Category Archives: Real Estate

A History of Automobile Dealership Site Control

Background

“Site control” was originally thought of, and often referred to, as “point protection. ”

Manufacturers and distributors (hereinafter referred to jointly as “manufacturer” or “factory”) refer to the individual sales locations of their dealer bodies as “points. ”

An “open point” is a location where the manufacturer would like to have a dealer sell its product, but where there is not dealership at the present time.

Open points can be (1) “new points” (areas where there has never been a dealer, or areas in which a dealership has been closed for over a year); or (2) they can be “existing points” (locations where a dealer has closed, or gone out of business within a year).

Prior to the 1970s, site control was essentially limited to situations where the factory owned the real estate, or its financing arm such as General Motors Acceptance Corporation (formed 1919), Chrysler Credit (formed 1964), or Ford Motor Credit (formed 1959) carried the mortgage on the facility.

The 1920s – 1960s

On Sept. 13, 1922, Alfred P. Sloan, Jr. , then vice president of General Motors, issued a memo stating the condition of the corporation’s real estate was in a “very deplorable state of affairs. ” and that “. . . the situation has been found to be anything but what it ought to be. ” By way of that memo, it was established that before any property was purchased on behalf of the corporation, the papers had to be submitted to the real estate section advisory staff for approval.

In 1928, General Motors’ executive committee established an independent real estate group, owned and controlled by General Motors. They called it Argonaut Realty Corporation*. The same year, Alfred P. Sloan, Jr. , by then president of General Motors, wrote in a procedure manual:

“It should be distinctly understood that it is not the purpose, in the formation of Argonaut Realty Corporation, to put GM into the real estate business. The fact that the corporation must own real estate and that it can be handled better in a separate organization – all things of the same kind in the same place – justifies the move. On the other hand, recognizing trends that may exist, it provides an effective agent to perform a service for the corporation’s dealers and distributors where it is the desirable and constructive thing to do. ” CoreNet Global, Michigan Memo, September 2007.

[*Now known as General Motors Worldwide Real Estate, Argonaut states that “its mission is to support the corporation and business units in achieving their objectives, reducing structural costs and building community partnerships through effective real estate and economic development strategies. Today, GM Worldwide Real Estate has 47 employees located in 7 states and 9 countries. Together with our strategic alliance partners, our portfolio manages 406 million square feet, consisting of 359.9 million owned and 46.5 million leased in 56 countries and 735 cities globally. ” (Ibid, Global Michigan Memo)]

Ford Realty was also established in the 1920s, but it took another four decades before Chrysler’s then president, Lynn Townsend, established Chrysler Realty as a subsidiary, in 1967, to manager Chrysler’s 250 company-owned dealerships.

At the time that Chrysler Realty was established imports were not much of a factor in automobile sales. In 1960, for example, American companies built 93 percent of all light vehicles sold in the United States and accounted for 48 percent of all sales in the world.

The philosophy of the factories was straightforward. They were of the opinion that if they were going to lease facilities, or finance the purchase of real estate, they should try and assure the property would only be used to sell their product. They did not want to finance a facility that would distribute competitors’ vehicles.

Through the 1960s and into the 1970s, other than those instances, factories really did not seek site control.

The 1970s – 1980s

By the mid 1970s and early 1980s, however, real estate prices began to soar and manufactures were concerned about losing “points” in urban market areas. It was then they began seeking site control for dealership facilities they did not own and did not finance.

In 1973 the first “oil-crisis” hit the U. S. and sales of imports such as Datsun (now Nissan), Toyota and Honda soared. It was then that dealers began bringing “import” franchises into their facilities on a large scale either by either dualing, or simply terminating their domestic franchises and substituting them with Japanese makes.

With the surge of imports, the crash of the stock market and the rise in real estate prices, the 1970s and 1980s saw many metropolitan dealers selling their facilities for what seem then to be astronomical sums. Properties the dealers purchased, or constructed for a few hundred thousand dollars in the 1940s, 50s and 60s were, by the late 1970s, selling for millions. As the prices escalated, so did the cost of replacing these facilities.

