Real-Life Lessons About Home Inspection Legislation

There is no rest for the weary.

How’s that for a motivating opening statement?

The topic of state licensing of home inspectors may be getting a bit old to those ASHI members who work in states with well-established regulations. Laws regulating home inspectors are the norm rather than the exception today. Despite how well-established these regulations appear, legislative activity related to home inspection shows no signs of abatement.

We are midway through the 2005-2006 biennium and already the number of bills that have been introduced affecting home inspectors and home inspection has exceeded the number introduced last legislative session. In 2003-2004, we tracked 93 bills. In 2005 alone, we have followed 95 bills in 32 different states.

State legislative activity is becoming more and more important to the ASHI membership. State regulation of the profession is of great interest to those inspectors who love what they are doing, want to continue to make a good living at it, and like being able to sleep at night knowing that the service they provide truly protects the consumer-the home-buying public.

With the frantic legislative activity across the country, what have we learned in the past year?  Six lessons stand out.

#1 – The Ten Commandments Lesson
Some of you will recognize this lesson from my earlier writings. State laws are not the Ten Commandments; they are not etched in stone. State laws can be changed at any time. Just because a law is on the books today does not mean that it is going to stay that way forever.

This lesson could have been called the “I Told You So Lesson” because ASHI members have been warned before. But I am not happy that this past year’s experience in New Jersey can now be cited as a real-life example. As Joe Corsetto explained so well in his recent Reporter article, New Jersey’s legislature amended the law regulating the profession and severely reduced the requirements for entry into practice, and training and experience. Most alarming, New Jersey regulators will be able to use an examination that has not been validated by unbiased testing professionals.

There is a sub-lesson embedded in the New Jersey experience. Within the legislative realm, there are groups whose goals are not the same as ASHI’s.

Real estate agents and brokers want to sell homes and to do it as quickly as possible. Their agenda is to have a large number of home inspectors available so that a sale is not delayed while the potential buyer waits for an inspection. And, as we have noted before, well-qualified inspectors are, of course, more likely to see flaws in a property, which may reduce the asking price, or slow down or even kill the sale.

In addition, there are national education providers and some franchise operators who want state standards low enough so their one-size-fits-all products can be sold in all 50 states.

The threat of existing home inspector licensing laws being altered is real. What happened in New Jersey can happen in any state.

Here are the facts. In the last year, we have seen 32 bills introduced in 14 states that would modify existing regulations. Seven of those bills already have been passed into law. These bills would change a wide variety of parameters including fees, which examinations are accepted, proof of insurance requirements, continuing education requirements, length of time for liability claims, real estate disclosure standards, and time limits for grandfathering. All of these changes would be of concern to the ASHI membership.

#2 – Grassroots Can Be Powerful
The real-life example of this lesson is in Florida, where a less-than-ideal bill passed the legislature, and the ASHI Chapters in Florida decided not to roll over (despite the advice of at least one industry lobbyist). Your colleagues mounted a full-court press on the governor’s office, and ASHI was successful in convincing Governor Bush to veto the bill.

#3 – Last-Ditch Efforts Don’t Always Work
Like the experience in Florida, the home inspectors in New Jersey urged their governor to veto the bill lowering the state’s regulatory standards, but the effort was not as successful.

If lobbying efforts have failed in the legislature, chapters are certainly encouraged to fight to the end. But, procrastination rarely will be rewarded in the legislative arena. Home inspectors should never adopt a strategy to simply hold off and ask for a gubernatorial veto at the end of the legislative process.

#4 – New Players on the Field
The Realtors® have been in the game from the beginning, but there are new players who are now on the field. Some of these are organizations claiming to represent home inspectors. These groups, however, have different goals from ASHI.

The New Jersey experience included some of these new players, and, in the last biennium, a bill was introduced in California to allow home inspectors to perform repairs on properties they have inspected. The bill was defeated last session, but it has been introduced a second time. The bill passed unanimously in the California Assembly and now sits in a Senate committee. Bills like this are a direct assault on ASHI’s Code of Ethics.

And be assured that the new players on the field are not here for a single season. Every ASHI chapter needs to be prepared to defeat legislative efforts to weaken highly rated laws that are based on ASHI’s Standards and Code of Ethics. And the experience in California should illustrate that defeating these proposals once will not be enough. The ASHI membership must be as persistent as those who wish to dilute the standards.

