Monday, May 25, 2009

NEW - Home Inspector Legislation

Before reading this, please accept my apology for its length and be aware that this information is derived from three primary sources:

  1. The actual proposed Senate Bill 1007
  2. A report by Bruce Rudd, NCAR Liaison for the NC-American Society of Home Inspectors (NC-ASHI)
  3. A report by Fred Herndon, President of the NC Licensed Home Inspectors Association (NCLHIA)
The abbreviations used here equal:

NC-ASHI = North Carolina chapter of the American Society of Home Inspectors
NCLHIA = North Carolina Licensed Home Inspectors Association
NCAR = North Carolina Association of Realtors
HBA = Home Builders Association

This author is a current member of the first two, an associate member of the third and a former member of the last. Of course, if you have followed me for the last ten years you know that I am not very opinionated. Right!

Senate Bill 1007 is working its way through the General Assembly of North Carolina. There are many misunderstandings and much misinformation floating around, especially among Home Inspectors and Realtors about this Bill. This article will attempt to set forth what is actually happening. I will state my personal opinion related to this action by the Legislature and the action of those involved in this legislation.

Many organizations were involved in negotiations relative to this bill including NC-ASHI, NCLHIA, NCAR and the HBA. It should be noted that the HBA is probably the most politically powerful player in these negotiations. I know that may sound strange because NCAR is the largest and the most financially flush. However, from the perspective of the Legislature HBA is blue “collar” and NCAR is “white collar”. The Legislature is less likely to buck the position of HBA. The representative of HBA apparently, only attended one meeting only long enough to advise the participants that it would oppose the bill if the contractor’s license exemption was removed. Is the HBA powerful enough, on their own, to back up their threat to kill the bill? Yes, they have already killed a similar bill and have their forces in place to kill this one.

The proposed bill amends the laws under the North Carolina Home Inspector Licensure Act. I will review the sections of the bill being amended which will positively or negatively affect home buyers and Realtors.

143-151.51, Section 1.2 This change establishes a pre-licensing education system of no more than 200 hours and gives anyone currently enrolled in the Associate program until October 2013 to finish. This replaces the program that NCLHIA and NC-ASHI committed to supporting over a year ago. (CDH – I was involved in this as a committee member when the original serious discussion came out of the licensure board committee on Standardized Reports. I not only support this change without hesitation but, although I have hundreds of hours of home inspection education, ten years as an active inspector, I commit to participate in this education program and wouldn’t be opposed to all existing home inspectors being required to take the new 200 hour course.)

151-51.51 5 (a) someone in bill drafting goofed and, when they struck out the section that established the Associate program, they eliminated the requirement for a high school education as well. (CDH – This omission will probably be corrected before this bill achieves its final form.)

143-151.51 5 (b) this section, as written, requires all Inspectors with less than 5 years experience and 750 inspections as of October 1, 2011 to take an abbreviated version of the pre-licensing education program of no less than 50 hours before October 1, 2013. (CDH – In light of the fact that I have been an NC licensed home inspector for over 10 years, have completed well over 750 inspections I qualify for this exception. However, although I have completed hundreds of hours of training I intend to take the 200 hour course required for new inspectors so that there is no question of my qualifications. I strongly urge other home inspectors to do the same as proof of their competence. We should be willing to put our time and money where or claims are. I challenge all contractors, architects and engineers who have already, or in the future, become a home inspector through the open back door of this and previous legislation to follow my lead and prove your competence.)

