7 C.F.R. § 1924.9

Inspection of development work

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The following policies will govern the inspection of all development work.

(a) Responsibility for inspection. The County Supervisor or District Director, accompanied by the borrower when practicable, will make final inspection of all development work and periodic inspections as appropriate to protect the security interest of the government. In this respect, inspections other than final inspections, may be conducted by other qualified persons as authorized in paragraph (d) of this section, in 7 CFR part 3550, in RD Instruction 2024-A (available in any Agency office), and as authorized under other agreements executed by, or authorized by, the National Office.

The borrower will be responsible for making inspections necessary to protect the borrower's interest. Agency inspectionsare not to assure the borrower that the house is built in accordance with the plans and specifications. The inspections create or imply no duty or obligation to the particular borrower. Agency inspections are for the dual purpose of determining that the Agency has adequate security for its loan and is achieving the statutory goal of providing adequate housing. If difficult technical problems are encountered, the County Supervisor or District Director should request the assistance of the State Office or a qualified technician from SCS or the State University Cooperative Extension Service.

(b) Frequency of inspections. The County Supervisor or District Director will inspect development work as frequently as necessary to assure that construction and land development conforms to the drawings and specifications. The final inspection will be made at the earliest possible date after completion of the planned development. When several major items of development are involved, final inspection will be made upon completion of each item.

(1) For new buildings and additions to existing buildings, inspections will be made at the following stages of construction and at such other stages of construction as determined by the County Supervisor or District Director except as modified by paragraph (b)(3) of this section.

(i) Stage 1. Customarily, the initial inspection in construction cases is made just prior to or during the placement of concrete footings or monolithic footings and floor slabs. At this point, foundation excavations are complete, forms or trenches and steel are ready for concrete placement and the subsurface installation is roughed in. However, when it is not practicable to make the initial inspection prior to or during the placement of concrete, the County Supervisor or District Director will make the initial inspection as soon as possible after the placement of concrete and before any backfill is in place.

(ii) Stage 2. The Stage 2 inspection will be made when the building is enclosed, structural members are still exposed, roughing in for heating, plumbing, and electrical work is in place and visible, and wall insulation and vapor barriers are installed. Customarily, this is prior to installation of brick veneer or any interior finish which would include lath, wallboard and finish flooring.

(iii) Stage 3. The final inspection will be made when all on-site and off-site development has been completed and the structure is ready for occupancy or its intended use.

(2) For rehabilitation of existing buildings, inspections will be made in accordance with paragraphs (b)(1) (ii) and (iii) of this section, and at such other stages of construction to assure that construction is being performed in a professional manner and in accordance with Agency approved drawings and specifications.

(3) For new construction when the structure will be covered by an insured 10-year warranty plan as described in exhibit L of this subpart, only the final inspection is required, except in cases when partial payments are required when the provisions of § 1924.6(a)(12)(v) of this subpart will be followed.

(4) Arrangements should be made to have the borrower join the County Supervisor or the District Director in making periodic inspections as often as necessary to provide a mutual understanding with regard to the progress and performance of the work.

(5) The Borrower should make enough periodic visits to the site to be familiar with the progress and performance of the work, in order to protect the borrower's interest. If the borrower observes or otherwise becomes aware of any fault or defect in the work or nonconformance with the contract documents, the borrower should give prompt written notice thereof to the contractor with a copy to the County Supervisor or District Director responsible for servicing the type of loan or grant involved.

(6) The borrower should, when practicable, join the County Supervisor or District Director in making all final inspections.

(7) When irrigation equipment and materials are to be purchased and installed, a performance test under actual operating conditions by the person or firm making the installation should be required before final acceptance is made. The test should be conducted in the presence of the borrower, a qualified technician, and, when practicable, the County Supervisor or District Director. If the Agency official is not present at the performance test, he or she should request the technician to furnish a report as to whether or not the installation meets the requirements of the plans and specifications.

