Thursday, December 15, 2011

Where did the copper go?

What a way to start your day! Where do I begin to write this up? Air conditioning system inoperative does not quite fill the bill, does it?


At least the fool had the good sense to pull the electrical disconnect before he began his dastardly deed. There are homes all around this home. Was anyone paying attention?

Sunday, March 13, 2011

What a client thinks

Unsolicited comment from a recent client:

I was recently involved with inspection of a large home completely enveloped in EIFS (Synthetic Stucco) which has been a serious concern for many years. As part of that inspection Emory Widener, an EIFS inspector, was involved in a survey of the condition of the EIFS wall system discovering moisture damage and areas of concern. Here are exerts from an e-mail addressed to Emory and I received from that client:
"I would like to inform you two gentlemen that I have gone ahead and now made the Earnest Money Deposit … Thus, I will be buying the house.

I'm sure that especially you, Chris, will find this piece of news interesting, given that you kindly took a lot of your personal time to share your thoughts with me and to write out for me your advice on the whole matter of the EFIS.  Emory, you too spent a good amount of time with me on the phone one morning, about this same issue.  I thank you both wholeheartedly for your time and your willingness to share your honest and professional views so that I could come to a decision made with confidence and without great anxiety.

Fellows, I so much appreciate any of your personal time that you two could give me regarding this matter.

As always, my best regards to you!"
What do you think, should I feel good? Does that sound like a "deal killer" to you?

Saturday, March 12, 2011

Ponds

Ponds are beautiful to look at, but they can be a headache and expensive if not maintained properly. Many ponds are man-made and have dams that require maintenance and repair. Some dams fall under the jurisdiction of the state’s Dam Safety Program (http://www.dlr.enr.state.nc.us/pages/damsafetyprogram.html ). Ponds can also become choked with aquatic weeds that affect plant and animal life. For information about ponds, check the following Web site: http://www.ces.ncsu.edu/nreos/wild/fisheries/index.html Before purchasing property with a pond, find out the status of the pond from the owner. The Dam Safety staff in the DENR regional office that serves your area may be able to provide you with information about any dams that are regulated by the state. The county Cooperative Extension Service may be able to help you with information and guidance if you’re thinking about buying land with a pond or want to build a pond on the property. A county-by-county listing of local Cooperative Extension Service offices is available through the following Web site: http://www.ces.ncsu.edu/index.php?page=countycenters

Sunday, February 20, 2011

Weeping Over Weep Holes

This is a rewrite of an article for my November 4, 2000 Newsletter

If you don't intend to read this in its entirety, then stop NOW because you will just be more confused than ever.

Weep Holes
Over the past few weeks I have been hearing about, conflict, lack of understanding, confusion, upset buyers, sellers and Realtors over the issue of a home inspectors report of the lack of weep holes in the brick veneer walls of a two year old home. Luckily for me, I was not involved in the inspection, but several Realtors I know well and two home inspectors whom I am in contact with often were involved.

Here are some of the issues I heard about being bounced around:
  • Are weep holes required by code, and if so since when?
  • If they are required, why did the builder of this two-year-old home not install them?
  • Why did the local building inspector approve the home without them?
  • What does a weep hole do?
  • Why is it a big deal if they are left out?
  • Who should be responsible for installing weep holes after the fact?

Are weep holes required by code, and if so since when?

First let me make it very clear that pre-sale home inspections are not code inspections. However, many of the issues we raise are also code issues and this is a good example. Here is what the current building code (2000) says about weep holes:

North Carolina State Building Code Volume VII – Residential:
703.7.4 Weep holes. Weep holes shall be provided in the outside wythe of masonry walls at a maximum spacing of 48 inches on center. Weep holes shall not be less than 3/16 inch in diameter. Weep holes shall be located immediately above the flashing.

Where is flashing required per the code?
703.7.3 Flashing. Flashing shall be located beneath the first course of masonry above finished ground level above the foundation wall or slab, and at other points of support, including structural floors, shelf angles and lintels …
703.8 Flashing. Approved corrosion-resistive flashing shall be provided at top and sides of all exterior window and door openings … at the intersection of chimneys or other masonry construction with frame or stucco walls … under and at the ends of masonry, wood, or metal copings, sills; continuously above all projecting wood trim; where exterior porches, decks or stairs attach to a wall or floor assembly of wood-frame construction; at wall and roof intersections.

In simple language, weep holes are required in masonry walls at the top of the foundation wall, below all window and door sills, at the top of all window, door and any other wall opening, at supporting points, at shelf angles, at copings, projecting trim, wall and roof intersections.

If you were aware of weep hole requirements, I bet you only knew about their requirement at the top of foundations. Sorry, that's not the only place.

How long have they been required?

I didn't take the time to check this out, but I can tell you this. I started in construction as a mason while a teenager and I am now sixty years old. There has never been a time when I did not install weep holes.

Why did the builder of this two-year-old home not install them?

That's a good question but easy to answer. Most builders don't build homes, subcontractors build homes. How many times have you seen a homebuilder or even one of his employees installing brick or for that matter even watching it being installed? If the sub doesn't do it correctly, unfortunately I am ashamed to say, many builders aren't managing their jobs closely enough or just plain don't know the difference.

Why did the local building inspector approve the home without them?

To be very blunt, he shouldn't have. Do the local code enforcement inspectors miss issues like this? Every day. Why are they missed? For many reasons, over worked, over scheduled and under paid is a good one and I am sure there are many others. Say what ever you like, but it boils down to this: Code enforcement inspectors are not responsible for code compliance, builders are. Builders must know the code and demand that their subcontractors meet code requirements.

What does a weep hole do?