To add to the problems of the period, Lee Iacocca, then president of a struggling Chrysler Corporation, sold Chrysler Realty to an independent, non-automotive company, called ABKO. ABKO Properties was a joint venture between Wichita, Kansas real estate entrepreneur George Ablah and Wichita-based Koch Industries. It was formed specifically to purchase Chrysler Realty Corporation in 1979.

During those times, Chrysler dealers were having problems, the economy was in shambles and lenders did not want to loan against dealership property because site control artificially depressed the rent and lenders were afraid that if the Chrysler dealer went out of business there would not be enough cash flow to cover the second mortgage.

It appeared that new ABKO / Chrysler Realty, as a non-automotive, independent company did not care about the dealers and sometimes preferred dealers to default so that it could repossess the properties and make a profit on its purchase of the division from Chrysler Motors. ABKO made millions by liquidating non-performing Chrysler dealership properties via tax-free exchanges and sales. (ABKO paid less than $100 million for about 850 properties, although some were just controlled by leases and not owned by Realty. )

The situation in the 1980s was an anomaly and, since Chrysler repurchased Realty from ABKO, all of the factory realty companies have been owned by the manufacturers whose goal is to support their dealers. [Note: In the short time ABKO owned Chrysler Realty, it liquidated over half of the properties before Chrysler repurchased it. ]

As a result of the facility sales, terminations and duals, factories were finding it difficult to obtain dealers to invest in certain metro-markets. Part of the lack of investors could also be contributed to the fact that that at that time in history, the rules for dealers were entirely different, as there were no “mega-dealers. ” Up until the latter part of the 1980s, for example, General Motors forbade a dealer from owning more than three dealerships, and then the dealer could only have a one hundred percent ownership in but one of them. The other stores required dealer-operators that had ownership interests and lived in the city or town where the dealerships were located.

The 1990s

Factory site control expanded exponentially through the 1990s. By the 1990s, every manufacturer’s sales and service agreement contained a right of first refusal and, by the turn of the century, no one thought anything about it.

The 2000s

By the 2000s, the site control generally became a condition of becoming a new car dealer. In 2010, for example, one cannot become a new Chrysler Dodge Jeep dealer without giving the factory site control.

Below is an example of the wording in Mercedes-Benz USA’s Sales and Service Agreement:

IX. TRANSFERS

B. RIGHT OF FIRST REFUSAL OR OPTION TO PURCHASE

1. Rights Granted

If a proposal to sell Dealer’s principal assets or transfer the majorit
y ownership interest in Dealer is submitted by Dealer to MBUSA, or in the event of the death of the majority Owner of Dealer, MBUSA has a right of first refusal or option to purchase such assets or ownership interest, including any leasehold interest or realty. [Emphasis added. ]

. . .

4. Option to Purchase

In the event of the death of the majority Owner or if Dealer submits a proposal which MBUSA determines is not bona fide or in good faith, MBUSA has the option to purchase the principal assets of Dealer utilized in Dealership Operations, including real estate and leasehold interest, and to cancel this Agreement and the rights granted Dealer hereunder. The purchase price of the dealership assets will be determined by good faith negotiations between the parties. [Emphasis added. ]

A number of factories provide for reimbursement to the perspective purchaser was exercised out of the transaction.

The following examples are from the Mercedes and Ford Sales and Service Agreements:

Mercedes-Benz USA:

IX. B. 3. Right of First Refusal.

If, as a result of MBUSA’s exercise of its right of first refusal, Dealer is contractually obligated to reimburse the initial buyer for reasonable attorney’s fees, broker’s fees, title searches, property inspections, and other similar costs and fees that the buyer incurred in connection with the buy/sell agreement, MBUSA shall reimburse Dealer for such costs and fees in an amount up to but not exceeding Fifty Thousand Dollars ($50,000.00). Dealer shall provide MBUSA with all documents substantiating such costs and fees as MBUSA may reasonably request.

