NAR's Executive Summary on home inspection licensing.

[Nick Gromicko]

HOME INSPECTORS

ANNUAL REPORT EXECUTIVE SUMMARY

October 2008

Overview

Sixty-five percent, or 35 jurisdictions, of the 54 surveyed jurisdictions have enacted statutes or regulations governing home inspectors and/or home inspections, but:

* only 63 percent (34 states) had enforceable regulatory regimes;

* only 44 percent (24 states) set forth specific requirements for home inspections; and

* only 20 percent (11 states) addressed third-party liability or liability limitations related to home inspectors.

Of the jurisdictions with home inspection rules, most laws and regulations are of recent vintage. Only two states (North Carolina and Texas) had original home inspection rules dating from the early 1990s. The laws of 30 percent of the jurisdictions that regulate home inspectors were enacted in 2003 to 2008.

Licensure

Nineteen of the jurisdictions surveyed did not have home inspector regulatory laws.

Floria has passed a licensing statute, but delayed its effective date until July 2010. Washington's newly enacted law becomes effective January 2010, and Kansas' licensing law is not effective statewide until 2011, although in certain counties the effective date is July 2009. Rhode Island likewise has a licensing program, but its implementation remains unfunded. Pennsylvania has imposed practical standards on inspectors, but no license requirement, while Virginia enacted a voluntary certification program. Other states, such as Montana and Georgia, require only that a home inspector make certain disclosures and provide specified documentation to his or her client.

Of the remaining jurisdictions, the vast majority provided exceptions to the licensing rule, with common categories including government and code enforcement personnel and licensed real estate brokers, agents and apraisers.

Licensure Qualifications

Of the jurisdictions with licensure requirements, the majority rule, favored by over 95 percent of the licensing jurisdictions, requires a high school education, some practical or educational home inspection program, exam passage, and license fee payment. Insurance coverage, moral character, and minimum age were also required in some instances. Systems in Connecticut and Nevada were typical of this model. Some jurisdictions, such as Alabama and Indiana, barred applicants with certain criminal records.

Inspection Scope

Of the surveyed jurisdictions, 43 percent specify standards for home inspections. Of these states, half provided lists of features that should be inspected and reported; most states also listed exceptions, such as seasonal and temporary items on the property.

Liability

Eighty percent, or 43 jurisdictions, did not deal with limitations of liability or liability to third parties related to home inspection. Of the remaining eleven states, only Alaska, Kansas, Kentucky and Wisconsin had provisions under both categories, and only six states addressed liability to third parties, generally absolving inspectors of such liability. A total of nine states spoke to limitations of liability; six of these disallowed certain contractual limitations of liability. Case law may provide liability standards not available in statutory or regulatory regimes.

[rmaday]

Interesting that they dont list how many require a REALTOR on the HOME INSPECTION regulatory body.

[Gary Farnsworth]

So? What was the reason for this letter? Where are the responses? All states with some sort of "regulation" of home inspectors all have different laws. I do not know of one state that can/fund enforcement. Not one state will have any extra funds for years. It is time for de-regulation.

If home inspectors are regulated, states and the feds better start regulating home builders, contractors, repairmen, etc. All for one, one for all.

[James E. Braun, CMI]

It appears to be just stats that they keep, putting together the whole nation in perspective when it comes to home inspection licensing. It seems we are just numbers to them.

[Bob Elliott]

Originally Posted by gfarnsworth

So? What was the reason for this letter? Where are the responses? All states with some sort of "regulation" of home inspectors all have different laws. I do not know of one state that can/fund enforcement. Not one state will have any extra funds for years. It is time for de-regulation.

If home inspectors are regulated, states and the feds better start regulating home builders, contractors, repairmen, etc. All for one, one for all.

Just curious as why we would want those listed above regulated ,if we feel regulation of HI's is not needed?

As more and more of the buyers go on line to purchase or search in the future, the more wary they are of having the Agent pick there Home Inspection pro.

With Licensing there is at least some peace of mind involved ,that the Inspector is legit and can be tracked down .

Certification alone is not enough.

Just my opinion.

[Gary Farnsworth]

Licensing actually can restrict an inspector from doing a great job. You will have to use their (state) procedures, rules, even use their forms. Standards will restrict you from checking all windows/outlets/doors and will require you to only check a "represenitive number". I am not for restrictions. Licensing is just basic, in any form. Just because you have a driver's license does not make you a good driver. Anyone involved in a real estate transaction should then be licensed, as a home inspector is/will be. All for one, one for all. Just my opinion, and that of many others.

[Brian E. Kelly]

Originally Posted by gromicko

HOME INSPECTORS

ANNUAL REPORT EXECUTIVE SUMMARY

October 2008

Overview

Sixty-five percent, or 35 jurisdictions, of the 54 surveyed jurisdictions have enacted statutes or regulations governing home inspectors and/or home inspections, but:

* only 63 percent (34 states) had enforceable regulatory regimes;

* only 44 percent (24 states) set forth specific requirements for home inspections; and

* only 20 percent (11 states) addressed third-party liability or liability limitations related to home inspectors.

Of the jurisdictions with home inspection rules, most laws and regulations are of recent vintage. Only two states (North Carolina and Texas) had original home inspection rules dating from the early 1990s. The laws of 30 percent of the jurisdictions that regulate home inspectors were enacted in 2003 to 2008.

Licensure

Nineteen of the jurisdictions surveyed did not have home inspector regulatory laws.

