HUD And REO Property Preservation

EUGENIA

HI LINDA,

I'M LOCATED IN NORFOLK VIRGINIA...I WAS READING THRU SOME OLDER POST ABOUT GETTING STARTED WITH COMPANIES AND THE ADVICE WAS TO START WITH A FIELD ASSET / REHAB VENDOR IS THAT CORRECT? IF IT IS AND IM ON THE RIGHT PATH - HOW DO I FIND THESE COMPANIES IN MY AREA? DO I NEED TO CONTACT HOUSING AND REDEVELOPENT?

EUGENIA

REPLY TO C.M.J- (LINDA HALL):
I AM TOO STARTING A NEW PROPERTY PRESERVATION BUSINESS AND THIS SITE IS VERY HELPFUL.. GOOD LUCK WITH YOUR NEW BUSINESSS

Brickie

Eugenia,

If you are looking for work or looking to hire go here:

PropertyPreservationAndInspections@yahoogroups.com

__________________
“Ron Paul is one of the outstanding leaders fighting for a stronger national defense. As a former Air Force officer, he knows well the needs of our armed forces, and he always puts them first. We need to keep him fighting for our country.” – Ronald Reagan

EUGENIA

THANK YOU!!!

C.M.J.

Brickie - Could you explain the difference between P&P and REO work? Where would the errors & omitions ins. be needed? Thanks.

__________________
C.M.J. Residential Services llc.
Interior/Exterior Remodeling
Hardwood and Laminate flooring
Decks

FremontREO

BUY E&O for everthing in this business. Purchase the best policy money can buy since inevitably you will need it.
Make sure the E&O policy pays for "emotional distress" and any punitive damages other than just "cost of replacement of "missing" items" from a home.
In this business it is a given if you have been in it long enough you will be sued so make double dang sure to not buy the "cheap" policy since either you will let the insurance company pay or YOU will pay.

oteroproperties

Gotta agree with fremont on this one, I have a very good policy but i've recently been questioning my protection. I have set up a phone confrence to make sure I am covered for ALL work I perform. The E&O is more for the fact that there is no real release from liability for any work done on these properties. They can come back 3 years later and say "you didn't do this right" - pay up!! That's the real reason why the policy is so expensive in comparison to other gen liab policies. What you charge to be responsible indefinitley?

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Residential Electrician 95-04
Residential Construction Manager 04-06
Real Estate Investor 05-06
Property Preservation Contractor 05-current

BPWY

Since many of the start ups in this biz are here today and gone next year (if they're lucky) what are the banks and nationals doing about those that are no longer in biz and the insurance policies have lapsed??


A local real estate agent told me that in the last yr hes talked to 8 DIFFERENT contractors for FAS. Hes never seen the same ones twice. Pretty similar experience to mine with them. This is what I mean by here today, gone next yr or next month.

oteroproperties

To answer your question about the difference between P&P and REO is that P&P is presale which means you have to be VERY careful who works for and with you. You will be challenged by some type of law enforcement and it helps if your crew members don't have records. REO is after the bank already owns the home, no real liability here.....well not as much anyway. Things are done different, for instance, lock changes are done on the P&P side as well as the REO, but P&P can't really restrict access to the registered owner. With REO all locks must be changed to keep out previous tenants. Grass cuts have to be of better quality on REO then P&P. P&P cuts are to stop code violations and HOA complaints, REO is for both that and curb appeal (they are trying to sell the property so....). You will almost always trim shrubs on an REO job but P&P seldom approves bids for that (this depends on the client of course). The list goes on and on but there are a few examples. The bottom line is REO is after sale meaning the bank owns it and P&P is typically presale.

__________________
Residential Electrician 95-04
Residential Construction Manager 04-06
Real Estate Investor 05-06
Property Preservation Contractor 05-current

C.M.J.

Otero-Is there any way to write into a contract a limited length of time for liability? Such as after completion of certain aspects of the job liability is assumed by the owner (i.e. the bank)? Does this make any sense?

__________________
C.M.J. Residential Services llc.
Interior/Exterior Remodeling
Hardwood and Laminate flooring
Decks

oteroproperties

BPWY, as long as those contractors had insurance (and the client had the AI in possession and signed) at the time the job was completed the claim will be paid. That's the reason the policy is so expensive theres no real statue of limitations on these types of claims. Though im sure arguments can be made on our behalf for reasonable lengths of time passed.

__________________
Residential Electrician 95-04
Residential Construction Manager 04-06
Real Estate Investor 05-06
Property Preservation Contractor 05-current

mtmtnman

My insurance is written for "ongoing and completed" operations. I have been told this covers my arse WITHOUT E&O. Laws may be different in my state though.

BPWY

Insurance companies are all about risk. I would imagine that they will not make payments after a certain amount of time when the contractor cancels his coverage.

oteroproperties

I'm sure you could put it in any contract or report, but I doubt it will fly with the nationals. All of this work (maintenance, repairs, and preservation) is about the assumption of responsibility. It's the job of the asset manager to try and remove the liability of the asset from the client. I don't believe any large asset manager is going to work with a company that would put that in a contract. It would be nice though.....

this is just my opinion though not facts on this one..

__________________
Residential Electrician 95-04
Residential Construction Manager 04-06
Real Estate Investor 05-06
Property Preservation Contractor 05-current

BPWY

I have a feeling that there isn't a one of the nationals that will accept your contract.

C.M.J.

Thanks guys! This really helps out. I am probably being naive here, but it sounds like I would be more comfortable with REO work then P&P.

__________________
C.M.J. Residential Services llc.
Interior/Exterior Remodeling
Hardwood and Laminate flooring
Decks

FremontREO

Buy the E&O......
I recently learned a few of the tricks that are played out on the GL policy to not have to pay for "certan" items thus the E&O has to pay....

Ex: work order sent out to a contractor 4 days before the redemption period is over...GL won't pay but an E&O will. Contractor has no idea of the redemption period.
EX: GL won't pay for emotional distress
Ex: GL won't pay for cost of defense for the servicing company you work for. (Indemnity Clause) Even if you are in the right.
Ex: GL and most E&O policies won't pay for a countersuit to reclaim the cost of the contractors deductibles.

And on and on I could go but all valueable items that a contractor needs to know in this business...

oteroproperties

To be honest I don't really think we have any issues with this. After a job is completed and paid it is assumed by all involved that the job was completed correctly. I don't really see an angle that could bite us after that. Unless it's determined that we some how damaged something in the process. I guess arguments can be made from both sides all day long. The important thing is to be WELL covered just in case.

Just a side note:
a friend of mine that does this work was hit for a roof replacement for not reporting a small water stain in the bathroom. I couldn't believe that this happened to him and I started to worry about all the houses i've been in.

After some investigation I learned that he took a photo of the issue but didn't document it on the report. There was no plauseable deniability there.

Same thing happened to me years later and they tried to get me, but I video all my initial orders (especially the celings!!!!!) and that stopped the bulls__t right in its tracks. CYA that's all there really is in this business and GOOD insurance is a key part of that

__________________
Residential Electrician 95-04
Residential Construction Manager 04-06
Real Estate Investor 05-06
Property Preservation Contractor 05-current

FremontREO

There is nothing naive here. You learn by asking the questions
The answers may not always be right but an answer none-the-less
We always put in our contracts and completion documents a clause thay we cannot be held responsible for any items after an initial secure is completed since the bank cannot safeguard the property and who is entering the home...
p.s. Doesn't work but it makes us feel better kinda

mtmtnman

With all the BS lately video is sounding better and better. Do you upload vids to the nationals??