Home inspectors face regulation
House Bill 9, which was sponsored by Anchorage Republican Norman Rokeberg, passed the House by a vote of 24-11. It will now move on to the Senate.
If the bill is ratified by both the Senate and Gov. Frank Murkowski, it will become law and be enforced by the Department of Community and Economic Development’s Division of Occupational Licensing. The license will also be self-funded, according to a member of Rokeberg’s staff who spoke on background.
The staff member added that real estate agents, the Alaska Housing Finance Corporation, the Municipality of Anchorage, along with the home inspectors, had all publicly supported the legislation over the course of its four-year lifetime.
"Rep. Rokeberg first introduced this bill in 1999, and it’s gone through more than 20 committee hearings," she said. "Many, many members have seen this before."
The bill did not, however, receive the universal support of the real estate industry. Some inspectors claimed the bill, which lumped together both new-home inspectors and existing-home inspectors, discriminated against those that specialize in new houses by making them liable for the construction.
"I agree with the intent of the law, but not with the wording of it," said David Owens, the owner of Palmer-based Owens Inspection Services and a member of the Matanuska-Susitna Home Builders Association.
Owens explained that private inspectors were given some limited legal protection under a provision in the Alaska Housing Law. The bill would repeal the protection if it gets passed into law. That means private inspectors must increase their insurance because they could be held liable for any problems that might arise with the house.
Kevin Jones, the president of the Alaska Chapter of the American Society of Home Inspectors, or ASHI, and owner of Quality Home Inspection Services in Anchorage, said he understands the new home inspectors’ concerns, but he wasn’t sure if they were completely valid. Rather, he said, it is important that the industry establishes some sort of quality guarantee.
"ASHI’s position is that they support the licensing of home inspectors, and I support that," he said. "Right now, with a $50 small business license, anyone could go out and call themselves a home inspector. There’s no consumer protection out there at all."
A bigger issue, Jones said, is the lack of a statewide building code. Anchorage, for example, follows codes written in 1995, while inspectors in the nearby Matanuska-Susitna Valley work from codes written in 2000.
That variation causes some problems for inspectors that work in both areas, he said, but at the same time, "that’s probably another reason to have some integrity in the industry."
"We are putting the cart before the horse with this legislation," he said. "It is very difficult to regulate an inspection activity when there is no standard in place to compare it to."
Rokeberg’s staff member said she heard the inspector’s concerns before, and that the representative did everything possible to address the complaints. Most of the opposition, she said, arose not from the codes, but as a reaction to change.
"When you take people who had freely been able to do whatever they wanted and tell them they need a license and to take some exams, there’s going to be some opposition," she said.
Legislation "missed the boat"
If H.B.9 is approved by both the Senate and the governor, Alaska will join about 25 other states in having active legislation to regulate home inspectors, the staff member said.
According to Stan Harbuck, the trainer and a home inspector with H.E. School of Building Inspectors in Salt Lake City, Utah, however, most of that legislation misses a bigger problem with home inspection. Rather than regulate the competency of professional home inspectors, the Legislature needs to regulate the relationship between real estate agents and their inspectors, he said.
Harbuck said most real estate agencies maintain a list of inspectors with whom their agents have worked successfully. When an agent closes a deal on a home, he or she may legally recommend at least three inspectors to the client. The problem, Harbuck said, is that many times the inspectors have been prescreened to assure they won’t slow or stop the sale of the house.
"It would be 100 times more effective to prohibit real estate agents from having contact with the inspectors," he said. "Virtually every state out there that has passed a license law missed the boat."
There was no stipulation in H.B.9 that minimized the contact agents may have with inspectors, the staff member said.
Clair Ramsey, an assistant broker at Dynamic Properties, said he supported the bill as it was, and that he didn’t know of any situation, first-hand, in which an agent had tried to sway an inspector’s report.
"My own personal experience is that, here at least, the opposite tends to be true," he said.
Actually, Ramsey said, concerns about litigation make agents and inspectors overly cautious when it comes to noticing problems. Past lawsuits have shown that, when a house falsely passes an inspection, the inspector, the agent and the seller have all been found liable, he said.
"The agent should be counseling the client on who he or she feels should be looking at this particular home," he said.