Floria has passed a licensing statute, but delayed its effective date until July 2010. Washington's newly enacted law becomes effective January 2010, and Kansas' licensing law is not effective statewide until 2011, although in certain counties the effective date is July 2009. Rhode Island likewise has a licensing program, but its implementation remains unfunded. Pennsylvania has imposed practical standards on inspectors, but no license requirement, while Virginia enacted a voluntary certification program. Other states, such as Montana and Georgia, require only that a home inspector make certain disclosures and provide specified documentation to his or her client.

Of the remaining jurisdictions, the vast majority provided exceptions to the licensing rule, with common categories including government and code enforcement personnel and licensed real estate brokers, agents and apraisers.

Licensure Qualifications

Of the jurisdictions with licensure requirements, the majority rule, favored by over 95 percent of the licensing jurisdictions, requires a high school education, some practical or educational home inspection program, exam passage, and license fee payment. Insurance coverage, moral character, and minimum age were also required in some instances. Systems in Connecticut and Nevada were typical of this model. Some jurisdictions, such as Alabama and Indiana, barred applicants with certain criminal records.

Inspection Scope

Of the surveyed jurisdictions, 43 percent specify standards for home inspections. Of these states, half provided lists of features that should be inspected and reported; most states also listed exceptions, such as seasonal and temporary items on the property.

Liability

Eighty percent, or 43 jurisdictions, did not deal with limitations of liability or liability to third parties related to home inspection. Of the remaining eleven states, only Alaska, Kansas, Kentucky and Wisconsin had provisions under both categories, and only six states addressed liability to third parties, generally absolving inspectors of such liability. A total of nine states spoke to limitations of liability; six of these disallowed certain contractual limitations of liability. Case law may provide liability standards not available in statutory or regulatory regimes.

Did they pay for this study?

[Christopher Currins]

Originally Posted by gfarnsworth

Licensing actually can restrict an inspector from doing a great job. You will have to use their (state) procedures, rules, even use their forms. Standards will restrict you from checking all windows/outlets/doors and will require you to only check a "represenitive number". I am not for restrictions. Licensing is just basic, in any form. Just because you have a driver's license does not make you a good driver. Anyone involved in a real estate transaction should then be licensed, as a home inspector is/will be. All for one, one for all. Just my opinion, and that of many others.

Standards or a minimum requirement, they do not restrict. Most, if not all, State SOP's are VERY similar to INachi's.

[James E. Braun, CMI]

Originally Posted by bkelly2

Did they pay for this study?

I imagine that they gather stats on everything that affects their lively hood. They would have to keep very good records to understand where their lobbyists' money is best spent. They are in the business to make their members money and they achieve it the best through promoting or opposing legislation.

[James H. Bushart]

I am not aware of any other profession that spends as many dollars, as much effort, and as much time in monitoring and attempting to control ANOTHER profession other than their own as does the National Association of Realtors.

This, itself, should render their motives suspect to the discerning eye.

I find that when I have a one-on-one with a realtor, they generally are oblivious to what their state and national associations are up to.

For instance, when you talk to your local realtor, ask him what he thinks a home inspection report would look like if a law were passed to increase the inspector's liability....and ask them if they think it wise to support such a measure. They will say "no" in a heartbeat.

[James E. Braun, CMI]

I have noticed that to. Most Realtors are sheep in their own organization.

[Gary Farnsworth]

Great responses everyone. I could not have stated it any better.

[William J. Decker]

Ity would be interesting of NACHI, together with the other national associations, got together and researched and produced a similar report on:

- Realtors (i.e., agents)
- Real Estate Brokers
- General Contractors, developers, builders, etc.
- Electricians
- Plumbers
- Masons
- Framing contractors
- Insulation contractors
- Drywallers
- Landscapers
- Foundation and concrete contractors


You get my drift.

If such a report was well researched and well written, AND made public through newspapers, Angies list, Service Magic and other outlets, it would provide a VERY interesting source of information to the public.

Wouldn't you think

Hope this helps;

[William J. Decker]

Originally Posted by gfarnsworth

Licensing actually can restrict an inspector from doing a great job. You will have to use their (state) procedures, rules, even use their forms. Standards will restrict you from checking all windows/outlets/doors and will require you to only check a "represenitive number". I am not for restrictions. Licensing is just basic, in any form. Just because you have a driver's license does not make you a good driver. Anyone involved in a real estate transaction should then be licensed, as a home inspector is/will be. All for one, one for all. Just my opinion, and that of many others.

To expand on this idea, and, for the unteenth time, attempt to clear up a misconception, state SOPs and association SOPs do not RESTRICT what we, as HIs, do (with a few, minor exceptions).

SOPs describe a MINIMUM duty of service.

Take local codes. They exists to answer one, and only one question, and that is a question asked by the builder or sub-contractor. The question is this:

What is the bare minimum I have to do in order to get paid for my work and not get sued or put in jail?

State licensing SOPs answer the same question.

But, if you are like me (and I assume that most NACHI inspectors are) and you try to get better, every day, to do the best inspection for your client that you can and to raise the bar for the entire industry, you waste not a minute with doing the bare minimum. You will exceed, by a large margin, these bare minimum requirements. You will work, very hard, to do the best possible job for your client that you possibly can.

So, these bare minimum SOPs are of very little concern.

Hope this helps;

[Gary Farnsworth]

I agree. But in many states, such as Texas TREC, you have to go by their rules and procedures. They can even restrict the fees a home inspector can charge, and what is or is not stated in a home inspection report. The day is coming in Kansas when we cannot touch a stove, dishwasher, or disposal, even for safety reasons. We will be afraid to touch a light switch or open a window in the concerns for saying good-bye to our "license". This is where NACHI will be restricted for teaching us anything about our industry. They are limited to their vendor philosophy. The day is coming.