Google, like, "Rheem water heater serial numbers" or "State water heater serial numbers" to see how to read the serial number.

The water heater in my house, and the one at my rental, have a clear date on the label.  The one here says "Mfg. Date" with the month and the year, and the one at the rental says "Build Date" with the month, day, and year.

What does the PM say is wrong with the water heater?  The number one complaint is that they start leaking.  If they're leaking out the bottom, they're usually all done, and it's time for a new one.  Sometimes either the drain valve (on the side near the bottom) or the temperature/pressure relief valve (either on the top, or on the side near the top) starts leaking, and $20 at the hardware store solves that problem.

If it doesn't leak, but doesn't get hot: if it's gas, and has a pilot light, sometimes the thermocouple burns out; this is a $20 part at the hardware store.  If it's electric, sometimes the heating elements or thermostats burn out; they cost a little more but all the hardware stores have them.

@Idan Narotzki

I agree with others that you should replace it if there is no cheap fix. I have my inspector tell me the years on my furnace, condenser, and water heaters when he does the inspection. I think there might just be a lot of crappy home inspectors out there. At the end of the day this isn’t that big of a deal but it’s a good lesson in using quality trustworthy inspectors and PMs.

It sounds like you knew this was from the late 90's assuming the pic was from prior to purchase? Even if not... No inspector is going to foot the bill for this. It's also a great way to tarnish the relationship if you were hoping to buy any other properties. 

We bought a house 5 years ago in which our inspector told us the WH would need replaced soon. It's still kicking strong. You never really know with these things. It should cost you about $500. 

This is something you should be budgeting for in Capex anyway.

Idan,

Definitely go after the inspection company.  Especially if they say it looked new and there is a sticker saying 1998.  You would only get back the amount you paid for the inspection, but that is better than nothing.  I don't believe you should get something for nothing, but you paid for the inspection they didn't preform up to normal standards.  Also tell who recommended them what happened.   

The "1998" date you saw on the tag may not be the manufacture date but certification that the water heater meets the standards required on that date. It could have been made many years later than that. If it's bad and needs replacing, it doesn't really matter when it was made. However, I would be curious about the statement that the "water heater has issues". What does that mean? Usually if the tank isn't leaking, it can be feasibly repaired. Obviously don't spend money repairing it if it is actually 20 years old but I'm not sure you have all the data on this situation.

@Idan Narotzki . Your inspector had you sign a bunch of legal disclosures before releasing the report. All those disclosures release them from this sort of liability.

Judging from your posts I think you’re in over your head quite a bit here. I recommend you learn quickly and not buy anything more.

Like I said before you’ll find out pretty quickly that it’s very hard to make money dealing with OOS rental property. That property manager will charge you 900 dollars to install a new one (or around there). I’ll pay 400 to go buy the water heater and install it myself. Over time that adds up quickly, and I’ll do it in half the time the PM takes...

@Jeff Willis I strongly disagree that home inspectors are useless. I think like anything, it heavily depends on the invidious inspector.

The home inspector I Use, owns property himself, spent 5 years running a renovation company and is the ultimate DIY person. (Last I heard he was adding an extra story to his house).. I say all that to show he knows what he’s talking about when it comes to rehab costs, what stuff is broken etc.

I’ll often read the report and then spent an hour or more talking with him about it. Money well spent

I'd be curious if the water heater really needs replacement. So the PM sent there $60 an hour helper to look at the water heater. Water heater wont light, and has a sealed compartment, and t-couplers are a pain in the rear end to change in those water heaters. Handyman figures its easier to change out the whole water heater and easy money. The inspector may know exactly what hes talking about. Best of luck!!

@Idan Narotzki gas tank water heaters in particular have a short life. The new one you install is doubtful to last 20 years. I had a water heater go bad a month after closing. The property had been inspected and same situation, inspector just marked it operational. Ultimately there isn't a way to predict the remaining life of a water heater. There is only two things to check:

1. Is it producing hot water

2. Is it leaking

If it passes these two items, then it would be satisfactory. You can't predict water heater life based on age. I have had a couple last 7 years up to 30 years. The lower quality ones they make today are probably average life of 10-12 years. The only thing I can guarantee is that in the rental business you will replace MANY more water heaters. 

Electric water heaters last longer, but cost more to operate. Still I think it is a good trade off for rentals if you can make a conversion. No flames, no smoke and easy to repair.

@Idan Narotzki . You didn't specify but I assume you paid to have an inspection done before buying. If so, you missed the opportunity to use the 20 year old water to negotiate a price concession. You may have gotten a few hundred bucks. All in replacement would be less than a thousand. Inspectors usually provide value but this one missed by not noting the age of the water heater. That sounds like home inspector 101, everyone knows a 20 year old water heater is beyond its useful life. You could ask the inspector for a partial rebate of their fees. You could also write them a bad review online, which they probably deserve, and do a service for your fellow REI's.

Originally posted by @Derrick E. :

I buy new hot water tanks with every house I buy. Easier to just buy/replace before I get a tenant in there. 

Derrick, Can you please Clarify why? Is it also hard to fix water tenants live in the property?  

Thank you very much!

Originally posted by @Caleb Heimsoth :

Like I said before you’ll find out pretty quickly that it’s very hard to make money dealing with OOS rental property. That property manager will charge you 900 dollars to install a new one (or around there). I’ll pay 400 to go buy the water heater and install it myself. Over time that adds up quickly, and I’ll do it in half the time the PM takes...

Thanks, Caleb,

Out of curiosity: Does it mean that you don't "believe" in PMs, You don't gonna use any?

 

Originally posted by @Idan Narotzki :
Originally posted by @Caleb Heimsoth:

Like I said before you’ll find out pretty quickly that it’s very hard to make money dealing with OOS rental property. That property manager will charge you 900 dollars to install a new one (or around there). I’ll pay 400 to go buy the water heater and install it myself. Over time that adds up quickly, and I’ll do it in half the time the PM takes...

Thanks, Caleb,

Out of curiosity: Does it mean that you don't "believe" in PMs, You don't gonna use any?


I have a PM but I’m pretty hands on when it comes to maintenance, depending what it is and how busy I am.

 

Originally posted by @Idan Narotzki :
Originally posted by @Derrick E.:

I buy new hot water tanks with every house I buy. Easier to just buy/replace before I get a tenant in there. 

Derrick, Can you please Clarify why? Is it also hard to fix water tenants live in the property?  

Thank you very much!

 Replacing water heaters can be messy, of course anything with water can be. I just hate coordinating with tenants, having to replace things unexpectedly, etc. I expect most hot water heaters to last 10 years. Obviously some will last longer and others will last less, but that's what I hope to get out of one. 

With that in mind, when I buy a house I just go ahead and figure that in to my initial rehab costs unless hot water heater was bought within the last year. 

I do most of the work myself so I'm only out the cost of the hot water heater. So to me, its worth the $400 just to sleep well at night knowing that it should last the next 10 years. 

I don't use home inspectors anymore. I just go look at the house myself and check everything out for myself. Home Inspectors don't really tell you anything you can't figure out on your own imo. 

Just walk around with one a couple times when they inspect the house to get an idea of what they do/look for. 

If I was buying OOS then I would definitely use one, but I buy local properties for the time being. 

Hot water heaters, unless the bottom edge is obviously rusting out, are a lot like light bulbs....they work great, until the day they don’t work at all....unless they start leaking.