Ford Motor Company

24. (b) Company Right of Fust Refusal to Purchase.

(6) The Company agrees to pay the reasonable expenses, including attorney’s fees which do not exceed the usual, customary, and reasonable fees charged for similar work done for other clients, incurred by the proposed new owners and transferee prior to the Company’s exercise of its Right of First Refusal in negotiating and implementing the contract for the proposed sale or transfer of the Dealer or Dealer’s assets.

Manufacturers want a reasonable rent factor that will support a car dealership and, as long as the rent will not destroy the business, manufacturers can agree to subordinate their recorded protection to allow dealers to refinance their properties or consent to higher rent factors in order to facilitate refinancing. They key to the factory is the continued success of the dealership.

UNDERSTANDING SITE CONTROL

SITE CONTROL IS BOTH AN ASSET AND A LIABILITY

While there are several down-sides to site control, there are also several advantages. The reader must keep in mind that we are not dealing here with a traditional landlord-tenant relationship, or a traditional right of first refusal, or a traditional option to purchase. What is involved in site control is essentially a form of commercial venture – a franchise – for the marketing of the manufacturer’s products. Both parties have a common interest in the success of the dealership and both profit from the activities of the other.

The factory is not interested in being a landlord and, if one reads the sandwich-leases, does not intend or attempt to make a profit from the rental. Within industry standards, and sometimes in the case of very successful dealerships, in excess of industry standards, the factory will allow the dealer to charge whatever he or she wants and will pass the rents through to the dealer or the dealer’s real estate company.

On the other side of the coin, the dealer’s interest transcends that of a tenant. His investment is the business and the facility is but a tool. The dealer’s investment and very livelihood depend on his operating a successful franchise.

Among the advantages of site control are:

1. Leverage. Site Control allows a factory to sell a dealer prime real estate that the dealer might not otherwise be able to obtain. If the dealer were not operating the manufacturer’s franchise, the manufacturer would not sell the property to him. The property is a means to an end, not the end in itself.

2. Retirement Package. There is also a substantial up-side in that if the dealer runs a successful business for 25-years, there is a strong likelihood that the dealer will end-up with a very valuable piece of real estate, in a strategic location that he could make the cornerstone of his retirement.

3. Mortgage Security. In a number of instances site control has provided lenders with the security they need to make a real estate loan to a borrower that might not otherwise qualify.

In a number of instances we had new dealers enter into sandwich-leases with the factory, or the factory’s real estate division, and then took those leases to lenders and obtained loans to purchase the real estate when the dealer could not qualify for the loan on his own.

See, for example, Beaudry Motor Company v ABKO; Chrysler Corporation and Chrysler Realty Corporation, 780 F.2d 751, 4 Fed. R. Serv.3d 142 (1986) where lenders refused to finance the property without a sandwich lease. The Court recites in part:

“lenders refused to finance the full amount needed without the additional security of a “lease/sublease” agreement between BMC and CRC. Such an agreement was reached and BMC borrowed the necessary funds. Thereafter, CRC deeded the property to BMC, with BMC executing a twenty-five year note and a deed of trust to the lending bank. CRC and BMC also entered into a leasing arrangement whereby BMC leased the property to CRC and CRC in turn subleased the premises to BMC. The lease and sublease were for twenty-five years with five options of five years each. Rent obligations for the lease and sublease were identical. BMC assigned its right to rent payments to the bank in order that CRC would become obligated to make rent payments to the bank in the event that BMC became insolvent. ”

See too: statements such as those made by James Carlyle of General Motors would support the desire of lenders for site control. In speaking about how General Motors retains control of a site,

“Mr. Carlyle said GM’s investment in a site for a dealership is not taken lightly. They retain site control for 25 years. If this applicant cannot maintain his business, GM will find someone who can keep it going. He said GM is committed to the site and is providing assistance in several ways to this business including financial. ” City of Danbury (Connecticut) Zoning Commission, Minutes of July 27, 2009.