Masonry walls leak. A tightly tooled mortar joint is a masonry walls first line of defense against water penetration. Slick concave joints are best, slick “V” joints are next. Flush joints are fair. Joints raked out after they have begun to dry, beloved by residential masons and used on most homes today are not good, and rake joints beloved by architects because they cast a shadow are guaranteed to trap water on their ledges and greatly increase water penetration. Brick work with irregular lines and ledges as has been popular in the past and coming back into popularity today make walls less water tight and create ledges for penetration. Water can pass through a crack that is only 1/100” wide. A square foot of brickwork with cracks that size around each brick will have voids equal to a hole that has a diameter of about 1”. These hairline cracks are almost invisible; yet allow much water to enter the wall. Adding to all of these issues is the fact that although brick manufactures have for years attempted to beat into masons brains that all brick joints must be full of mortar without voids, few if any homes are constructed today or have been constructed in the past which met this requirement.

The water is coming in and weep holes constitute the second line of defense against this water becoming a problem by controlling the water, which has penetrated the walls. They usually are open vertical mortar joints spaced regularly around the house near the top of the foundation. Ideally, although required but seldom seen, they also should be provided at the top and sills of windows and doors. These openings in the wall allow the water that accumulates on the flashing from the failure of the first line of defense to drain to daylight.

Weep holes have a secondary function. Weep holes help equalize air pressure on both sides of the wall, making it less likely that wind-driven rain will penetrate the wall. When water does penetrate the wall, weep holes expel it, and ventilation through the holes helps dry the wall cavity. Ventilating weep holes also allow any condensation that accumulates on the inner surface of the brick to dissipate.

Why is it a big deal if they are left out?

This is minor, it can be much worse that this!
The absence of weep holes occasionally may allow so much moisture to accumulate that metal fasteners turn to rust, wood-destroying insects are encouraged, or rot develops. It is unlikely that a nondestructive visual home inspection will reveal these problems unless they are so severe that cracks in the walls or other manifestations are accessible to visual examination. The most likely visual manifestation of a problem will be water stains, damp areas or rot at the foundation plate and or floor band and stains or damp areas at the top of the foundation wall. Another is leaks and stains around windows and doors, at roof to wall transitions or chimneys. I have personally witnessed severe damage which appeared to have been caused by the lack of weep holes and/or flashing. Unfortunately, not only do inspectors find weep holes missing, but often we find them filled up because someone though they were just holes needing to be repaired.        

Who should be responsible for installing weep holes after the fact?

I guess that will be left up to the judge and jury, but I will state my personal opinion. Failure to install recommended and/or required weep holes constitutes negligence and is the responsibility of the contractor of record. This is not a warranty issue for which the contractor's responsibility disappears after one year. As I often tell contractors: Fail to do it correctly, and you sleep with it at night and live with it forever. This is just one of the many reasons I am no longer a contractor and am now a pre-purchase home inspector.    

Reality

This week as I have driven from one inspection to another I have been looking for weep holes. Based on this week, as well as my past experience, in the newer developments they are for the most part clearly evident at the top of the foundation, hardly ever anywhere else. In older developments except for large track builders, they are often in fact almost always missing. If all of the pre-purchase home inspectors wrote up the lack of weep holes on every home we inspect you should buy stock in any company that manufactures drills and masonry drill bits and might ought to consider going into the weep hole installation business.

I will not pretend to speak for other home inspectors, but this is how I handle this issue. I am not a code enforcement inspector. In many instances I must make a judgment call on what I write up. On older homes I can't just consider code or best practices, I must consider what may have been a generally accepted practice at the time the home was constructed. Considering the amount of older homes I see without weep holes and based on my past experience, it is my opinion that the installation of weep holes at some point in the past, even if it was part of code, was not a generally accepted practice and appears to have been ignored by code enforcement officials. Therefore I must make a judgment call because I believe that is what my client is paying me to do. If I think the age of the home relates to the time when this was not a generally accepted practice and I see no visual evidence of this being a problem then I don't even address the issue in my inspection and or report. If on the other hand I see visual issues which could be attributable to the lack of weep holes it becomes an issue that I address on site with my client and include in my report.

I believe that weep holes at the top of the foundation, today and in recent years, is not only a code requirement but is a commonly accepted practice. Weep holes at other locations may be code, but has not become a commonly accepted practice even though it should be. To be honest, I see problems at these other locations from lack of or improperly installed flashing, but I can't say that I am aware of problems from the lack of weep holes. If the home is new construction or fairly recent construction the issue of weep holes at the top of the foundation will definitely be addressed both on site and in my report and someone had better get out the drill and their wallet or be willing to live with it.

Yes, I did say that I think this issue is the responsibility of the builder even after the one-year warranty period. If the home is new, or recent construction I definitely recommend going after the builder and demanding correction of his negligent workmanship. Reality is that many builders after one year will not respond largely because they know the owners are more than likely going to be forced to deal with the issue on their own and are not willing to deal with the time, lose the sale or bear the legal expense required to force the builder into compliance. Reality is whether the seller and buyer likes it or not they are going to be forced into negotiations relative to how this will effect closing their deal. The choice to live with it or bear the expense of repair is more than likely going to be theirs to decide and your commission will hang on the results.

These little holes didn't appear so important before today, did they?

Friday, February 11, 2011

What Dr. Oz says about Radon

Don't accept my word on Radon! Do you have any trust in a guy named Dr. OZ of Oprah fame? Check out these two segments of a show he did on February 10, 2011 on this subject:

Dr. Oz on radon part one

Dr. Oz on radon part two

Tuesday, February 8, 2011

Dr OZ - Radon and Lung Cancer

This Thursday, February 10, 2011 NCHH Executive Director, Rebecca Morley will be on the Dr. Oz show! She will be talking with Dr. Oz and an affected family about radon-related lung cancer.

There is a teaser for the segment online at:

Radon and Lung Cancer on The Dr. Oz Show!

Dr. Oz is on FOX at 9:00 AM in the Triad. Please check your local listings to verify times. Be sure to tune in or TiVo!

