**HOT** Texas Inspectors use of REI-7A-0

[escanlan]

I recently participated in the CMC Energy Home Tune-Up training class. While redoing my programs, forms, etc. I ran into a question on the TAC regulations. What I found out was very interesting and I would like to thank Devon Bijansky, TREC Legal, for clearing the air. She is always so helpful!!

I will sum it up here but also include her responses to my inquiries. In a nutshell, as she succinctly stated:

Devon Bijansky wrote:

As a licensed professional inspector, any sort of inspection or property condition consultation performed for a buyer or seller is considered an "inspection" if you are providing a written or oral opinion as to the condition of improvements to real property, regardless of what you call it. Therefore, any such service is subject to Chapter 1102 of the Texas Occupations Code and the TREC Rules.

In summary no matter what type of inspection or property condition consulting you are performing on a TREC controlled real estate transaction you must issue the TREC REI-7A-0 form. Here are the series of memo's that occurred. Please do not deluge TREC with clarifications as it is very clear here and they are busy there.

Also keep into account this was with regards to the Home Tune-Up report that CMC Energy generates as a .pdf file to give to my clients. We all know that .pdf files are significantly different format from other editing programs. In general to add this to another electronic report (in the absence of a .pdf editor) it would have to be embedded or attached to the report. My software package is not capable of doing this nor is MS Word as far as I am aware.

My first inquiry and TREC response:

From: Devon Bijansky [mailtoevonB@trec.state.tx.us]
Sent: Friday, November 09, 2007 1:48 PM
To: 'escanlan@psinspection.com'
Subject: RE: Lic# 7593 Question regarding required REI 7A-0 entries

Mr. Scanlan:

If this inspection is being performed for a buyer or seller, it would need to be reported on the TREC REI 7A-0. You could do this by entering window information in the window section, HVAC information in the HVAC section, etc., or by appending this report to the end of your usual inspection report. If you are only providing the energy efficiency information (and not performing a typical inspection), you would need to be very clear in the report (in the Additional Information section and/or in each section throughout the standard report) that by agreement with the client, you did not perform the inspection in accordance with the Standards of Practice.

Outside the context of a real estate transaction (immediate or anticipated), such as for a person who has recently closed on a purchase and would like to explore energy efficiency, you could use any report format you wish. In that case, TREC would not require your license number to appear on the report.

We hope this information is helpful to you.

Devon V. Bijansky

Staff Attorney
Enforcement Division
(512) 465-3960
fax (512) 465-3962
________________________________

From: escanlan [mailto:escanlan@psinspection.com]
Sent: Friday, November 09, 2007 10:30 AM
To: enforce@trec.state.tx.us
Cc: 'escanlan'
Subject: Lic# 7593 Question regarding required REI 7A-0 entries

I have recently completed the Kaplan/CMC Energy Home Tune-Up course here in the Dallas area. Attached is a sample report from the CMC report generation function. If this service is provided in conjunction with a TREC controlled real estate inspection may I issue this report separately from the Form REI 7A-0? If not then at what point on the Form REI 7A-0 must it be embedded? If this is allowed, are there any other required annotations that must be made on this report to satisfy TREC Regulations?

If this function is provided to a client as a stand alone service, i.e. I am not providing the TREC defined inspection, but the report is being performed for a potential buyer, seller, Real Estate professional or other party to the home sale, can this report be issued as it currently is? In this example am I bound at any point to provide the client the REI 7A-0 in any form with any entries?

If this function is provided as a stand alone service, under the condition described in paragraph 2 above, and the report can be issued to the client in its current form (see attachment) then must I still annotate the report with my TREC license number and business information?

Your assistance with this matter would be greatly appreciated.

Sincerely

Emmanuel J. Scanlan
PS Inspection & Property Services LLC
www.psinspection.com
TREC License # 7593

From here I had a series of memos between myself, Kaplan and CMC Energy regarding this which generated a number of memo's. I've left them out as they are not significant enough. There was one slight area of doubt and I generated the following memo to Devon Bijansky and her response is also here.

From: Devon Bijansky [DevonB@trec.state.tx.us]
Sent: Tuesday, November 13, 2007 7:17 AM
To: 'escanlan'
Subject: RE: Issue with Home Tune-Up and TREC regulations
Mr. Scanlan:

I apologize for my delay in responding. I was unexpectedly out of the office yesterday.

As a licensed professional inspector, any sort of inspection or property condition consultation performed for a buyer or seller is considered an "inspection" if you are providing a written or oral opinion as to the condition of improvements to real property, regardless of what you call it. Therefore, any such service is subject to Chapter 1102 of the Texas Occupations Code and the TREC Rules.