3. Discounted Purchase Prices. In a number of other instances, we were able to buy real estate from the factory or the factory’s real estate division for values substantially below market price simply because they wanted our dealers to be representing their brands.

4. Illusionary Liability. In the 21st Century, site control does not usually inhibit a dealer from selling his or her facility.

If a dealer operates a successful business and wants to sell it, we have never seen an instance where the factory did not approve a sale to a qualified third-party dealer candidate that wanted to be the seller’s replacement dealer.

Furthermore, of the facilities we have seen sold with the business, all sold for fair market value because when a candidate thinks it through, if the factory just gave him the “point, ” he would have to pay fair market value to buy the land and to construct the facility.

We have talked to numerous lenders and have seen hundreds of appraisals and have never witnessed the fair market value of a dealership facility discounted because of site control.

GENRE OF SITE CONTROL

As dealers grew and laws protecting them changed, so did the forms of site control used by the factories.

Originally, when a manufacturer owned the real estate it would place clauses in its lease that required the dealer to use the facility to sell only the manufacturer’s products. Also, when the manufacturer’s captive finance compa
ny was the mortgagee, the finance company would require in its loan documents that only the manufacturer’s products be sold at the facility.

There are several methods employed by the manufacturers to acquire site control:

  • through the factory leasing the real estate from a third party and then and subleasing it to the dealer;
  • if the new dealer is the real property owner, the factory could lease from the dealer and sublease to the dealership, this method is called a “sandwich lease”;
  • by originally selling the real estate to the dealer and reserving the right to point protection in the deed;
  • by virtue of signing the Service and Sales Agreement.
  • Exclusive Use Agreements (Side Deals)
  • Restrictive Covenants in Leases
  • Restrictive Covenants in Loan Documentation
  • Re Purchase Option Agreements
  • Rights of First Refusal. The holder of a “right of first refusal” does not have the right to purchase the property before, or upon the expiration of the “right”, unless the owner decides to accept a bona fide offer, from a third party; and then the right exists (i) only to the extent of meeting the third party’s offer (ii) within the period of time allotted in the original lease. Once again, the prospective purchaser should review the lease and any “right of first refusal”, with an attorney admitted to practice in the state where the real property is located. Many times we have come across dealers who believed they had a right to purchase, when all they had was a right of first refusal. As with the lease itself, any right of first refusal should be recorded with the county, or parish recorder.
  • When assessing site control, both the factory and the dealer should keep in mind the purpose of site control. Site control exists because the factory is seeking to protect a distribution system for its products, not to establish a real estate portfolio.

    For a discussion of how to terminate site control, see: “Challenging Site Control on an Automobile Dealership Property

    For a discussion of site control in the 21st Century, see: “Site Control for Automobile Dealerships in the 21st Century

    Pond and Lake Leak Location and Repair

    Perhaps nothing is more frustrating that finally constructing the pond or lake of a lifetime only to find that it doesn’t hold water. Just as frustrating are repairs and repair theories that do not hold water.

    We will focus our leak location and repair strategies in 2 main areas – 1) SYNTHETIC LINED BASINS from small garden ponds to multiple acre ponds and lakes. 2) NATURALLY LINED BASINS – can be excavated ponds or lakes with no dam embankment or a pond or lake constructed with a dam.

    First things first – how do you locate the leak? This can be exceptionally simple or painfully difficult depending on the situation. Let’s state the obvious and move on from there – look for the wet spots around the pond. A soil probe will allow you to find moisture below the surface. If you do not have access to a soil probe, a ditch shovel will work just fine. Probe or Dig as deep as you can in the suspect area and examine the soil for moisture content. The best time to look for moist areas around the pond is after an extended dry period – preferably a week or more. If you find significant moisture, you are likely in the vicinity of the leak and can narrow your search. Pay attention to vegetation around the pond. Lush green vegetation during extended dry periods can help you narrow the search as well.