Wednesday, January 26, 2011

Fraudulent Home Inspectors

Yes, unlicensed home inspectors are functioning and defrauding the unsuspecting public in North Carolina and in the Triad! The last experience I had with one the client was thrilled with their home inspection and their inspector. Unbeknownst to them his inspection and report came nowhere near meeting required North Carolina standards. His report is in front of me as I write this post. These folk were defrauded, up front, to the tune of $250.00. Unfortunately, that may not be all. What did this inspector fail to point out? How much may it cost for repairs?

Who will protect you or your clients from unlicensed, deceptive, fraudulent Home Inspectors?

You will find, as I have experienced, that there is not very much protection. The first line of defense is information and it will begin in this post. Yes, there are people posing as home inspectors with an intent to defraud and deceive the public for their personal gain. There are more than one but I have personal experience with one and he has been deceiving unsuspecting home buyers and real estate agents in my service area FOR OVER TEN YEARS. He has been arrested, in the past, through the efforts of local home inspectors and real estate agents. He has been prosecuted and it is very possible he may continue, as in the past, to ignore the law, book and perform home inspections with you or your clients.

I can assure you that the only person who will stop him is YOU. You must refuse to deal with someone who's full intent appears to be to defraud you and your clients. In the past the unlicensed home inspector I have experience with has functioned under the name "A Buyers Home Inspector" and his name is John Salstrom. In his most recent episode, of which I am personally aware, a Realtor's client advised that they had booked their own home inspector. John Salstrom is who showed up. Following the inspection the Realtor called me to inquire about this person, I advise that he was not a licensed home inspector, requested a copy of the report and turned him in to the licensure board again!

John was prosecuted again by Forsyth County for this infraction. John plead guilty on January 7, 2011 to one count of inspecting a house without a license and received a prayer for judgment and was fined court cost. He has been fined and paid before! Yes, he may be on the loose again now or in the future inspecting homes without a license. I have learned from my involvement in this process over ten years that there isn't much the counties or state can or will do about such a person other than smack their hand, fine them and turn them loose again on an unsuspecting public. You are on you own.

Here is a page out of the 2009-2010 AT&T Real Yellow Pages where you will note John's add circled in red right along side of real home inspectors. Note that it is the most expensive, obvious and eye catching of the adds. Isn't that interesting. He uses "A" at the beginning of his company name to place the add near the top to catch your attention.


Here is the add blown up so you can read it:


Looks for real, doesn't it? Don't be deceived, John is not a licensed home inspector in the State of North Carolina and hasn't been for over TEN YEARS! Here is as much of his record as I am aware of. I don't doubt that there is much, much more I am not aware off.

You will find the public record of John Salstrom's experience with the North Carolina Home Inspector Licensure board posted on their website at:

http://www.ncdoi.com/OSFM/Engineering/HILB/NCHILB.asp

Here is what it says:
SALSTROM, John P. (99) REVOKED
Complaints filed: April 27, 1999, November 5, 1999, and September 19, 2000 (Greensboro and Winston-Salem)
License Revoked.

I am aware that John was previously arrested, prosecuted and fined in Forsyth County in 2001 for conducting a home inspection without a license.

So there is no doubt about this claim. Please allow me to document that a guilty plea was entered by John Salstrom for Inspecting a House without a License in District Criminal Court, Forsyth County. The charge against Salstrom, “Obtain Property False Pretense”, is for his charging a fee for doing a home inspection without an active license with the Home Inspectors Licensure Board of North Carolina.

Below is a notification letter dated January 10, 2011 from the District Attorney (21st District) received by the NC Dept of Insurance Criminal Investigator in this case.  Also below is copy of a February 2, 2004 cease and desist letter from the 18th District, Guilford County District Attorney that notes a prior conviction on or about July 19, 2001.

Mr. Salstrom had multiple complaints filed against him when he was licensed that were addressed through consent agreements. On September 29, 2000 he surrendered his license. Still, after 10 years he continues to mislead the public.



Who will protect you?

You can only protect yourself!
 
Every licensed Home Inspector in the State of North Carolina has an identification card with his license number and expiration date. So that you know what one looks like, here is mine. Demand proof that you or your clients inspector is a properly licensed North Carolina Home Inspector! If he or she (yes there are female inspectors!) can't provide proof, protect yourself and your clients, call someone else! Have doubts, call the Licensure Board in Raleigh at (919) 662-4480.

 Are you displeased with the way this issue is being handled in your county? Make your District Attorney aware! Is your local Realtor's association keeping you informed on this issue? This has been going on for over 10 years. Were you aware? Why not?

Friday, January 14, 2011

Asbestos in the Home

This article was provided by and posted at the request of PleuralMesothelioma.com, committed to providing the most comprehensive and up-to-date information on pleural mesothelioma cancer. PleuralMesothelioma.com is the Web's most inclusive resource solely dedicated to this rare cancer.
Please be aware that home inspections, as regulated in the State of North Carolina and most other states, do not require the home inspector to address asbestos or any other potential environmental concern in the home. This and most home inspectors exclude asbestos and environmental issues as part of their inspection process. That being said, this inspector, should he observe any issues which might indicate asbestos in the home, will suggest further evaluation by the appropriate professional.

Asbestos in the Home

Click here for a larger view!
Asbestos was highly regarded throughout the 20th century as an ideal building and construction material. It’s fire resistant, durable and versatile qualities made it sought out by many industries. Typically found in insulation's, piping, popcorn ceilings, roof shingles and flooring, asbestos was used throughout the 20th century as a form of insulation for piping, roofing and flooring.

Many homes and buildings built prior to 1980 may still contain asbestos, but even homes built in the years after may harbor asbestos.

Because vermiculite is also an inexpensive and readily available mineral, it is an important addition in many of products that we use every day to insulate our homes and fertilize our gardens. When it is tainted by impurities such as asbestos, it can be extremely harmful to the health of your family. Although Vermiculite alone does not contain asbestos, it came from one single mine that contained a large amount of asbestos.

