You Have the Tools for System Inspection

Pumping professionals are well-equipped to evaluate onsite systems. Is it time to consider adding point-of-sale checks to drive new revenue for your company?

As states amend septic codes, some are adding language requiring a certificate of onsite system evaluation before properties transfer. The response to inspectors who report systems as unsatisfactory ranges from cooperation to arbitration and occasional litigation.

Allstate Septic Systems LLP in Bangor, Pa., has performed buy-sell inspections since 1989, with real estate agents providing 25 percent of the business and homeowners the remainder. “We also do a lot of second opinions and support work for other inspectors,” says Allied partner Bruce Fox. “Branching into this field has been great for us.”

Fox, who teaches the Pennsylvania Septage Management Association standards for real estate inspections and the National Association of Wastewater Transporters Inc. vacuum truck technician course, has various ways to identify and avoid the pitfalls of buy-sell inspections.

Pumper:

What is the history behind buy-sell inspections?

Fox:

In the mid 1980s, banks were writing mortgages for newer, larger homes, inheriting their septic problems, and dealing with $10,000 to $15,000 repair bills. About nine years ago, informed buyers and Realtors became the driving factor. Today, Pennsylvania Realtors have a pre-disclosure sales contract containing a check box for a septic system inspection. Now the buyer knows that the property has an onsite system and that he has a right to an inspection.

Pumper:

What are the biggest dangers arising from onsite inspections?

Fox:

One of the biggest is arriving without the seller knowing you are coming. PSMA and NAWT inspector courses teach authorization. The seller authorizes the inspector to come onto the property and identifies who pays for pumping the septic tank. The buyer authorizes who pays for the inspection. Authorization provides communication and removes any surprises.

Another danger is giving information during the inspection. If the homeowner is following you around, keep a tight lip or risk ruining a deal. My inspectors bring the information back to the office, review it, make a decision, and give the report to the payer — usually the buyer. That’s very important.

There’s always the danger of damaging a component while you’re digging it up or pumping it. This doesn’t occur often, but when it does, the seller will say that it is your fault. It then becomes a matter of arbitration. For example, if a cesspool caves in while I’m pumping it for the inspection, I would argue, and to some extent involve my attorney, that the cesspool was an accident waiting to happen, and it happened while I was there. The flip side is if you back your truck over a tank and crush it. Then yes, you have to repair it.

Driveway damage is another big issue. Pumpers deal with this daily, but it is part of the inspection. Inspectors need a release slip stating that they are not responsible for damage caused by driving on the seller’s driveway.

Pumper:

Must onsite inspectors be certified through the state, or health department, or some recognized agency?

Fox:

Most states do not require certification, but there are some exceptions. Massachusetts requires real estate inspections, and Arizona and Texas require home inspectors to take onsite inspection training. Although some states are building buy-sell inspections into their amended septic codes, certification remains mostly voluntary.

The movement for certification is developing, but not widespread yet. Neither is class availability. PSMA trains in Pennsylvania and New Jersey. NAWT trains in Arizona, California, Texas, and anywhere it is asked to present the inspection course. The National Sanitation Foundation has an accreditation program, but that’s it.

Pumper:

Are pumpers doing the majority of onsite inspections?

Fox:

In Pennsylvania, no. Home inspectors seem to receive most of the work. The problem has been pumpers not following inspection standards and exposing themselves to liability. Getting into trouble discouraged them from doing more inspections, especially if they were sued.

Ongoing training is another turnoff for many pumpers. PSMA and NAWT require continuing education every two years, and a standards refresher course every three years to keep up with rule changes. Certified inspectors are trained to locate every system component and rate its condition. They excavate and pump the septic tank. They locate the absorption area by probing, and identify its condition based on liquid levels.

Pumper:

If an inspector fails a system, what risks could he face?

Fox:

My company has been threatened because our report ruined the deal. That’s why it’s so important to follow a standard. Had we arbitrarily condemned the system, the seller and Realtor could have sued us for destroying the sale.

Pennsylvania had a case where the homeowner sued the inspector for failing a system. The inspector had followed PSMA standards, and documentation after the fact proved that his conclusion was correct. Although it destroyed the deal, he protected the buyer from stepping into a bad situation. In turn, the inspector was protected by adhering to PSMA standards. This is critical. Pumpers thinking about branching into buy-sell inspections should be certified through some nationally recognized inspection-training program. It’s their safety net.

What happened when my company was sued remains a risk for pumpers. After pumping the tank, we wrote on our sales slip that it was in good condition. When the homeowners sold the property, they used our slip as proof of an onsite inspection. In the NAWT vac truck training, we teach pumpers to state on their slips that pump-outs are not an onsite inspection or warranty. Never make any comments on your sales slip because Realtors and homeowners will use them. Always write comments on a separate slip of paper.

Pumper:

If an inspector is sued, what is the financial risk?

Fox:

Primarily the cost of replacing the system.

Pumper:

Doesn’t business insurance cover the financial risk?

Fox:

Pumpers must discuss that with their insurance companies. Ours does. We showed our agent how we do inspections, how we gather information, and how we report it so he could determine our liability exposure. Having certified inspectors was a great plus in this discussion, and the agent approved our liability coverage.

Pumper:

How often does buy-sell litigation reach the courtroom?

Fox:

Not too often. In 20 years, I’ve been an expert witness in four cases. It’s difficult to prove when a component failed if an onsite problem manifests itself six months after the sale. If it happens immediately, the probability is high that the situation will be resolved through arbitration. Usually, the seller knows the system has a problem, but didn’t disclose it. When confronted, he pays for the repair.

One nationwide trend is elderly people selling their homes with old systems to young couples with children. In our inspection, we ask how many people live in the house now and how many are in the perspective buyer’s family. If the difference is huge, we recommend a hydraulic load test to check that the system can handle higher loads.

Pumper:

Should pumpers diversify into buy-sell inspections to increase business?

Fox:

It’s been great for us. If we report a system as unsatisfactory and show the seller the problem, most ask, “What do I do next?” Seventy-five percent of them hire us to fix it. That’s good for business. People have accused me of simply wanting to sell systems, but once I show them what we found, they usually acknowledge the problem.

It’s human nature to assume that the other guy wants to sell you his product. That’s why it’s vital for inspectors not to talk to sellers or try selling something while conducting inspections, or put sales pitches in their reports. However, the report should contain a recommendation to contact a reputable onsite repair company, and let the homeowner decide who to hire. This needs to be stressed if inspectors are to avoid the appearance of conflict of interest.

Another reason pumpers should consider this field is that home inspectors don’t have the equipment to do a proper inspection. Pumpers own vacuum trucks, and our standards require a pump-out at the time of inspection. Pumpers who can’t find the absorption area will send down a sonde. If a home inspector can’t find the absorption area by probing, he’ll call us to do the support work.

Many home inspectors can’t get a septic company to the site on time. However, we’ve aligned ourselves with home inspectors. If they want us somewhere at three o’clock, we’re there at three o’clock. That policy is great for repeat business. So even if pumpers don’t want to be inspectors, those who position themselves as subcontractors with inspectors can increase their business.

Bruce Fox may be reached at 610/498-3111.



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