    Once you’ve narrowed the search or if you just can’t narrow the search, allow the pond water surface to fall without replenishing the water until the water level stabilizes. Mark this level and investigate the pond around this elevation. For a synthetic liner pond, you have found the elevation of the leak, careful inspection of the liner at this elevation should allow you to find the leak.

    If you have an EPDM rubber liner (Firestone Pondgard or similar) the repair is quite simple once you’ve found the leak. Purchase an inexpensive EPDM Repair Kit and apply per the instructions. If this is the only leak in your pond, you may refill and enjoy!

    If the pond is a natural bottom or unlined pond, the search becomes a little more complex. As with the lined pond, it is worth examining the pond at the elevation where the water level stabilized. There are 2 reasons that the water level may have stabilized at this level. One, this is the elevation of the leak or two, this is the natural groundwater elevation (water table). A simple pump test will determine with reasonable certainty whether or not the pond bottom has intercepted and is connected to the water table.

    To accomplish the pump test, select a pump that will allow you to draw down approximately 6 inches of water from the pond surface in less than 3 hours. Mark the starting water surface elevation and ending water surface elevation. Over the next 6-8 hours monitor the water surface carefully. If the water surface rebounds toward the starting point, the pond has most likely intercepted the water table. If the water surface stays at the same elevation, the initial water surface elevation is the elevation of the leak.

    Now that the leak has be located or at least the location has been narrowed down, it’s time to review the options for leak repair.

    First and foremost let’s dispell a common misconception. Sprinkling a modest, or even substantial amount of bentonite in any of it’s various commercial forms into standing water is VERY unlikely to stop or slow a leak. Bentonite is an expanding clay found in Wyoming which does have a role in repairing leaks and sealing water bodies. To be certain it is a great product when used properly.

    To properly apply bentonite to seal a pond, the pond must be drained and the bentonite then incorporated into the soil of the pond bottom and sides. The application rate for bentonite ranges from 2 pounds to more than 5 pounds per square foot depending on the soil characteristics. For clayey and silty soils, 2 pounds per square foot MAY be sufficient. For sandy soils 4 pounds MAY be sufficient and for soil containing gravel and rock, in excess of 5 pounds will be required to obtain a seal. Once the bentonite is applied, the soil should be disk harrowed to mix the soil and bentonite and then compacted.

    For a leaking embankment, if the location of the leak has been identified, it may be possible to construct a core trench in the embankment to slow the leak. To install a core trench, excavate a minimum 12 inch wide trench to 3 feet below the pond bottom elevation. The trench should be located as far back from the pond edge as possible while still remaining on the flat top of the embankment. The goal is to create an impervious core in the embankment which will not allow water to pass through. This impervious core can be created in a number of ways. Bentonite can be mixed with the excavated soil at a rate of 30% bentonite and 70% native soil. The material should be placed back in the trench and compacted with a trench roller, whacker, or excavator bucket in 6 inch lifts. Alternatively, EPDM liner can be buried in the embankment by draping a solid sheet of EPDM liner along the trench wall closest to the pond and carefully backfilling the trench. Again, the soil should be compacted as the trench is backfilled. Applying a bentonite mix at the bottom of the liner curtain and at the ends of the liner curtain will help to prevent water from seeping around the curtain.

    Another common location for leaks is along pipes which penetrate the pond embankment. All pipes that are installed through the pond embankment should be fitted with an antiseep collar to prevent water from flowing along the pipe. If a pipe is installed through the embankment without an antiseep collar, the pipe can be excavated and a bentonite plug installed around the pipe. Ideally, the bentonite plug should extend at least 3x the pipe diameter around the pipe.