Homeowners and inspectors should be aware that even vermiculite insulation from the 1990’s can contain asbestos and the proper precautions should be taken to avoid unnecessary problems and potential exposure to this material.

Asbestos Tips and the Value of a Home Inspection

According to the experts, the general rule of thumb is if the asbestos is in good shape, it's posing no apparent risk. If it's in bad shape, it could be a problem. It is recommended for homeowners to leave any suspected asbestos alone, as this can takes its fibers airborne and this is where it becomes dangerous. Removal of asbestos, if necessary, must be performed by a licensed contractor.

Receiving a professional home inspection is something that cannot be understated. Many building substances can become a problem for homeowners due to the negative health effects that can occur if not identified. A professional home inspection is extremely important to protect your investment. Professional consultants can provide an evaluation of the home and will identify material defects in structures and components of the home, in adherence to or exceeding national, state, and industry regulations and standards.

Not only should potential home buyers take this into consideration, but those performing demolition, renovation or abatement must take precautions to avoid exposure at all costs. Generally, asbestos appears in roof shingles, attic insulation, dry wall board, popcorn ceilings, joint compounds, electrical wires and furnace cement.

Asbestos fibers are thin and strong, and when inhaled frequently, an individual can develop mesothelioma, a rare but severe lung ailment caused by asbestos exposure. There are a number of factors that can impact mesothelioma survival rate. These factors include latency period, age of diagnosis and cigarette smoking.

GREEN Alternatives to asbestos

There are many green, Eco-friendly materials that replace the need for asbestos and can reduce energy costs annually. The implementation of Eco-construction, green energy solutions will play an important role in the transformation to a healthier and sustainable world.

Green alternatives to asbestos include the use of cotton fiber, lcynene foam and cellulose. Cotton fiber is made from recycled batted material and treated to be fireproof. A water based spray polyurethane foam, lcynene features no toxic components. These green options have the same beneficial qualities as asbestos, minus the health deteriorating and toxic components.

By having a professional contractor inspect your home, you can avoid the stress and problems associated with not knowing that asbestos and other harmful building materials are present in your home.

For additional information visit Asbestos.com and/orPleuralMesothelioma.com

Saturday, December 25, 2010

Merry Christmas!


We wish you and your family a very Merry Christmas and a Happy and prosperous New Year.

Chris D. Hilton, Home/Building Inspector
Pam Hilton, Broker, Coldwell Banker Triad, Realtors

Thursday, December 23, 2010

Oops! Santa Claus Hit by Aircraft

Yes Virgina, there was a Santa Claus
There will be no Christmas this year, so please tell your children, unfortunately, Santa's Sleigh and reindeer were taken out during a routine training mission the other day over New York City. Unfortunately, I am sad to say, there was a Mid-Air collision with an airliner full of passengers. The aircraft took off from La Guardia and climbed to approximately 4,200 feet AGL (above ground level) according to the NTSB (National Transportation Safety Board) where it struck Santa Claus.

The visibility was not a factor, as it was a perfectly clear day. The pilots did not see the Bright Red Sleigh or rotary beacon, or even the flashing red nose of Rudolph. Apparently, they were busy text-messaging to Paris Hilton's Twitter account, while the other was talking to a real estate salesman about buying a new Lake Tahoe second home REO, which was heading into foreclosure.

"Oh, it was just a horrible mess and most of the reindeer were sucked into the large engines," said Margret Morgan-Winthrop a first class passenger on the jet. She also said, "But, the engines didn't quit because they are GE Jet Engines and did I tell you, I have stock in GE. Too bad Santa wasn't using GE Engines too, instead of that old reindeer technology, he really should have upgraded," she added.

The pilots claimed the passengers were never in danger and they did not overfly the airport like the other incompetent crew recently, nor did they have to ditch in the Hudson, because this was a Boeing Aircraft, and even with the debris in the engine from all those reindeer, the airliner continued on its way. At first, the FAA assumed it was a terrorist strike from an Islamic Radical group which hijacked a business jet, so they shut down the national aviation computer system, claiming it was a glitch.

Later, they turned it all back on, thankfully, so no one else was inconvenienced. Unfortunately, as you know Santa is gone and there will be no Christmas this year. Santa Claus LLC is seeking Stimulus Bailout money to prevent a bankruptcy now in light of this news.

If you don't appreciate this news now, you will when you receive your credit card statements!

Sunday, December 12, 2010

New Offer to Purchase and Contract

The new revisions to the North Carolina Real Estate Offer to Purchase and Contract will drastically affect how home inspections will be addressed as part of your real estate transaction in the future. The playing field and rules have changed. What we as home inspectors do has not changed, but how you will handle the results of what we do as a buyer, seller or Realtor will change. In my opinion this is a good change and is long overdue.

This information is provided for home inspectors from the NC Bar Association and NC Association of REALTORS® regarding changes to the Real Estate Offer to Purchase and Contract effective January 1, 2011.

SIGNIFICANT REVISIONS TO OFFER TO PURCHASE AND CONTRACT
By Bob Ramseur, Miriam Baer and Will Martin*

Home inspectors should be aware that significant changes to the Offer to Purchase and Contract (form 2-T) have been approved by the NC Bar Association and the NC Association of REALTORS®. The new form will be released effective January 1, 2011.

Content and format. A great deal of the content of the current form (copyright 7/2008) has been carried forward into the new form. The organization of the current form has also been significantly changed to group related provisions in a more logical way. For example, defined terms are grouped together in a new “Terms and Definitions” paragraph at the beginning of the new form, and buyer and seller representations and obligations are grouped together in paragraphs 5 through 8.

“Alternative 1” replaced with “due diligence” approach. The most significant change in the new form is the elimination of the current “Alternative 1.” Doing away with Alternative 1’s complicated repair negotiation structure will help reduce many of the disputes that have frequently been stumbling blocks to the negotiation of repairs, including disputes over whether an item is “covered” under the list of items in Alternative 1, whether an item is “performing the function for which intended” or is “in need of immediate repair,” whether repair requests and responses to repair requests are timely, whether an item is includable under the Cost of Repair Contingency, whether the estimated cost of repairs is reasonable, and whether and when a contract is “over” following a breakdown in repair negotiations.