#5 – The Toto Lesson (As in, “we’re not in Kansas anymore.”)
Legislation being introduced today is not just about whether home inspectors should be regulated or not. The threats now include assaults on ethics such as the bill in California. Home inspectors also should be on the watch for legislation to allow the bundling of services. We are seeing this on both the national scene and in state legislatures. The move is to allow “one-stop shopping,” where the consumer will go to one umbrella company that will offer the entire gamut of service providers related to the sale of a home, including the real estate professional, the home inspector, the mortgage lender, the title insurer and who knows who else.

#6 – We’re Safe as Long as the Legislature is Not in Session
Conventional wisdom suggests this statement is true. Intuitively, there would seem to be less risk during a short state legislative session because fewer bad bills can pass than during a long session.

Conventional wisdom was proven wrong in North Dakota in 2005. The North Dakota Legislature meets for 80 days each odd-numbered year. A bill to regulate home inspectors was introduced in North Dakota on January 17, and it passed both houses of the legislature on April 6. The legislation passed in 79 days.

In North Dakota and other states with legislatures that meet infrequently and for short periods of time, the lobbying work is done between sessions. The lobbying is not done in the Capitol itself; it is done at the farm, office or storefront of the state legislators. Eighty days is not enough time for thoughtful deliberation. The home inspectors in North Dakota literally had no time to react to this bill’s introduction.

If you live in a state with a Legislature like North Dakota’s, you need to build relationships with legislators now in order to head off bad legislation that may be offered by some of those “new players on the field.”

What’s Next?
There are 20 states without home inspector licensing or trade practice acts on the books. Five of those states had bills before the legislature this year (Florida, Kansas, Michigan, Nebraska and New Hampshire).

If my math is correct, that leaves 15 states that do not have a law in place nor a bill before the legislature. If you are from one of those 15 states, you should not feel the least bit smug. I can guarantee that you will not continue to get off easy. What has happened in other states will present itself in your capitol eventually. Remember that a good offense is just as important as a good defense. You may want to prepare your model bill today because if you are not involved in the legislative process, it is more likely that things will be done to you, not for you.

Every ASHI chapter or group of chapters needs to retain a lobbyist. In another issue of the Reporter, I will offer advice on what to look for, or avoid, as you review your lobbyist options.

Our Job and Your Job
We at Coenen/Swandby Associates, Inc. track legislation in all 50 states and notify ASHI headquarters, the ASHI Legislative Committee and the appropriate chapter presidents when legislation has been introduced that may affect home inspectors. ASHI looks to each chapter to make a decision on whether to support or oppose each piece of legislation.

Through our legislative tracking service, ASHI provides information that no other home inspector organization offers to its membership. ASHI also provides unmatched support and counsel including the Legislative Guidebook, a model law, ratings of existing state laws, an alert network and other Web site services.

Take advantage of these resources and remember that laws can and do directly affect your business. Make sure that you play an active role in shaping those laws to both maintain high standards for the profession and protect the consumer.

New Legislation Introduced

by Bob Kociolek, ASHI director of chapter relations & state affairs

Recently, important legislation has been introduced in key states, proof that even if your state is already regulated, Janet Swandby’s urgings to maintain vigilance must be heeded. To follow the bills through committees/houses, with all attendant amendments/changes, refer to ASHI’s Legislative Action Center.

New Jersey S 2898 has been introduced to abolish the Home Inspection Advisory Committee and to transfer duties to State Board of Professional Engineers and Land Surveyors. S 2898 was introduced by Senator Sarlo on December 5, 2005 and referred to Senate Commerce Committee.

Ohio SB 0207 and HB 427 create a home inspector board and establish licensing requirements. The bills are similar, but not identical. For a detailed description of the similarities/differences, go to the Ohio page in the Legislative Action Center or contact me at bobk@ashi.org, and I will e-mail you a report.

The bills define the powers of the home inspector board for establishing a code of ethic and standards, creating educational standards, regulating licenses and collecting fees. The board will be comprised of five appointed members, who have all performed a certain number of home inspections.

Under these bills, becoming a licensed home inspector is a several step process: Register as an associate home inspector; be licensed as an associate home inspector; then apply to be a licensed home inspector.