    Jonathan Klotz is the owner of Natural Waterscapes, LLC a natural resource management firm located in Williamsport, PA. With a Master’s Degree in Hydrology and over 14 years of on the ground experience, he is one of the foremost experts in water feature management. For more information on leak repair visit http://www.naturalwaterscapes.com

    Commercial Property Condition Assessments Performed According to ASTM

    Property Condition Assessments (PCAs) performed according to American Society of Testing Materials ASTM E 2018-08, are commonly referred to as ‘Baseline PCAs’. In order to understand the meaning of a Baseline PCA, we can refer to the definition of ‘baseline’ provided in ASTM E 2018 that states:

    ‘the minimum level of observations, due diligence, inquiry/research, documentation review, and preparation of opinions of probable costs to remedy material physical deficiencies for conducting a PCA as described in this guide. ‘

    Given this definition, a Baseline PCA is essentially a cursory walk-through of a commercial property augmented by document reviews and interviews in an attempt to understand and determine the current physical condition of the property being surveyed.

    While some may argue that a Baseline PCA is better than nothing at all, the fact remains that baseline PCAs continue to rely heavily upon documentation review and interviews for retrieving information from sellers, real estate agents, and other people we usually don’t know. Unfortunately, this information may later prove to be insufficient or inaccurate simply because it is often difficult if not impossible to verify the authenticity thereof in conducting a walk-through survey of the property as provided by a Baseline PCA.

    The following depict some common conditions and repairs that can virtually go undetected and remain unknown in conducting a typical Baseline PCA according to ASTM E 2018:

    • Verify heat exchanger replacement inside a rooftop package unit
    • Verify replacement of compressor inside a rooftop package unit
    • Burnt control wiring inside a rooftop package unit
    • A cracked heat exchanger inside a rooftop package unit
    • A cracked or holed heat exchanger inside a gas fired unit heater mounted up high
    • Elevated or unsafe levels of carbon monoxide (CO) in flue gas
    • Electrical switch gear and panel code violations
    • Overheated bus bars, devices or electrical wiring inside power distribution equipment
    • Burned out electric heating elements when two or more are present

    By this time, you’re no doubt probably asking yourself, ‘What does all of this mean and how does this apply to me in purchasing a commercial real estate property’. Well, the answer is quite simple in that if you’re looking to mitigate your risk of purchase to the fullest extent possible, you’ll want to opt for a PCA performed at a much higher level of due diligence and inquiry than that typically provided by a Baseline PCA.

    My next article will continue this discussion by explaining what constitutes a PCA performed at a higher level of due diligence and inquiry than a typical Baseline PCA.

    To learn more about Commercial Property Condition Assessments (PCAs), visit the author’s website at: http://www.inspectabuilding.com

    Open House Invitations for Your Open House Party

    Open House Invitations for Your Open House Party

    If you’ve just moved into a new home or apartment, there’s a great way to show off the new residence to your friends and family members. You should consider an open house warming party. These events are some of the most popular today and have long been a great choice for graduation parties. Many of the benefits include being easy to plan and very casual. This makes them quite enjoyable for the guest and for the host alike. Of course, before you start sending out the open house party, you may have some questions about this type of event. You’ll find some answers below that will help guide your preparations of the invitations open house.

    How is an open house different from most parties?

    With most parties, the host actually plans out some events and activities for the guests to enjoy. Think about the last birthday party you attended. In most cases, the party’s host has a set time to bring out the birthday cake, to open presents, to start the festivities, etc. That means the host is usually always thinking about what needs to be done and how to coordinate all of the events in an effective way. With an open house, the party lasts for a set time but guests can arrive and leave any time throughout that period. With the housewarming open house party, you provide refreshments that guests can enjoy throughout that period, for example.

    What should I say in the invitations for the house open party?