151-51.51 (c) The exemption for architects, engineers and contractors remains in the law. The HBA lobbyist’s position is that without their exemption they will kill the bill and there will be no pre-licensing education program in North Carolina. However, after two months of intensive negotiation with the HBA and NCAR their is a compromise that requires anyone coming in under the contractor's license provision to wait at least 6 months before applying for a HI license, and requires them to maintain that contractor's license indefinitely or lose the HI license. (CDH – I was a licensed commercial contractor in North Carolina, now retired, and have constructed over 5,000,000 sf of buildings mostly in this state. I have also held license in Virginia and South Carolina and have worked in George, Tennessee and Maryland. Most competent contractors, engineers and architects (including me at the time I considered becoming a home inspector) will tell you that they are not qualified to act as a pre-purchase home inspector due to their lack of experience and training. Before I became a licensed home inspector I completed hundreds of hours in classes and educated myself with books on the subject before I inspected my first home. Since becoming a licensed home inspector I have completed hundreds of additional hours of training. Before my training, even considering my license, and many years of experience as a contractor, I was not qualified as a home inspector. This exemption should be eliminated and the members of Home Builders Association know that it should. Their ego will not allow them to acknowledge that most of their members are not qualified to be home inspectors without training. They should be ashamed of themselves for opposing the removal of this exemption and their lack of concern for the best interest of the buyers of their homes.)

143-51.51 Section 1.4 This requires all Inspectors to carry at least $250,000 worth of general liability insurance and either a net worth of at least $17,500, a bond in that amount, or E+O insurance of at least $250,000. (CDH- This should have been in the original legislation and I support this change) This section also gives anyone still licensed as an Associate on October 1 2011 two years to finish his Associate program. (CDH – I would not be this kind)

143-51.54 (b) this section requires anyone convicted of a felony or misdemeanor to report that fact to the Board within 60 days. A Home Inspector is already required to report this information on the yearly renewal form. (CDH – I support this change)

143-51.54, Section 3 This simply requires anyone reactivating an inactive license to make up his or her continuing education, up to a maximum of 24 hours. (CDH – I would not be this kind and require that ALL continuing education hours be made up)

143-51.58, Section 6 This section rewrites the summary requirements. The basic categories of "not functioning as intended, in need of further evaluation or subsequent observation are still included, but the only ones required to be in the summary are the "not functioning as intended" items. The others can be included at the Inspector's discretion as long as they have some kind of documented reason for putting them there. The old category of "adversely affecting the habitability of the dwelling" has been removed. In its place is a provision that specifically lets an Inspector include safety items in the summary at his discretion. (CDH – I have never understood the need for a Summary Page and don’t now. It was required at the behest of a few (I might add a very few) Realtors who did not desire to read the complete report. I am still appalled at the number of Realtors who do not read home inspection reports except for the Summary Page and the few who don’t even read the Summary page but only write their repair request based on what their buyers request. Why state anything twice. The biggest complaint that I receive from my buyer clients and the sellers, whose home I inspect for the buyer, is that the summary page is not only repetitive but unnecessary and confusing. The Summary Page requirement should be struck out of the legislative act for the best interest of the home buying public. Why should we legislate the act of ignoring the complete report in favor of only reading the summary page? Is that in the best interest of the public? I don’t think so, but who cares what I think?

143-51.58 Section 6 a(2) This simply says that if a home inspector specifically states in his report that something is a code violation, then he is responsible for knowing what codes were in effect when the house was built and conducting the inspection under those codes. (CDH – I would much prefer that the word “code” not be allowed in a home inspection report. However, if some inspector thinks he is competent enough in the content of every code written since the beginning of time and thinks he should “call a code” infraction. Let him, he is only hanging himself.)

My hat is off to Rick Zechini, Director of Governmental Affairs-NCAR and the NCAR at large for inviting the stake holders to the table to negotiate this bill in the best interest of the public rather than taking a chain saw and running rampant thorough the woods without a clear understanding of the root system of the trees they sought to cut down.

My thumbs are turned down to the HBA who, by their actions, as represented by Lisa Martin with their large stick in hand, clearly exhibit their lack of concern for the buyers who purchase their homes. Shame on you for refusing to support removing an exception your builder members, architects and engineers clearing understand shouldn’t be in this legislation.

If you want to read the bill as currently written, click on the this link.

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