Replacing Alternative 1 is a new “Buyer’s Due Diligence Process” paragraph (paragraph 4). During an agreed-upon “Due Diligence Period,” the buyer will have the opportunity to investigate the property and the transaction to decide whether the buyer will proceed with or terminate the contract. Prior to the expiration of the Due Diligence Period, the buyer may terminate the contract for any reason or no reason by written notice to the seller. If the buyer decides to terminate, time is “of the essence” regarding the notice of termination.

The new due diligence paragraph is similar to Alternative 2 in the current Offer to Purchase and Contract but differs from it in some important respects. First, unlike Alternative 2, the description of the due diligence process in paragraph 4 in the new form includes a significant amount of guidance to the parties to aid them in understanding the things they should consider doing during the due diligence period. Examples listed of things that the buyer may consider doing during the due diligence period include conducting inspections to determine the condition of improvements on the property, reviewing relevant documents such as restrictive covenants, conducting an appraisal and a survey of the property, investigating current or proposed zoning, the availability and cost of property insurance, potential flood hazards, and pursuing qualification for and approval of any loan that the buyer may need to obtain to purchase the property. The buyer does not have to do all or any of the listed items, but it is important that any of those items that the buyer does choose to do should be done during the due diligence period.

Repair negotiation. Regarding the negotiation of repairs, Paragraph 4 in the new form specifically states that the parties may, but are not required to, engage in repair negotiations. There is no limitation on what the buyer can ask the seller to repair, and there is no obligation on the seller’s part to repair anything. The buyer is advised to make any repair requests in sufficient time to allow any repair negotiations to be concluded by the end of the due diligence period. There is a “Warning” to the buyer in paragraph 4 that unless the seller agrees in writing to an extension of the due diligence period, the buyer should terminate the contract if the buyer is not satisfied with the results or progress of the buyer’s due diligence.

If the buyer chooses not to terminate prior to the end of the due diligence period, the buyer would lose any right to terminate the contract later based on any matter that should have been addressed during the due diligence period. However, the buyer would not lose all rights to terminate after the end of the due diligence period. The “Note” at the end of paragraph 4(g) makes it clear that the buyer would retain any right to terminate for any other reason permitted under the contract or North Carolina law. For example, if the seller was unable to deliver a deed conveying marketable and insurable title (see paragraph 8(a)), that would be considered a breach of contract by the seller. Paragraph 8(l) specifically provides that the buyer would be entitled to a refund of the earnest money deposit and any due diligence fee, and reimbursement for reasonable costs incurred by the buyer in connection with the buyer’s due diligence.

Separate loan condition eliminated. It is important to understand that there is no longer an independent loan condition in the contract. If the buyer has to obtain a loan to purchase the property, the buyer will be entitled to pursue qualification for and approval of the loan during the due diligence period. Depending on the length of time the buyer and seller agree that the due diligence period will last, it’s quite possible that the buyer won’t know for sure when the due diligence period expires that the loan will be approved. Thus, prior to the expiration of the due diligence period, the buyer will need to make a decision based on the information from the lender at that time whether to terminate or proceed with the transaction. If the buyer terminates the contract, the buyer gets the earnest money deposit back. If the buyer proceeds with the transaction and the lender doesn’t approve the loan for some reason, the buyer would lose the earnest money deposit if the buyer was unable to close without the loan.

Is it fair to make the buyer put the earnest money deposit at risk? Recall that the loan condition in the current contract was completely rewritten in 2008. Prior to that time, the loan condition extended right up to the date of closing and if the lender decided not to make the loan at the last minute, the buyer could terminate the contract and get their earnest money deposit back. Many felt this was unfair to the seller. It was felt that the loan condition should be changed to more fairly balance the risk between the buyer and seller of the sale not closing due to the buyer’s loan not being approved. This was accomplished by shifting that risk to the buyer at some mutually agreeable date during the transaction. The new due diligence contract uses this same basic approach. The date that the risk shifts to the buyer is the date that the due diligence period expires.

What’s a fair period of time to give a buyer to make a decision? The buyer typically would like for this date to fall as close to the closing as possible and the seller typically would like for this date to come sooner in the process. Just as the sales price is negotiable, the date that the buyer has to make a decision to terminate or move forward is a matter of negotiation. The “Note” at the end of paragraph 4(a) in the new Offer to Purchase provides: “Buyer is advised to consult with Buyer’s lender prior to signing this offer to assure that the Due Diligence Period allows sufficient time for the appraisal to be completed and for Buyer’s lender to provide Buyer sufficient information to decide whether to proceed with or terminate the transaction.”

Due Diligence Fee. The “Due Diligence Fee” is defined in paragraph 1 of the new form as “[a] negotiated amount, if any, paid by Buyer to Seller with this Contract for Buyer’s right to conduct Due Diligence during the Due Diligence Period” (see paragraph 1(i)). The payment of a due diligence fee 3 is not mandatory under the new version of the Offer to Purchase and Contract. That’s the second significant difference between the due diligence provision in the new form and Alternative 2. To address concerns about the enforceability of the contract in situations where no due diligence fee is paid, a mutual waiver of any defense to the enforceability of the contract based on the absence or alleged insufficiency of any due diligence fee has been added at the end of paragraph 1(i).

The amount of the due diligence fee will be influenced by such things as the market for the property and the time it’s been on the market, the buyer and seller’s personal circumstances, and the length of the due diligence period. In determining how much due diligence fee he or she is willing to pay, a buyer should clearly understand that the fee is generally non-refundable (with some exceptions listed in the Due Diligence Fee definition) and that the seller is not required to make any repairs to the property or agree to any other concessions that the buyer may request. On the other hand, in deciding how much of a fee to accept, the seller should clearly understand that the buyer may walk away from the transaction for any reason or no reason, even if the seller is willing to fix everything that the buyer may request or agree to any other  concessions, and that the due diligence fee is all the seller is going to get for taking the property off the market during the due diligence period.