    You won’t find these invitations to be much different than writing any others. Of course, you can definitely have fun with the wording. You’ll want to keep the invitations open house party simple – that sets the tone for the rest of the fun party. You’ll find an example below:

    We’ve finished the move and now we’re ready to party Join us for an Open House Party The festivities start on June 2nd from 5 pm to 9 pm 555 New Resident Avenue, Chicago Illinois 00003 We’ll have refreshments ready Feel free to bring your own choice of liquid refreshments

    Notice that these invitations don’t have any type of RSVP details because something that formal is also not needed. You want guests to be able to drop in as they want. Also, if you don’t want any children at the event, you may want to add an “adults only, please” message.

    Do you have any open house party ideas?

    One thing you should consider before mailing the open house party is the refreshments. You definitely want to keep the food menu simple because your guests need to be able to easily access the food. As the host, you also don’t want to serve anything that might make your job more time-consuming than necessary. Chips, popcorn, meat trays, relish trays, cupcakes, cookies, and even pizza are all excellent choices you might choose. Don’t forget to mention whether or not guests can drink alcohol on the premises in the open house party.

    About the Author: Sarah Porter has written several articles about Personalized Open House Invitations
    , Printed Party Invitations Open House
    , Custom Moving Announcements, Online Business Announcements, Photo Housewarming Party Invitations, Printable Address Change Announcements, Unique Open House Invitations
    , Cheap New House Announcements and more for http://www.cardsshoppe.com http://www.moving-announcements-cards.com http://www.announcements-shoppe.com and http://www.express-invitations.com

    Westchester Home Inspection Everything is Not Included?

    When you hire a home inspector in Westchester it is essential to understand what aspects of the home will be included in the inspection and what will need to be inspected separately by a specialist. While most professional inspectors will make you aware of the areas that will not be covered in the inspection, the client must take responsibility for knowing how far any given inspection will go toward protecting them from defects, both apparent and latent.

    A home inspection in Westchester includes but is not limited to, the heating or cooling system and appliances, the plumbing in all the “wet rooms” of a house such as the kitchen, bathroom and laundry room, the electrical and wiring system, the drainage system, and the masonry, framing and other structural components of the residence. Also, the exterior landscape and the soil the foundation is set in are often included in a home inspection.

    Although the plumbing is part of a routine home inspection, some homes have special considerations when it comes to septic systems and sewer connections. For these types of special concerns, a septic system professional may be called in to ensure the septic system is entirely sound. A home inspector is responsible for the piping inside the residence. As regards the outer fixtures, a specialist is required for a thorough and complete evaluation.

    For defects such as radon gas accumulation or mold testing, special tests and inspections are needed as these problems are not part of a routine home inspection. Since these particular problems can have severe consequences but may be relatively easy to conceal for the short-term, a prudent home buyer will want to protect him or herself against such problems.

    In addition, water quality testing is not part of a routine home inspection. Although a professional home inspector will ensure all the internal plumbing is sound and operational, the quality of the liquid coming out of the taps will require a special tester. Sometimes you can test the water quality of a home on your own, but, since you will need to send a sample away to a laboratory to get the results, it is often more expeditious to hire a water tester if the quality is a concern.

    Finally, mold, while observed by a home inspector and evaluated as to its significance regarding water intrusion, a home inspection is not concerned with the toxicity of such mold. To determine if a residence has a toxic mold problem, special tests must be carried out. Since it is difficult to ensure an adequate, appropriate and indicative sample is collected, it would be safer if the inspection was carried out by an experienced professional.

    Olympian Civil Home and Building Inspections (866) 476-2056

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    2008 All Rights Reserved

    Please visit my inspection mega-site for more information about my full service home inspection and environmental testing company. We service Brooklyn, Queens, New York, Manhattan, Staten Island, Nassau County, Yonkers and the Bronx. You may also wish to visit my learning library which is packed with great tips and advice for buyers, sellers and homeowners alike. Lastly, you can also take advantage of my VIP referrals for vendors in over 50 home related trades, where your satisfaction is assured and the inspection of vendors completed workmanship or products is conducted on your behalf for free; visit my site for more details or call toll free 866-476-2056.

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