Inspections of one-to-four-family residential property (for a buyer or seller) must be reported on the TREC REI 7A-0 form, even if you do not intend to do a "typical" Standards of Practice inspection. (As you know, there is no required form for other types of properties.) However, that does not mean that you must always provide the full Standards of Practice-type service every time someone wants to hire you to provide energy efficiency inspection services. Section 535.227(c)(2)-(4) of the TREC Rules (the departure provision) clarifies that you may provide a more specific type of inspection by agreement with your client. By agreement with your client, you may depart from the Standards of Practice in full. However, there is no provision for "departing" from the standard form, so the REI 7A-0 must still be used even if you depart wholly from the Standards of Practice. It would be fine to note in the Additional Information section of the standard form that the energy audit is a part of that report but in a separate computer file.

Please feel free to forward this information to anyone else who may find it helpful.


Devon V. Bijansky
Staff Attorney
Enforcement Division
(512) 465-3960
fax (512) 465-3962


-----Original Message-----
From: escanlan [mailto:escanlan@psinspection.com]
Sent: Monday, November 12, 2007 6:31 PM
To: 'Devon Bijansky'
Cc: 'escanlan'
Subject: FW: Issue with Home Tune-Up and TREC regulations

Ms. Bijansky,

I emailed last week regarding the addition of a second report to my inspection services. Attached below is the response I have received from Kaplan schools regarding my inquiry to them, and CMC Energy the parent company of this project. As you can see the Kaplan response is to email two separate reports when the electronic report delivery method is used. Since the CMC Energy report is in .pdf format it is not possible to append it in many software packages, nor Microsoft Word based REI-7A-0 format.

Your response to me seemed quite clear but possibly I have misunderstood and would like to clarify with an additional question. As I understood your response the intent was that the CMC Energy, Home Tune-Up report was to be appended to the TREC REI-7A-0 report with the concept of preventing the reports from being separated in any way. In other words, wherever the CMC Energy report went the TREC REI-7A-0 report would also go. Would it be amenable to TREC, and the regulations, to annotate the REI-7A-0 "Additional Comments" section to indicate that the Home Tune-Up report is part of the REI-7A-0 report but in a separate file attachment in the email that also contains the REI-7A-0 electronic report?

One last question regarding the scenario where the Inspector does not perform the home inspection but does perform the Home Tune-Up audit. At one time the minimum required reporting was the I. Structural Systems, A. Foundations section, with a statement making the opinion of the foundation performance as mandatory. Other than the REI-7A-0 form, the TAC leaves the impression that now any and all sections of this report can be disclaimed if the client agrees to this. Is this a correct interpretation that any and all sections can be disclaimed now?

Sincerely

Emmanuel J. Scanlan
PS Inspection & Property Services LLC
www.psinspection.com
TREC License # 7593 & #8950

Hopefully this helps keep some of us out of trouble and within the regulations.

[Joe Farsetta]

Manny,

How about creating a text box in word, and copying the .pdf into it.

[escanlan]

Originally Posted by jfarsetta

Manny,

How about creating a text box in word, and copying the .pdf into it.

Joe,

Thanks! I've tried that and unless I am doing it incorrectly it does not seem to work for me. If I try to drag and drop from Windows Exploder (oops I meant Explorer ) or copy and paste from Explorer all it transfers is the first page of the report. Naturally if a try a cut and paste after opening the .pdf you lose the formatting.

Another issue that we face is the CMC report is already page numbered as is the TREC REI-7A-0 To prevent confusion to the client I really would prefer to remove the CMC page numbering if I dropped it inside the REI-7A-0 form.

If you are aware of a way to take a 20+ page .pdf file, complete with all the graphics, and easily add it to a Word Doc please let me know. It can come in very handy for other issues. Maybe I'm doing the Text Box incorrectly?
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[Kevin R. Weiss]

Seems like it may be easier to explain the benefits of this service to the client at the time of the TREC regulated inspection and then use it as a reason to followup later with them. Most people are upsizing and are surprised about the size of their energy bills once they get in a house. You could follow up at 6 months about doing a energy inspection.

Granted you have to go back out, but depending on the closing rate for the service, you get to keep intouch with the client and book a seperate billable service. As it would not be "related to a sale" at that point, you don't have to worry about the TREC regs and can just gie them the CMC report.

Thoughts?

[rdawes]

You can use a PDF print driver program like Win2PDF. Print the standard form to a pdf file and then print the CMC report to the same file name. It will offer the opportunity to append the second report to the first PDF leaving you with one file. At least that works for Win2PDF; I assume other PDF print drivers would offer the same option.

[escanlan]

Thanks for the help guys! What I was mainly relaying here though was the required use of REI-7A-0 when you provide a service that you do not want to use the REI-7A-0 form for such as the Home Tune-Up scenario.

I will just be sending them as two separate reports as an attachment to email. That makes it considerably easier in the long run.