Other significant changes. Other significant changes include the following:
  • The separate appraisal, loan, and flood hazard conditions have been eliminated since obtaining an appraisal and investigating the availability of any necessary financing and potential flood hazards, among other things, will become part of the buyer’s due diligence.
  • The new form recognizes a distinction between “settlement” and “closing” “Settlement” is when all the documents are signed and delivered to the settlement agent along with the funds necessary to complete the transaction. “Closing” is a process that includes the settlement, as well as the title update following settlement, the settlement agent’s receipt of authorization to disburse all necessary funds and the recordation of the deed(s) and any deed(s) of trust (see definitions in paragraphs 1(k) and 1(m)).
  • The seller’s damages in the event of a breach of the contract by the buyer are limited to the earnest money deposit (see paragraph 1(e)). A seller’s damages can be difficult to determine, and unless the contract sales price is greater than the appraised value of the property at the time of the contract, the seller may not have any significant damages if the buyer breaches the contract. Limiting the seller’s damages to the earnest money deposit will give the parties greater certainty during the negotiation process about possible outcomes if the transaction doesn’t work out.
  • An attorney fee provision has been added in paragraph 1(g) in an effort to help discourage frivolous disputes over earnest money.
  • The separate “Fuel” provision and the necessity of measuring the amount of fuel in any tank(s) prior to closing has been eliminated. In the new form, the buyer will be entitled to whatever fuel may be the tank(s) at Settlement (see paragraph 2).
  • New representations by the buyer have been added regarding other property that the buyer may need to sell and the buyer’s financial ability to complete the transaction (see paragraphs 5(b) and 5(c)).
  • New representations by the seller have been added regarding length of the seller’s ownership of the property, whether the property is the seller’s primary residence and whether there is an owners’ association (see paragraphs 7(a), 7(b) and 7(e)). The length-of–ownership representation has been added in response to loan underwriting guidelines which now commonly require that a seller has owned the property for a minimum period of time. The representation regarding primary residence was added as a result of a new North Carolina law that requires a statement whether the property includes the seller’s primary residence to be included in a deed conveying the property
  • The new form requires the attachment of an “Owners’ Association Addendum” if there is an owners’ association (see paragraphs 7(e) and 8(k)).
  • The existing “Delay in Closing” provision has been simplified as a result of confusion about how it worked and a few reported problems associated with the payment of accrued per diem interest. In the new form, the per diem interest provision has been eliminated and the permitted delay shortened to fourteen days (see paragraph 13).
  • In the “Fixtures” paragraph, “range/stove/oven” has been added to the list of fixtures to address the common understanding between the parties that such a device generally remains with the property. This addition will eliminate the need to add such a device in the Personal Property paragraph of the contract. In addition, the word “attached” has been added in front of “wall and/or door mirrors” primarily to distinguish bathroom mirrors that are hung like pictures from those that are attached to the wall in a more permanent way.
Changes to other forms. Corresponding changes have been made to the Offer to Purchase and Contract—Vacant Lot/Land (form 12-T) and the Guidelines for completing both forms have been updated. The  various addenda to the Offer to Purchase have been updated and a new, separate Offer to Purchase and Contract for new construction has been developed.

A “Sample” of the new Offer to Purchase and Contract is available via the following link: http://www.ncrealtors.org/uploads/050310sample2-T.pdf.

*Bob Ramseur and Miriam Baer are members of the Real Property Section Council of the NC Bar Association and are co-chairs of the Joint Forms Task Force, which is responsible for maintaining residential forms that are jointly-approved by the Bar Association and the NC Association of REALTORS. Will Martin is a member of the Real Property Section and the Joint Forms Task Force and acts as NCAR’s General  Counsel.

Saturday, November 27, 2010

Don't lick your deck!

This is a rewrite of an article in my Newsletter of January 11, 2003

This is me in today's economy! Not quite yet.
If you can visualize, when I originally wrote this article (I have since sold this house) I was sitting in my den looking across my laptop computer at the TV thinking about past newsletter articles. I was wondering when backdrafting of someone's combustion appliance may cause a problem, if problems with the T & P valve on their water heater may send it through their roof or if much of their conditioned air is being sucked out by their attic power ventilator.

Out the window over the TV was my wonderful three-level deck constructed of the finest grade of CCA treated lumber. You did know I was once a real contractor. It does have a few advantages. During the summer my wife and teenage daughters sun bathed on that deck. Then it hits me; this stuff may harm my grandchildren and yours. Hence today's article.

Warning: Don't lick your deck!

Great deck licker!
All right now, get your dirty little mind out of the gutter. I didn't even think about what you just thought until my little "Realtor" wife said "Lick WHAT?" And you think I'm a dirty old man.

Are you aware that it has now been determined that your deck may kill you and those you love? What is this world coming to? Is there nowhere I can relax without being concerned for my safety, not to mention yours? Did you realize that if you really want to poison your spouse you could rub their steak (or hamburger for those who are in a slump) across the boards on your deck just before throwing them on the grill and add arsenic as a tenderizer? You don't even need to visit the hardware store for rat poison and there will be no record of your purchase of the arsenic. Yep, what do you think keeps them dirty little "T-devils" (what I call termites) out of that there green lumber on your deck.

This is not my deck
Look out your rear window, is there a deck constructed of treated wood on your home? Most of you have one. It may be, or was at one time, "green." What about in the backyard or at your child's neighborhood or school playground is there play equipment constructed of treated wood? What about the house you just listed or sold? If so, you had better pay attention to this.