(8) For irrigation and drainage construction or any dwelling construction where part or all of the work will be buried or backfilled, interim inspections should be made at such stages of construction that compliance with plans and specifications can be determined.

(c) Recording inspections and correction of deficiencies. All periodic and final inspections made by the County Supervisor or District Director will be recorded on Form RD 1924-12 in accordance with the FMI. The County Supervisor or District Director will be responsible for following up on the correction of deficiencies reported on Form RD 1924-12. When an architect/engineer is providing services on a project, the District Director should notify the architect/engineer immediately of any fault or defect observed in the work or of any nonconformance with the contract document. If the borrower or the contractor refuses to correct the deficiencies, the District Director will report the facts to the State Director who will determine the action to be taken. No inspection will be recorded as a final inspection until all deficiencies or nonconforming conditions have been corrected.

(d) Acceptance by responsible public authority. When local (city) county, state, or other public authority) codes and ordinances require inspections, final acceptance by the local authority having jurisdiction will be required prior to final inspection or acceptance by the Agency.

(e) Acceptance by project architect. If architectural services pursuant to § 1924.13(a) of this subpart have been obtained, final acceptance by the project architect pursuant to § 1924.13(a)(5)(v) of this subpart will be required prior to acceptance by the Agency.

[52 FR 8002, Mar. 13, 1987, as amended at 60 FR 55122, Oct. 27, 1995; 61 FR 2899, Jan. 30, 1996; 67 FR 78327, Dec. 24, 2002]

Notes of Decisions

Cited in 9 cases (1 in the last 5 years), 1983–2022 · leading case: Muniz-Rivera v. United States

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Muniz-Rivera v. United States (2003) ca1 · cites it 2× “39,789 , 39,803 (1980) (codified at 7 C.F.R. § 1924.9 (2002)). The revised rules, which are still in force, alert borrowers that they are solely responsible for making the necessary inspections to ensure the quality of their homes.”

Viola Moody (84-5479), George D. Bawgus (84-5695) v. United States of America (1985) ca6 · cites it 4× “However, the district court found that reliance was an element of an action under that doctrine, and that 7 C.F.R. § 1924.9 (a), (b)(5) provides that inspections are for the FmHA’s benefit only and that the borrower is required to inspect to protect her interest.”

Muniz-Rivera v. United States (2002) prd “The amended regulations state that the individual borrower is responsible for making any inspections necessary to protect his interest; that the Government inspections are not intended to assure the borrower that the house is being built in accordance with any plans or…”

Gray v. Rankin (1989) mssd “” 7 C.F.R. § 1924.9 . Neither is there any allegation of any other express representation by the government, such as an oral statement by one of its agents.”

Kirk v. United States (1985) nhd “7 C.F.R. § 1924.9 (a), (b)(5). In at least two instances since 1980 where plaintiffs sought to hold FmHA liable for negligent inspection and supervision of site development, federal courts have found that these amended regulations render the Good Samaritan doctrine nugatory…”

Moody v. United States (1984) tned “7 C.F.R. 1924.9(a), (b)(5), as amended by 45 Fed.”

Cash v. United States (1983) gand “7 CFR 1924.9(a), (b)(5). The amended regulations in effect at the time the plaintiffs obtained financing through FmHA clearly and unequivocally indicate that it is the responsibility of the borrower to make those inspections necessary to protect his interest.”

Honore v. USDA Rural Development (2022) vid “] 5 The Court notes that 7 C.F.R. § 1924.9 was specifically amended in 1980 to negate any possible government liability.”

Luckinbill v. United States (1990) pamd · cites it 2× “7 C.F.R. §§ 1924.9 (b)(4) and (5) (1980) provide: (4) Arrangements should be made to have the borrower join the County Supervisor or the District Director in making periodic inspections as often as necessary to provide a mutual understanding with regard to the progress and…”

— 7 C.F.R. § 1924.9(a) — 2 cases

Moody v. United States (1984) tned “7 C.F.R. 1924.9(a), (b)(5), as amended by 45 Fed.”

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