Kevin,

That is a very good approach to the program! That kills two birds with one stone. Who knows they may even have a maintenance inspection done at the same time?

Ron,

A very nice feature for only $35. It could come in very handy for other needs I have. I use PDF995 now only because its free. Unfortunately it does not have the merge feature.

[Kevin R. Weiss]

It works for me.

The other reason is that most of the repairs or improvements related tot eh energy inspection would be considered upgrades. So they might just tend to muddy the waters of the negociations, as many buyers have trouble distinguishing upgrades from "in need of repair" items.

[Michael R. Boyett]

Manny, in addition to Ron's suggestion of Win2pdf you can also go to www.pdf995.com and download the free "pdfedit995" utility which allows you to merge two or more pdf documents into one.

[escanlan]

Originally Posted by kweiss

It works for me.

The other reason is that most of the repairs or improvements related tot eh energy inspection would be considered upgrades. So they might just tend to muddy the waters of the negociations, as many buyers have trouble distinguishing upgrades from "in need of repair" items.

Kevin,

Good point! Also how would you like to answer the question as to why your full inspection report does not make bad light of the HVAC when the Tune-Up report recommends it be replaced. Just thought of that one.

Mike,

I'm going to check out the pay per version of PDF995. But I'm such a cheapskate and hate paying for it!

[Michael R. Boyett]

Manny...read my post #8 again...free download! But $9.95 turns the ads that only you see off.

[escanlan]

Originally Posted by mboyett

Manny...read my post #8 again...free download! But $9.95 turns the ads that only you see off.

Mike,

Oooops! Missed it. Must be my 8 year old eyeglasses. Told you I was a cheapskate!!

[Dan Bowers, CMI]

I'm kinda confused by some of this youse guys are writing. Seems like it could get confusing.

A house is for sale. A buyer makes an offer and calls a HVAC company to check the furnace and A/C. DO they use your TREC REI-7A-0 form?

A house is for sale. A buyer makes an offer and calls an electrician to check the electrical systems. DO they use your TREC REI-7A-0 form?

A house is for sale. A buyer makes an offer and calls a foundation contractor to check the foundation. DO they use your TREC REI-7A-0 form?

Tells us up north how this works. Are these folks considered Inspectors and need to be licensed as such - Being a yankee, I would doubt that.

[escanlan]

Originally Posted by dbowers

I'm kinda confused by some of this youse guys are writing. Seems like it could get confusing.

Yes it can become very confusing. That is why we ask the TREC Legal Counsel for interpretations on a regular basis.

A house is for sale. A buyer makes an offer and calls a HVAC company to check the furnace and A/C. DO they use your TREC REI-7A-0 form?

No as they are operating under their license.

A house is for sale. A buyer makes an offer and calls an electrician to check the electrical systems. DO they use your TREC REI-7A-0 form?

No as they are operating under their license.

A house is for sale. A buyer makes an offer and calls a foundation contractor to check the foundation. DO they use your TREC REI-7A-0 form?

No as the contractor is there to provide an estimate for work. If there is no problem then no work needed. You do not generally find a foundation contractor running around performing foundation inspections as a service to buyers or sellers.

Tells us up north how this works. Are these folks considered Inspectors and need to be licensed as such - Being a yankee, I would doubt that.

Dan,

I know how you feel as I am just another Damn Yankee Transplant here myself! Us Yankees tend to upset the Southern apple cart (so to speak) with all of our clarification requests.

It is a rather simple concept in such a complex world that it does at times appear confusing. Simply put if you are performing a whole property condition consultion on a home for sale then you must be licensed as an Inspector. If you are a contractor providing estimates and advice regarding a properties condition, regardless of whether it is for sale or not then you do not need to be licensed as an Inspector.

Here is an interesting part. If you are performing a property condition assessment of even one system of a home for sale then you must either be a licensed tradesman for that system, a licensed Inspector, a licensed building code official or a Professional Engineer.

Are you confused yet? Good, come on down and join us!

[Michael R. Boyett]

Originally Posted by escanlan

I know how you feel as I am just another Damn Yankee Transplant here myself!

What??? and all this time I thought you were a born and bred Texan or at least an illegal immigrant or something. Hell, I've taken you into my confidence only to be repaid by this atrocious admission? I feel....violated.

[escanlan]

Originally Posted by mboyett

What??? and all this time I thought you were a born and bred Texan or at least an illegal immigrant or something. Hell, I've taken you into my confidence only to be repaid by this atrocious admission? I feel....violated.

Mike,

I do hope you can forgive me? I am trying to assimilate into the local culture. I even purposely built our home in a country town full of actual Texans!! It is getting hard to find an actual Texan in Texas these days! I have not quite gotten the drawl down pat yet though. But I do own a pickup truck, 50 guns and have four dogs. Can I score some points with that?