Per our Environmental Protection Agency, as of February 12, 2002, we were informed of the "voluntary decision by industry to move consumer use of treated lumber products away from a variety of pressure-treated wood that contains arsenic by Dec. 31, 2003, in favor of new alternative wood preservatives." You did get that "voluntary" didn't you. This was a major component of the construction industry and you can be assured that "voluntary" means they had seen the writing on the wall and the guillotine is about to chop off their heads. Did their taking action before the disaster happened to protect their interest? You have heard the words "class action law suite" haven't you? What better defense than "We determined it was a problem and we have voluntarily steered in a different direction."

So, why should I not "Lick my deck?" You know that I know you are not quite strange enough to walk out the back door and lick your deck, don't you? Well, maybe a few of you would. I have seen a few strange ones, but we won't get into that, you know there are no strange home inspectors and absolutely there are no strange builders or Realtors. I think I know a few of all of the above that have been licking their decks and it has affected their brain. Sorry, I'm rambling.

This transition affected virtually all residential uses of wood treated with chromated copper arsenate, also known as CCA, including wood used in play-structures, decks, picnic tables, landscaping timbers, residential fencing, patios and walkways/boardwalks. By Jan. 2004, EPA did not allow CCA products for any of these residential uses. Be aware, most of what you know as "treated wood" in existing structures constructed prior to 2004 is this product!

"This action will result in a reduction of virtually all residential uses of CCA-treated wood within less than two years," says EPA Administrator Christie Whitman. "Today's announcement greatly accelerates the transition to new alternatives, responding to market place demands for wood products that do not contain CCA. This transition will substantially reduce the time it could have taken to go through the traditional regulatory process." I guess this mean that if the manufacture's hadn't volunteered something worse was about to happen.

"This is a responsible action by the industry," Whitman continued. "Today's action will ensure that future exposures to arsenic are minimized in residential settings. The companies deserve credit for coming forward in a voluntary way to undergo a conversion and retooling of their plants as quickly as possible. The transition to new alternatives will provide consumers with greater choice for their building needs." Do you have any vague idea how much of this stuff is out there already? Just think how much you have seen in your lifetime.

So, what about my deck or my children's play equipment?

Here is what the EPA has to say:

EPA has not concluded that CCA-treated wood poses unreasonable risks to the public for existing CCA-treated wood being used around or near their homes or from wood that remains available in stores. EPA does not believe there is any reason to remove or replace CCA-treated structures, including decks or playground equipment. EPA is not recommending that existing structures or surrounding soils be removed or replaced. Sound a little strange to you? If it isn't any big deal, why did they discontinue its use? Do you think this statement may have something to do with the cost of replacing what is already out there, or the potential lawsuits that might come out of recommendations to remove it?

What should I do about my existing deck or play equipment?

From the EPA:

While available data are very limited, some studies suggest that applying certain penetrating coatings (e.g., oil-based semi-transparent stains) on a regular basis (one re-application per year or every other year depending upon wear and weathering) may reduce the migration of wood preservative chemicals from CCA-treated wood.

How is that for a carefully worded statement?

The EPA goes on to explain what the issue is all about on how you should deal with it:

Arsenic is a known human carcinogen and, thus, the Agency believes that any reduction in the levels of potential exposure to arsenic is desirable. As always, when children play outside, whether around CCA-treated play structures or not, they should wash their hands prior to eating. Also, food should not be placed directly on any outside surface, including treated wood. CCA-treated wood should never be burned, as toxic chemicals may be released as part of the smoke and ashes. Consumers who work with CCA-treated wood are encouraged to use common sense in order to reduce any potential exposure to chemicals in the wood. Specific actions include sawing, sanding and machining CCA-treated wood outdoors, and wearing a dust mask, goggles and gloves when performing this type of activity. Clean up all sawdust, scraps and other construction debris thoroughly and dispose of it in the trash (i.e., municipal solid waste). Do not compost or mulch sawdust or remnants from CCA-treated wood. Those working with the wood should wash all exposed areas of their bodies thoroughly with soap and water before eating, drinking or using tobacco products. Work clothes should be washed separately from other household clothing before wearing them again

What is the EPA doing about this issue?

During the past several months (January 2003), CCA-treated wood has been the subject of an EPA evaluation under provisions of the Federal Insecticide, Fungicide, and Rodenticide Act, which direct EPA to periodically reevaluate older pesticides to ensure that they meet current safety standards. The Agency is continuing to proceed with a risk assessment. EPA is also continuing to evaluate public comments and input from an external scientific review panel on methodologies to perform a risk assessment for residential settings and potential exposure to children from CCA.


Hum - - Thinking about licking my deck.
You have the general idea of the issue and this has become a bit long but, if you are interested in more and how this may relate to your children or grandchildren here are questions and answers provided by the "U.S. Consumer Product Safety Commission" in February of 2002 (these have been edited for brevity and to remove duplicated statements):

What is chromated copper arsenate (CCA)?

Chromated copper arsenate, or CCA, is a chemical compound mixture containing inorganic arsenic, copper and chromium that has been used for wood preservative uses since the 1940s. CCA is injected into wood by a process that uses high pressure to saturate wood products with the chemicals. CCA is intended to protect wood from dry rot, fungi, molds, termites and other pests that can threaten the integrity of wood products.

Chromated copper arsenate or CCA, is a chemical preservative that is used to protect wood from being destroyed by microbes, termites or other wood-boring insects. CCA contains forms of the chemicals chromium, copper, and arsenic. CCA is largely used to pressure treat lumber intended for outdoor uses such as home, schooland community playgrounds; decks; and landscape timbers. CCA-treated lumber is also used in building structures.

What work is CPSC doing related to CCA-treated wood?

In May 2001, CPSC was petitioned by the Environmental Working Group and the Healthy Building Network to ban the use of CCA-treated wood for playground equipment. In response to this petition, and to define the risk to children, the CPSC staff is evaluating the amount of CCA (in particular, arsenic) that a child might be exposed to while playing on CCA-treated playground equipment.

Do public wood playground structures contain CCA?

