Do the new state or local law(s) which mandate reporting of unsafe conditions observed outside the scope of work only apply to someone who is in fact working under contract at the site? Or will folks have to report things seen as part of giving an estimate? (Not that that would apply here, since the eventual unsafe condition did not exist at the time of the estimate.)
If I had to report unsafe conditions to "big brother" every time I saw them, very few would be allowed to have electric power on their premises. Even if something passes an inspection when it is new, don't think things don't eventually happen over time and something either gets damaged, altered or added sometime later. Is a contractor responsible for anything and everything that may go wrong at this place just because he entered the door either for prospective work, or for actually doing work?
Being blamed is not the same as having a judgement saying you were at fault. They can try to blame you, just because they can, they still have to convince a judge/jury you did something wrong before you owe any compensation of any kind.
I would have walked away from the job in the OP here also, but certainly would hope just because I seen what someone else did that I would not be liable for anything that may go wrong, and certainly hope that the AHJ never requires me to report such incidents, because once I was turned down on the original job IMO nothing about it is any of my business anymore.
That said if I had concerns about something, and depending on just how close I was to possibly doing the job before being told I was too expensive, (and this may not work in all jurisdictions) I may file a permit for the job - when the inspector finally asks me to see the job, or finds the horrible installation on his own because he has paperwork telling him there is work to inspect there, I can claim I filed the permit thinking I had the job, then owner backed out on me. This gets me off the hook with the inspector, maybe not real easy, but most of the inspectors I have been around much at all will know right away I did not do that work. Then inspector knows the work was done, and will next want to know who did it. If it was someone licensed, they are going to have some penalties to pay and if they have enough similar incidents maybe even will be considered for license revocation. If done by owner or unlicensed people, they kind of get a slap on the hands type of fine at the worst, but now that AHJ knows about the project, they will not just let it go, it must be corrected - by someone properly licensed (exemption for homeowners working on their "primary" residence), or some resolution that eliminates the entire installation could be made, or AHJ does have the authority to have service disconnected if deemed necessary. That last part usually does help owners decide to comply.
Some of the more extreme measures are not exercised very often, but are there as an option if needed, and owners are shown what the laws are and given a reasonable opportunity to comply with the laws.
Then there is the fact that most agricultural installations in this state are exempt from requiring permits, making it easier for owners of those installs to get away with something like described in this thread. But should something go wrong - the laws still say it is unlawful for someone to do electrical work for someone else if they are not licensed to do that work. That law itself has nothing to do with permits or codes and everything to do with who is qualified to do the work. So even if a permit is not required, you still CYA if you follow codes and standards, and are qualified to do such work.
