State of Washington Regulates Inspectors, Plus an Update from New York State

Washington became the thirty-third state to regulate home inspectors when the governor signed a licensing bill last month. To find out more about the new law, visit the ASHI Legislative Action Center at  http://capwiz.com/ashi/issues/ and scroll down to WA.

The ASHI Legislative Committee will grade the new law and include it in the rankings of the ASHI Position Statement on Regulation of Home Inspectors when it revises the Position Statement at the end of the year.

… and the thirty-fourth on the way?

A bill to license inspectors in Georgia is on the governor’s desk for signature as we report. To get a handle on the particulars, take a look on the ASHI Legislation Action Center at http://capwiz.com/ashi/issues/ and scroll down to GA.

Just because your state is regulated doesn’t mean you can sleep at the wheel

New York State’s licensing law went into effect December 31, 2005. Currently, much is happening with the final shaping of the law.

If a law regulating home inspection passes in your state, you must monitor what happens to the law. Most legislation designates a state agency to draft regulations or rules implementing the new law. The law is not truly in force until the rule and/or regulations are in place.

Message from New York State

ASHI Lifetime Member Gregg Harwood is on the New York State Home Inspection Council (NYSHIC). His recent report to the New York State Association of Home Inspections follows. It illustrates the work that goes on after a bill becomes law, when the nuts and bolts of public protection are forged.

The New York State Home Inspector Professional Licensing Act went into effect on December 31, 2005. The Department of State (DOS) administers the law. A six-member Home Inspector Advisory Council represents the profession within the department.

As with any new adventures, especially ones that involve interaction with state government, there have been good aspects; as well as plenty of frustrations. In general, the frustrations stem from working with an established bureaucracy.

The first bureaucratic snafu was that the legislature and the governor were slow to appoint the six members of the advisory council. Therefore, since the Department of State was required to start issuing licenses in January 2006, they had to proceed without the guidance of the Advisory Council. Therefore, the basic rules and regulations were established without input from the profession.

Our DOS appears to see its job as issuing licenses, rather than protecting consumers, and is reluctant to interpret or enforce regulations that would be an obstacle to a person obtaining a license. Two quick examples will illustrate this point.

The most obvious example of this mindset is our licensing examination. Due to political realities during the drafting of the law, we were unable to require much initial training and experience. The required training is 100 hours of classroom time and 40 hours of field work. However, we were able to include an exam requirement that is defined in the law as testing for competency in home inspection. We hoped that this requirement of competency would be effective.

However, the department’s definition of competency has no relationship to a person’s ability to recognize defects during a home inspection, then report them to his or her client. Rather, the department’s definition is an exam that one-third of the applicants fail. This definition sets the standard of the test by the quality of the people taking the test, not by the requirements of the profession. In essence, this is “grading on a curve” like in high school, when the students don’t really understand a difficult subject, but the teacher does not want to fail the whole class.

The second example has to do with continuing education. This was another aspect of the law that we hoped would raise the level of the profession over the long term. However, while continuing education is required for license renewal, we are not required to provide proof of attending continuing education courses during the license renewal process. Rather, renewals are issued without any verification that continuing education has been completed. We have already heard of inspectors who have not bothered with obtaining continuing education and plan on waiting to see if they get audited.

As can be seen by these two examples, a regulatory authority that has consumer protection as its goal could easily raise the level of the profession by the way it interrupts and administers the law. Small changes in how the department does things would make a big difference. However, we have what we have, so I will bring you up to date on what has transpired during the last year.

The year 2006 was notable as the inaugural year of the Home Inspector Advisory Council in the DOS. While one of the six seats on the council remains vacant, the profession now has an official voice. The council has much work ahead of it to fulfill its mandate of advising the department.

The majority of the council’s efforts this year went into development of the Standards of Practice and Code of Ethics for our profession. Our state will not adopt documents from outside sources, such as Standards and Ethics promulgated by national inspector professional societies.

The first-draft versions of the Standards of Practice and Code of Ethics were unacceptable to NYSAHI. Text in these early versions would have prohibited inspectors from discussing the cause of a defect, due to DOS fears that we would be practicing engineering. As an example, inspectors could state that the basement is wet, but could not say that the likely cause was inadequate gutters and grading and could not make a recommendation to correct these conditions.

NYSAHI strongly opposed these documents and motivated inspectors drove to the state capital to pack the next DOS meeting to beyond standing-room capacity. This strategy was effective. The draft versions were significantly revised and, as of now, are under review by the governor’s office. We will have another public comment period opportunity prior to the final adoption of the regulations.

The next issue on the Advisory Council’s agenda is to review the initial inspector training provisions, especially the 40-hour field training requirement. The original intent of this phase of the training was to have trainees attend approximately 13 to 15 real inspections on a one-on-one basis with a licensed inspector. However, due to the rush to establish the initial regulations, and the lack of input from the profession, this critical element in the initial training has been diluted. Some schools are sending out up to 15 trainees with a single inspector on as few as three inspections. It will be no small task to develop regulations agreeable to the DOS that maximize the benefit of the training and satisfy the schools’ logistical needs.

Our statewide organization, NYSAHI, remains active in monitoring and responding to home inspector regulations. Our president attends every DOS meeting, two of our directors have seats on the Advisory Council, and we have developed a good working relationship with DOS staff. We have a paid lobbyist who has proved to be invaluable. Our main way of communicating with our membership and other interested parties is through a free e-mail newsletter. We currently have 650 inspectors subscribing to this newsletter.

NYSAHI operates entirely on a volunteer basis, with hundreds of volunteer hours and an annual budget of $16,000.

Marketplace trends:

Licensing has increased the number of home inspectors in New York State. Prior to licensing, our best guess is that there were about 1,000 practicing inspectors in our state. There are now 1,800 licensed inspectors. It is impossible to determine how many of these new inspectors have established viable businesses or have failed or have not attempted to pursue the profession.

In talking to inspectors from across the state, volume this year appears to be off by at least 10 to 30 percent or more in most regions. With the double whammy of the influx of new inspectors and the downturn in the housing market, it is impossible to determine the effect of the new licensees on total volume. My gut feeling is that the market downturn has much more to do with our reduced volume than the new inspectors.

Our licenses are good for two years; therefore, we have just started our first license renewals. Some of the first licensees have not renewed. However, this number appears to be what would be expected from normal attrition due to retirement, relocation or health issues.