School and public playgrounds can be made with a variety of materials, including CCA-treated wood. Many older playground structures have been constructed using CCA-treated wood. In the past year (2003) some playground manufacturers have begun moving away from the use of CCA-treated wood for playground equipment and are using either untreated wood or wood that has been treated with chemicals that do not contain arsenic.

What does CPSC staff know about the amount of CCA that children are exposed to when playing on CCA-treated wood playground equipment?

CPSC staff is currently evaluating the amount of CCA released from both newly purchased, unused CCA-treated wood that might be used for building playground structures and from "used" or "older" wood. CPSC staff is particularly interested in knowing the amount of arsenic that children can be exposed to when they play on CCA-treated wood playground equipment. CPSC staff studies are being conducted by wiping the surface of the wood to measure the amount of arsenic on the wood's surface. The wipe samples are used to estimate the amount of arsenic that might be accessible to children when they rub their hands on the wood surfaces while playing.

How are children exposed to arsenic from playground equipment?

Children can be exposed to arsenic from playground equipment primarily through hand-to-mouth contact when they touch the wood and then place their hands in their mouths. Minimal exposure to arsenic can occur through their skin.

What are the health effects of exposure to arsenic and is there a risk to my child playing on CCA-treated wood playground equipment?

In order to define the risk, the CPSC staff is currently evaluating the amount of CCA, and in particular, the amount of arsenic, that a child might be exposed to while playing on CCA-treated wood playground equipment.

According to the National Academy of Sciences, long-term exposure to arsenic increases the risk of lung, bladder and skin cancer over a lifetime. The risk to children playing on CCA-treated playground equipment depends on the amount of available arsenic on the wood surface, how children are exposed to the arsenic (orally or through skin contact) and the length of time children spend using the equipment. Studies suggest that children may be exposed to arsenic from playing on some CCA-treated wood playground equipment.
The amount of arsenic present in different samples of CCA-treated wood appears to vary and limited test data do not allow staff to define the mechanism by which the amount of available arsenic changes as the wood ages. It may depend in part on the environmental conditions to which the wood is exposed (for example the amounts of heat, sun and rain) as well as the chemical composition of the wood.

In addition to evaluating the amount of the chemical available on the wood surface, CPSC staff is considering product-specific human use characteristics in its assessment. CPSC staff is evaluating the reasonably foreseeable use of the product by considering the age of the child using the product, the type of exposure (hand-to-mouth), the frequency and period of exposure, accessibility, extent of exposure (area contacted), and use environment (exposure to heat and sunlight). The relationship between exposure and adverse health effects will then be considered.

Consumers may wish to take steps to reduce this exposure. These steps are described in the following question and answer.

What can I do to decrease my child's exposure to chemicals found in CCA-treated wood?

CPSC staff is aware that various trade and consumer groups, some state governments, and a Science Advisory Panel (SAP) recently convened by the U.S. Environmental Protection Agency's Office of Pesticides, have made suggestions concerning surface coating of CCA-treated wood to reduce potential exposure to chemicals found in this wood.

Based on the limited available data, these groups have suggested that applying certain penetrating coatings (for example, oil-based semi-transparent stains) on a regular basis (for example, once a year or every other year depending upon wear and weathering) may reduce the migration of chemicals in the wood preservative from CCA-treated wood. However, in selecting a finish, in some cases, "film-forming" or non-penetrating stains (latex semi-transparent, latex opaque, and oil-based opaque stains) on outdoor surfaces such as decks and fences are not recommended as subsequent peeling and flaking may ultimately have an impact on durability as well as exposure to the preservatives in the wood.

CPSC staff has not completed its assessment of the effectiveness of these mitigation measures. However, consumers desiring to reduce potential exposure to chemicals found in CCA-treated wood may wish to consider using them.

It is also important to have children wash their hands after playing on playground equipment.
CPSC staff is aware of alternatives to CCA-treated wood. These include both non-arsenic wood preservative chemicals such as ammoniacal copper quat (ACQ) as well as other wood (for example cedar and redwood) and non-wood materials (for example metal and plastic). Consumers may want to consider using these alternatives for new construction.

How can I tell if my playground equipment or deck contains arsenic?

Freshly treated wood, if not coated, has a greenish tint, which fades over time. Historically, CCA has been the principal chemical used to treat wood for decks and other outdoor uses around the home. Generally, if you know that your deck has not been constructed with redwood or cedar, then it is likely that the deck was probably constructed with CCA-treated wood. Alternatively, if you know who the building contractor or wood retailer was, you may want to call and ask.

In 1990 the CPSC looked at the release of arsenic from playing on wood playground equipment treated with CCA. What's different now?

Since that study was conducted, additional health effects data are available. At the time of the 1990 study, skin cancer was the only carcinogenic effect of arsenic ingestion that was considered. New data reviewed by the National Academy of Sciences (NAS) suggest that long-term exposure to arsenic increases the risk of lung and bladder cancer, as well as skin cancer, and that the health risks posed by exposure to arsenic may be more than previously believed.

Can you explain the recent action taken by the CCA chemical manufacturers concerning CCA-treated wood and how does it affect CPSC's work?

STOP Licking your DECK!
Pesticides must be registered with the U.S. Environmental Protection Agency (EPA) for certain uses before they can be sold or used in the U.S. CCA has been registered for many uses, including use in dimensional lumber (2 x 4s, etc.) sold to consumers.

In early February, 2002, the manufacturers of CCA asked EPA to remove from their registration many applications of CCA for residential use, including playground equipment, decks, and landscape timbers. According to EPA, manufacturers are phasing out the production of CCA over the next 22 months to allow enough time for wood treatment facilities to convert to alternative chemicals and to ensure the availability of enough wood preservative during the transition time. It thus appears that after December 31, 2003, CCA will no longer be available to treat wood used in residential settings.

The results of this action will likely impact the work that the Commission staff undertakes in the future, particularly in the area of mitigation.