NACHI Involvement in State Legislative Efforts

[James H. Bushart]

No real controversy, here. Just wondering what folks think...

[Michael R. Boyett]

Jim,
Being from a licensing state and having attended many of the regulating board meetings I can assure you that 3 of the 4 choices are the farthest thing from the state's mind. I leave out the "Something else" option. I truly believe the reason Texas is licensed is to eliminate the unqualified inspector only. Maybe I'm naive.

BTW - my daughter and her family are still enjoying their home in St. Charles.

[James H. Bushart]

Hello, Mike.

Depending upon the state and who is pushing the legislative efforts, IMO, the motivations (and bills) vary. If I am correct in my legislative history, it was the real estate industry that pushed your bill, correct?

I'm glad things are still going good in St. Charles. Any damage from the recent storms?

[Michael R. Boyett]

Originally Posted by jbushart

If I am correct in my legislative history, it was the real estate industry that pushed your bill, correct?

I'm not sure but that sounds right. It was long before my HI time, in about 1994 or so.

Originally Posted by jbushart

I'm glad things are still going good in St. Charles. Any damage from the recent storms?

Not really, some minor roof damage in the neighborhood but they were fine.

[James H. Bushart]

Oh, Mike...I forgot.

How is Uncle Joe?

[Dan Bowers, CMI]

In Missouri last year the MAR came out and told us in several meetings the primary reason to push licensure on HI's was to shift liability off them. In case of something going wrong, they felt if we were licensed and deemed qualified to do this by the state they were less likely to get sued.

In Kansas, the KAR wants HI's to have mandatory E&O, and not be able to limit our liability (the Trial Attorneys also feel those are vitally needed requirements).

HUM!!!!!!!!!!!!!!!!!

[Peter C. Russell]

It's being presented in NH as consumer protection

[Doug Edwards]

From my experience, State licensing is almost never the State's idea. It gets pushed from some other quarter by someone (factions) who stands to gain something, or think they will. The end results are more often than not, not in the best interest of the consumer or the Home Inspectors. That old axe about "consumer protection" is not really believable anymore when it comes to licensing for any profession. That is the kind of statement you hear in a campaign speech. It sounds real caring and gives one a warm, fuzzy feeling but is a bunch of baloney.

[James H. Bushart]

Originally Posted by dedwards

That is the kind of statement you hear in a campaign speech. It sounds real caring and gives one a warm, fuzzy feeling but is a bunch of baloney.

Are you really saying that Jerry Peck and his cronies are insincere?

Why, if this is true, licensing efforts in Florida are all about reducing competition and increasing fees.

[James H. Bushart]

I think that most will agree that home inspector licensing laws are NOT consumer driven. We know that they are pushed by either or both - home inspectors and real estate agents.

What is in it for either of these two groups to establish a "minimum standard", in your opinion?

Does it enhance the profession? Reduce the competition? Etc....

Will a real estate salesman gain or lose by controlling who can enter the field?

[Nick Gromicko]

Depends on what you are asking.

The intent of state licensing from the perspective of the jackass inspectors pushing for it is to set a standard that keeps others out.

As we know though, licensing only keeps about 2 or 3 mentally challenged individuals from entering the profession who wouldn't last long in the free market anyway, but it nearly triples the number of inspectors in states that enact it.

Want to triple the number of competitors you have and give them all the same state issued credential ("licensed") that you have? Fight for licensing.

Like I always say... the NHIE is the greatest thing that happened to NACHI since Al Gore invented the internet. You can answer nearly 1/3 of the questions wrong and the state gives you a license. NACHI thrives in licensed states because we offer every benefit the state doesn't.

Licensing is however the worst thing to happen to individual NACHI members as it dumps so many inspectors into our markets, even more than ASHI does with their come-only-with-cash Candidate diploma mill.

[Nick Gromicko]

Nick's definition of a home inspector license:

A very minimum standard credential that doesn't make good inspectors any better, but props up bad inspectors so that they last longer than the free market would have allowed them to survive naturally.

[William J. Decker]

Here's my take on licensing, for what it is worth:

1. When states enact licensing, there are more people getting into the business. This is (usually, and in the case of Illinois) because of the below process that occurs:
   1. The state legislators, who are usually lawyers or political lackys and don't know or want to know anything beyond getting re-elected, rely on "experts" to "help" write the new law.
   2. Some association gets involved and, not being too original, thoughtful, or cognecent of conditions "on the ground" in the state and seeing their own SOP as the best thing since sliced bread, just re-package their own membership and advancement process into a form that will be voted upon by the legislators. (Thus, the Illinois State SOP is, pretty much, verbatum, the SOP of one such association.
   3. The legislators get to tell their constituants that the "did something" (but was it the right thing!) about the percieved problem.
   4. The laws are change an existing paradigm (between HIs and Realtors and RE lawyers and buyers) in ways that none of them foresaw or anticipated. Thus, I have to spend countless hours trying to educate some poor Realtor about what "fiduciary Responsibility" means and why the seller's agent is not entitled to a copy of the report and even explaining to RE lawyers that my report is to be considered a legal document and not modifiable by his paralegal, just to suit his own desires.
   5. In know of only two Realtors who have actually taken the time to read the State HI law and understand what it means. I have read the State Agent, Salesman and Broker law and do understand what they are required to do.
   6. After awhile, the HIs begin to see that it is a whole new ballgame. They start to play the game as professionals.
2. Licensing protects the Home Inspector, if they actually READ and UNDERSTAND the law and FOLLOW it. Holding a state license, especially in a state where electricians and general contractors and carpenters and HVAC contractors and minicipal building code inspectors don't, can be a defanite plus, but ONLY if the HI is smart and does his homework.
   1. The only two trades that are State licensed in Illinois are Plumbers and Roofers.
   2. In most AHJs, the only requirement to get a General Contractors licensed (local municipal license, there is not state GC license) is proof of GL insurance and bonding and a $35 - $50 annual fee.
   3. In most AHJs, the sub-contractors require no licensing because the work under the GCs license.
   4. Labor costs are key to profit. Therefore many workers are not professional, licensed, experienced or efficient. Most are picked up, that morning, from around the front of the local (Insert Large Home Improvment Store Name Here).
3. Licensing means that the state assumes, at least some, liability for your competance.
   1. GL, E&O and bonding policies are less expensive in license states.
   2. GL, E&O and bonding are (usually, and in this state) not required. The state, de jure, assumes at least some of the liability.
   3. Any HI who does not carry GL, E&O and bonding are, im my opinion, just plain nuts. Please don't complain to me when you are sued.
   4. Carrying insurance is a great marketing advantage. You are telling the client that you have already done something toprotect them!
   5. Limitation of Liability clauses in inspection agreements are, pretty much, worthless. Insurance companies may require them, bit they are usually not enforcable. More the illusion of protection than real.
4. Licensing usually requires state mandated CE.

Just some real life examples. The laws and reality in your various states (or contries) may vary. Check with your local lawyer for more details.

[William J. Decker]

Roy, some clarification, if you will alllow me.

I was just speaking about my experience, in my state and country (big differences!).

I was also referring to the (too many) newly licensed inspectors, in my state, who think that they know it all and that state laws are just "common sense" and something that they don't actually have to read and understand and "why should I pay some rich lawyer to explain to me what I already know".

I, and probably you, are independent, one man companies. I am sure that you take as much care with your company as I do. Therefore, we can limit our exposure.

We, each, also make our own decisions as to how to do that.

You are much more experienced that I, to say the least. Therefore, I KNOW that I can make a STUPID mistake and will act appropriately to cove myself with insurance (almost 2 years in the business and no complaints yet, knock on a Senators head! )

No insult intended. We all make our own decisions.

I was just trying to put in my 2 cents.

[Paul Sabados]

Originally Posted by jbushart

I think that most will agree that home inspector licensing laws are NOT consumer driven. We know that they are pushed by either or both - home inspectors and real estate agents.

You missed a few.

Add to it the trial attorney's that would love to have the itty bitty little limit of liability clause removed from the contract or turned over by the state. A Kansas past defeat. Sweetens the pot.

Don't forget about the schools. Mandated hours of pre qualifing education certainly does not hurt the bottom line. Even better get the state to regulate the CE portion and make a double dip. Money, money money.

The real estate agent, they would just love a universal one form fits all type of report. And don't forget what can actually be reported and how it should be written. Also, mandated E&O to take the responsibility of prior disclosure off of their backs. Oh by the way, dont forget to send in your money to be on the "Preferred List"

Yep, many inspectors believe that licensing will limit their competion. Possibly remove the Billy Bob's (taken from the KC mtg). Carefully study what happened to that theory. If written in such a way you could end up with another NJ. It worked for awhile but that ones turning too. Very costly to all, but some did profit handsomely. Didn't they?

Now the inspector that should make one of the control committee's can really personally benefit. Ahh to be on the control board, thats the ultimate goal for some.

Believe it or not, there will only be a few legislators pushing for a bill. Only if it can go through quick, easy and painless. Usually a few good election contributions will make the pain go away. He can pound his chest and say, "I did it for the good of my people" if it should fail he can say the same thing.
Whats totally amazing, areas of KS and MO have absolutely zero building or code requirements, unlicensed contractors running amock and anyone can be a home builder. Mr. Legislator how are you helping your constituents on this side of the coin?

Watch out for the warranty companies. SOP's and a contractor type inspection aren't the same. They believe that every home inspector should have been able to see that crack in the heat exchanger, or why didnt you put gauges on that compressor unit? They're in the game too, hiding behind the curtain.

Just my thoughts. When its your turn, make sure that you can logically defend your position, point by point. Let your position be known by getting involved. The "Oh well it was bound to happen" position is the worst. That helps all of the above.

Paul