Legislative Update: Trends and Tools

by Janet Swandby December 1, 2004

A new year – and a new paradigm

As I reported at ASHI Chapter Leader-ship Day in October, I have been working with, and for, home inspectors for 11 years, and an analysis of the trends in legislation affecting home inspectors is very telling. The largest shift in thinking in the past decade has been from a question of “Should home inspectors be regulated?” to “How should home inspectors be regulated?”

This may not have been the shift that a good number of home inspectors wanted to see, but now the ASHI membership has to be ready to address the new
paradigm.  

What can you expect?  

Action.

We monitor all state legislatures and report to the ASHI Legislative Committee about any legislation affecting home inspection and home inspectors – any legislation offered in any of the 50 states. We’ve been providing this service to ASHI for many years.

What’s the trend?  

More.

In 1991, only Texas had a law regulating home inspection. North Carolina followed in 1993. In the past 11 years, we have gone from two states with laws regulating home inspectors to 29 states. Think about that – almost 60 percent of all of the states in the nation now have some law regulating home inspectors or home inspections. In the past year alone, two states have been added to the list of those with regulations:  Kentucky and New York.

With 29 states regulating home inspectors or home inspection, only 21 states remain where the question is still whether home inspectors should favor regulation or whether home inspectors should oppose all forms of regulation.

In 29 states, that decision has already been made. Regulation exists.

If your state already regulates home inspectors, don’t stop reading.
An even more telling statistic is that revisions to existing laws regulating home inspectors passed in eight different states in the past year. There is an important message in this last statistic. Just because your state has a law on the books regulating home inspectors does not mean that new legislation affecting your profession will not be introduced. State laws are not like the Ten Commandments; they are not etched in stone. Laws change. There is no guarantee that the law you have on the books today will stay that way. Some lawmaker may get the bright idea that the law regulating home inspectors needs to be modified, and that modification may not be in your best interest.

More – squared

The amount of legislative activity affecting your profession has increased exponentially. In the 2003-2004 legislative session, there was legislative activity in 33 different states.  That is a 43 percent increase in activity over the prior session. In the past biennium (2003-2004), we tracked 93 different pieces of legislation. Thirty-five of those bills were introduced to amend existing laws regulating home inspectors – 38 percent of all bills introduced. And 10 of those 35 were passed into law.

And in 2005, every state legislature (that’s right, all 50 states) will be in
session at least part of the year.

You now should see the trend. The question has changed. It is not whether home inspectors should be regulated. The new questions are “Does this form of regulation benefit us as home inspectors?  Does it meet the needs of the consumer?”

If the answer is yes, ASHI Membership must work to protect the law. This is where I see some slippage. Home inspectors have let down their guard in states where they already are regulated. Some inspectors assume that the battle has been won, but it is painfully obvious that changes can be proposed – and passed – at any time.

Some of the changes that can be suggested would be devastating to home inspectors. These could include proposals that would do the following:

• Increase a home inspector’s liability.
• Affect the time frame for action  against a home inspector.
• Increase insurance requirements.
• Require the use of state-mandated report forms.
• Increase annual fees.
• Impose the sales tax on home inspection services.
• Make changes in specialty inspection requirements, either freezing out home inspectors or forcing home inspectors to review and report on mold or lead, or something else.

Adjusting to Change

ASHI has done an admirable job of adjusting over the years. When I first began working with ASHI, the Members who championed regulation of the profession were a very small minority. The mood was to vehemently oppose all licensing, certification or whatever could be called government interference. ASHI chapters were successful in killing legislation and, quite frankly, the efforts were viewed as victories in holding off the forces of evil.

But the ASHI membership needs to recognize that when the momentum changes, we have to make adjustments. It is much like a football team. Just because the running game has been working in the first half, it doesn’t mean that the team strategy should be more of the same. To be successful, the team must be able to shift to a passing game if the defense makes adjustments.

The first tremendous adjustment that ASHI made was to develop a new strategy. The stated position was to oppose any proposed state regulation unless it was found to be necessary to protect the public. But the underlying strategy shifted to a tactic of making the most of a bad situation. If a state is going to regulate the profession, let’s make sure that it uses ASHI’s Standards of Practice and Code of Ethics. And to truly protect the consumer, states must have a valid examination. Use ours.

The second deft move ASHI made was to spin off the home inspector examination. Now, ASHI can champion an independent examination that meets national testing standards.

A couple years ago, ASHI made another adjustment that is particularly laudable. ASHI produced its Position Statement on the Regulation of Home Inspectors. As more and more states considered the regulation of home inspection, ASHI had to be able to better answer the questions of legislators, their staff and, particularly, the bill drafters. What should be included in a law regulating home inspectors? What makes a good law?  Which states have done a good job?

Without the ASHI Position Statement, bill drafters across the country will check what other states have on the books. They will go to any and all states with laws regulating home inspectors. Without ASHI’s guidance, these bill drafters will decide, on their own, which state to use as a model. And, no offense guys, but we don’t want them using South Carolina’s or Tennessee’s laws as examples of how best to regulate home inspectors.

The ASHI membership wants legitimate regulations. We want to see standards of practice, ethics, continuing education requirements, a valid examination, provisions to protect the home inspector from undue liability, and protections for the consumer from potential conflicts of interest.

To produce the ASHI Position Statement, the Legislative Committee and I took all of the good ideas from all of the current laws. The goal was to get any state considering regulation to draft a comprehensive law that is going to truly protect the consumer by holding home inspectors to high standards and keeping home inspectors independent. We also rated and ranked the existing laws so that bill drafters will not use bad laws as models for their own efforts.

The ASHI Position Statement is an excellent tool. Use it whenever you talk with a legislator about regulation. ASHI chapters that plan to encourage introduction of legislation now have an excellent template to share with potential bill sponsors. Chapters challenging legislation can share the Position Statement in an effort to improve a bad bill.

In April of 2004, ASHI modified its position statement to put new emphasis on ethics, stating that inclusion of a code of ethics for home inspectors is just as important as standard of practice.

I have beaten the ethics drum for many years because it is ASHI’s Code of Ethics that sets the Society apart.

The timing of this new emphasis on ethics is impeccable because a new threat has been introduced. There are those who want to erode what has been ASHI’s hallmark. In the past, some real estate agents have suggested “one-stop shopping,” but we are seeing another shift. Now, some home inspector franchise companies are interested in getting the “right to repair” in state laws regulating home inspectors. A bill was introduced in California this past session, and the group promises to be back and to expand their horizons to other states. These bills essentially ask the consumer to sacrifice protection for convenience, and the results would do great harm to the independent home inspector.

Get to Work

ASHI has provided you with strategic plans and excellent tools (like the Position Statement and the Guidebook), but each chapter and its members must do the work.
Unfortunately, things are getting more complicated, and the pace has quickened. It is no longer enough to know whether you favor regulation or not. Now, you will need to decide what you can do to make your state law better, or you will need to work to protect the good law that is already on your state’s books.

With this article, I have outlined the trends in the regulation of home inspectors and the tools that ASHI provides its members. Next month, a second article will focus on tips you can use either to champion regulation or fight regulation in your state.


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