Is an agent who coordinates repairs acting as a Contractor?

By
Home Inspector with Spec Rite Inspections - Lancaster Palmdale CA Inspector

Are Agents acting as a General Contractor when repairs are made?

As I'm around and about quite a bit.. I have seen a pattern of the agents "coordinating" repairs.. to the extent that I wonder if they are acting as a General Contractor.

The state that I'm in.. California, I'm nearly certain that they are. 

We have * a lot * of REO's that are being "fixed up"... Is the risk worth the reward?

Well then, what is the concern?

Well, quite frankly, depending on the area you live in... you could be violating the law or *even committing a crime*. Is is worth risking what you have worked for to gain the "approval" of the banks? Do agents really think that the banks will stand by you if you are stung? 

  • Does the person in charge know if the folks helping are licensed? What are the implications if they are not?
  • Do you know exactly what improvement require permits? What are the reprocussions if you don't obtain proper permits?
  • And worse yet... what if someone gets hurt? Are *you* responsible? If the "helper/trade/sub contractor isn't licensed and the money is passing thru YOUR HANDS.. YOU MAY BE RESPONSIBLE 

 

I have asked a couple of agents that I know.. simply because I was concerned that they may not know what they are doing if they realized that they are throwing themselves under the bus... the responses have been (and incorrectly so)

  • "I'm only the person paying them.. I have nothing else to do with it." <-- Wrong, if you are writing the checks... you're the BOSS!
  • "It's the only way I can get the listings from the Asset Managers, if I don't get *everything* done, I'm less likely to keep getting listings" I'd have to ask... "Is it worth it?"
Anyway, IMO, it's important to understand the risks and implications of our everyday undertakings.. I hope I shed some light on this. Along with being a Real Estate Inspector.. I have also been a licensed building contractor for over a decade, so I have a *bit* of insight to some of this.
 
Be well! 
Posted by

__________________________________________________________________________________

Tim Spargo, CMI

Certified Residential and Commercial Inspector

Spec Rite Inspections | Lancaster and Palmdale CA Home Inspections

 

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Topic:
ActiveRain Community
Groups:
Cash In On Foreclosures Investment Group
Los Angeles California Real Estate
REO REALTORS
Tags:
reo
renovations
asset manager
who is responsible for repairs

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Rainmaker
821,559
Marc Swartz
CPA, CA - Toronto, Durham & York Regions, Ontario

Tim - There are so many potential implications and pitfalls.  One needs to be very careful.

August 30, 2011 08:13 AM
Ambassador
1,656,692
Barbara-Jo Roberts Berberi
Palm Harbor Florida Residential Real Estate
Charles Rutenberg Realty

Often the client is out of state and many times out of country and they depend on our assistance.

August 30, 2011 08:31 AM
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1,070,690
Bryan Robertson
Innovator, Writer, Speaker
Catarra Real Estate, Inc

If you've been authorized to coordinate repairs and hire licensed professionals, then you're not acting as a general contractor.  That requires soliciting business or actually performing the work.  Could there be liability in coordinating?  Sure, but then there's so much liability in our business as it is.

August 30, 2011 09:00 AM
Rainmaker
770,483
Paula McDonald
RE/MAX The Woodlands, TX 936-203-0279
Chevaux Group, PLLC

So many things to consider these days.  We all do need to be very careful too in offering opinions on those things that one thinks needs repairing.  I had an agent once who walked around with the contractors "telling" them what they should be doing.  I believe she was really crossing the line big-time.

August 30, 2011 09:14 AM
Rainmaker
94,552
Jim Bushart
Missouri Licensed Public Adjuster
Licensed Public Insurance Adjuster

As an energy auditor, I can assure you that an uncoordinated effort in the implementation of improvements can destroy a home ... no matter how good the contractors are.

Each individual contractor is focused on his specific task.  The house, however, operates as one system with each part working together (or not) with the rest. 

Plumbers will destroy a floor joist to put the toilet in the exact spot you tell them to.  HVAC contractors have done considerable damage to roofing/attic supports as well as other important parts of the building to simply install and leave. 

The end result must rest with the person who coordinated ... properly or not ... the effort.  It should be left to the pros.

August 30, 2011 09:55 AM
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Tim Spargo

Certified Master Inspector, Inspected Rite
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Additional Information

I hope to create a few rambling posts, having hauled in a few (or ten or more) years of experience in the wild world of Real Estate Inspections.