Newly built houses have special home inspection issues.

By William Decker, CRI, CCI, CMI

Please note:  This article deals specifically with the laws, codes and home buying traditions in the Chicagoland area and some of the issues presented may not be relevant to your area.  The reader is requested to check with an InterNACHI certified inspector in their area for specific conditions that may apply.

So, you are buying a brand new house, just built and all shiny and new.  No one has lived there before and you will be the first owners.  Nothing can go wrong.  The listing agent says that the builder has a great reputation and the house was just “inspected” by the local code inspectors.  What can possibly go wrong?

Sadly, a great deal.

First, let me relate a few facts that are not known to the general public.  Please note that this applies to the Chicagoland area and may not be the same in your state.

• With new construction, especially in housing developments, you had better have your own buyer’s agent already signed up before you go looking.  If you go to an open house and express interest in the house, the listing agent will also wind up representing you.  And the listing agent is working for the builder / developer.  This is called “dual agency” and is a clear conflict of interest, although one that, none the less, exists.  If you want to be represented by your own agent, one that works specifically in your interest, you should sign one up before you do any house hunting.
• Due to various court cases and appellate court rulings, Illinois has an “Implied Warranty of Habitability” rule.  This means the builder of the house has a responsibility to ensure that the house will be “habitable” for a period of 10 years.  When you sign your contract or sale offer, you will note that there is some fine print that talks about an “Express Warranty” or some other warranty language.  Please read this carefully.  You will see that when you sign the document, you are also signing away this right.  This is the way that the Builder gets out of this 10 year implied warranty.
• When a house “passes” its municipal building code inspections, be aware that these inspections do not have a high standard.  Local building codes are only a bare minimum standard for health and safety.  These inspections do not check for quality of workmanship or that the various parts of the house were properly installed.  A code inspector, typically, spends only a few minutes at the job side for the inspection.  This is not meant to be critical of the municipal code inspectors.  In Chicago, a code inspector will have some 30 – 40 houses to check each day.  There is simply no way for them to go over everything with a fine tooth comb.
• Local building codes are bare minimum standards.  The analogy I like to use is that if a house “passes” a local code inspection, it is the same thing as you passing high school with a D grade point average.  And each municipality in Illinois can set its own building codes.  Simply crossing a street may mean a completely different standard.
• Many times, especially in the more rural suburbs, municipalities may give developers special “deals” with regards to code compliance.  This is because the local village or town would prefer that some old farm land be turned into a property tax generating development and gives the developer a break on the requirements.  The building codes are not cast in stone and are not the highest standard.
• In Illinois, there are some state law requirements that may or may not have been added to the local building codes.  An example is the recent Radon Protection act, that requires all new residential construction (houses), built since 2013, to have a passive Radon mitigation system installed.  I have seen many houses that fall into this category but did not have the system installed.  The builder wasn’t required because the local municipality had not made it known.

Builders and developers love to say “the city signed off on it” as an excuse, explaining that everything is OK.  This is of concern because:

• You and your inspector do not know what was and what wasn’t present or what the conditions were when the city inspectors were onsite.  So, there is no way to know what was and what was not signed off on.
• Municipal code inspectors inspect for compliance with the local code, and for that code only.  They do not inspect for quality, workmanship, proper installation or longevity.
• The new construction / permit inspectors typically hand 20 – 30 + stops to make on their schedule, each day.  You can see the problem with that all by yourself.  Doing the simple math makes clear how little time a typical code inspector probably spent onsite and what they did or did not see.
• The new “Certified Architect” program, offered in the City of Chicago, has the Architect making sure that the codes are complied with.  The city inspector signs off, but that is only based upon the word of the Architect.  It’s not about making sure that the actual work is done properly, but only about all the paperwork being completed.
• If the original permit, with at least 10 – 12 inspection sign-off signatures on the back, isn’t on posted, onsite, then whatever the developer / builder says is meaningless since he is not providing any actual proof.

I break down the types of problems I see in new home construction with the following categories:

1) Inherent Construction Defects:  Most of the time, home inspectors cannot see inherent defects because they are covered up with drywall or tile.  Sometimes however, if your home inspector is experienced (and sneaky) he can see that Mr. Plumber improperly cut a truss under the bathtub to run the shower drain (right).  Then there is the new cement sidewalk that slopes towards the house, rather than outward.  And, hey look, the guys who poured the driveway slab leveled it about 1 1/2″ above the foundation wall lip as opposed to 6″ below.  Consulting the approved plans for the house, which should be available for the home inspection, is very helpful added basement and attic bedrooms that were not in the original plans and are, therefore, a defect.

2) A List of Non-completed Items:  All new construction has a bunch of stuff that wasn’t completed.  Sometimes, these things are just simply overlooked, but other times the builder / developer is hoping that no one will notice and he can save some money by not finishing these items.  Buying a new construction house is like buying a new car.  Would you let a friend buy a new car if it had one of its windows missing?  Missing cabinet or kitchen base hardware, unfinished painting or wood finishing, missing trim pieces, lousy caulk work, etc.  Did some guy have a bad day and install the bedroom doorknob backwards (left)?  For the builder to complete 20 – 30 little odds and ends that “got missed” is a real pain.  He has to spend at least a day just following up with whatever guy he has do the work.  I counsel my clients to delay the closing until ALL these items have been completed and VERIFIED.  The client should be viewing his new house in exactly the same way they would for buying a new car directly off the showroom floor.  Would you buy a new car with the passenger side window missing, even if the dealer promised to install it next week?

3) Poor or Non-compliant Installation that Reduces Efficiency of Life Span:  This is, by far, the biggest category that home inspectors run into, for new construction homes as well as older houses.  It can also be called LOUSY WORKMANSHIP.  Bad installations dramatically affect the performance of the house andresult in added maintenance and repair costs, far sooner than they would normally occur.  These problems go, directly, to the buyer’s wallet when the Hardiboard siding isn’t installed properly, when flashings are missing or when furnaces are improperly installed.  The sad thing is that all of these type of defects could have been easily avoided if the workers had just read the manufacturer’s instructions (everything is easily available on the Internet).  The cement fiber siding was not installed properly, so maintenance / repair that would normally go for 10 years without any need requires a couple of thousand dollars worth of repair work after 2 to 3 years.  The new, expensive and very high-efficiency furnace did not have its combustion air intake vent installed, so instead of running at 90 – 94% efficiency is only averaging 75 – 80% and is eating up your heating money as well as sucking air out of your new house, causing the perfectly fine exterior brick to suck water into the house and cause mold growth.  How would you feel about buying a car that required a transmission replacement after only 20K miles because the assembly line worker forgot to tighten all the bolts?

I was called out last year to check on a problem at a 2 year old house.  The client, the original owner, stated on the phone that the furnace had never worked properly and shuts itself down every other day during the winter.  She had the builder out, and 2 other independent HVAC guys, but still has the problem.  I figured out what was wrong before I even rang her door bell.  The furnace exhaust vent was installed directly over the combustion air intake vent (left).  This allowed the moist furnace exhaust gases to be sucked into the intake vent and freeze, choking the furnace of combustion air.  Of course the furnace shut itself down, it had no air to breath.  This was an original construction defect.  It was not found before this because the homeowner did not feel she needed a home inspection because, as she told me, “It was a new house.  What could be wrong?”.

In a word, plenty.