December 2011

New KBHI Chairman Writes to Builders & Remodelers

    Here's a welcome change of pace!
    The new chairman of the Kentucky Board of Home Inspectors (KBHI) just published  an article to help remodelers and homebuilders recognize what home inspectors do.
    He even says it is good for business!  And he’s right.
    Talk about venturing where prior KBHI chair’s feared to go in years gone by!  At last, home inspectors have an ambassador to our colleagues in other real estate fields. 
    Hats off to Mark Schmidt, the new KBHI chairman, whose article just came out in the current issue of “KBJ” (the Kentucky Builders Journal, a bimonthly journal from the  Homebuilders Association of Kentucky, or HBAK).
    Reaching out to other real estate professionals is long overdue.  The main regret PLI hears  from original KBHI members is their decision to “go it alone” – instead of working hard to collaborate with other real estate boards and groups.  For the last six years, the board might as well have worked in an echo chamber, all by itself.  The results were pitiful.
    This is the first time a sitting board chair has spoken out in print to allied professionals.  Not incidentally, this also is the best way for good boards to avoid problems, while improving  public service.  Think out loud, in public.  Let people who see guidelines or examples, and listen to the reactions.  Reach out to Kentucky.
 It is long overdue.  It is about time the KBHI starting improving relations – and understanding – between home inspectors and everyone else involved in real estate.   

     It’s the first time the board has reached out to the other groups and professionals home inspectors work with all the time.  We hope it is just the beginning.
    There is a reason  homebuilder, real estate sales, manufactured housing reps sit on the KBHI.  We need to work together better.  We also serve the public best by understanding and cooperating with each other better.
    Schmidt explores one of the quirks in the 2011 amendments to our home inspecting law, the new exemption from licensing for unlicensed “remodelers” doing home “evaluations.”
     He’s right that the change is loaded with lurking problems.  It is ironic most of them are of the KBHI’s own making.  
     The New 2011 “Remodeler” Exemption
     In a misguided maneuver, the half-empty KBHI voted to change the legal definition of “home inspection” to include home “evaluations.” at the suggestion of Mike Green.  It was trying to get one unlicensed inspector who called his home inspection reports “home evaluations.”  When remodelers read a home inspection license might be required for "evaluations," HBAK put in the exemption for remodelers -- as a reaction to foolish KBHI-proposed change in the definition of "home inspection."  (PLI pointed out the flaw in a memo to Legislative Research Commission draft revisers. No other state or national association of home inspectors participated.  But then, when "evaluation" later got dropped out of the inspection definition, the exemption was overlooked.  No KBHI members noticed, because they never showed up in the legislature during the hearings.  Kaboom!  New exemption -- and the first one that did not require a license or government employment.)  
     Trying to list ever funky name anyone could dream up for a home inspection simply is not the way to enforce licenses.  It does not matter what anyone names a home inspection report.  They can call it an “analysis,” or a “survey,” or a “checkup,” or a “banana.”  If the report is a home inspection report, then it takes a license.  Just like someone who practices medicine needs a license –  even if they call themselves an “oriental cure philosopher” instead of a "doctor."  Trying to list every phoney scofflaw name never works, for any license.  The list of names is as endless as people are creative.  Call it the “Quacks like a Duck” rule.  In fact, that’s exactly the phrase Schmidt used in his article.
     “Many have said there is a thin line between a home inspection and a home evaluation or assessment.  Really?” Schmidt wrote.  “If it walks like a duck and quacks like a duck, then it’s a duck.”
     Here’s the weird twist.  Leaving the exemption in, after "evaluation" was deleted, created a gapping mistake.  Writing laws is like making sausage.  You don't necessarily enjoy watching, but someone has to.
    Today, the remodeler exemption is the only free pass, or “exemption,” from the home inspector licensing law that does not require a license or a government job (with code enforcement or HUD).
    That’s the problem.  It’s a free pass anyone can claim.  Anyone can call themselves a “remodeler.”  So if a guy checks out a whole house, and writes a report saying the only significant deficiencies are “A” and “B,” it sure sounds like a home inspection report. 
    That’s IF it is done “for compensation.”  No “compensation” = no “home inspection” or report.  Schmidt’s article skirts the point.  Only one example mentions compensation.
    Most remodeling estimates are done for no charge.  Yet they are done to make money.  Maybe that’s “compensation.”  Then again, maybe not.  The KBHI will have to decide. 
Examples of Exemption
    If that is “compensation,” then the line will be drawn case by case, based on content in the “evaluation” (or report).  That’s basically the way appraisals are told apart from home inspections already.
    Schmidt gives three examples, or “scenarios,” to help draw the line.  They are black, white, and gray.  The first two both involve a client planning to buy an older home.
      1.  In the white example, the client asks a remodeler to “evaluate” the older home’s “bathroom, including its present fixtures, flooring, and support structures and asks for a written estimate.”  That’s “within the scope of a remodeler’s expertise.”
    Schmidt highlights giving a “quote for a specific job.”
      2.  For the black example, the client asks a remodeler to “check out” the old home to “see if there is anything that might become a problem” – and offers the remodeler $500 “for his expertise.”
    “This request should be referred to a licensed home inspector – period,” Schmidt writes.
      3.  What about “creating a checklist for potential clients to use for a home evaluation” if the list falls “‘just short’ of what an inspector would do”?
    Schmidt’s answer was no.  “I ask again, who would want to take on the liability of a home inspection without being licensed?  And ethically speaking, it is this remodeler’s opinion that the line should not be crossed,” Schmidt wrote.
    That remark also makes you wonder exactly how much guidance the article provides.  A “fair amount” would be a nifty answer.
    The article’s “by-line” says “By Mark Schmidt Chairman, Kentucky Board of Home Inspectors.”  But writing in the first person under his remodeler’s hat (“it is this remodeler’s opinion”) almost makes a reader think otherwise.  So, maybe it’s not perfect.  Maybe it is not "precedent."  But any public guidance is better than none.  Right, wrong, or due for improvement, we desperately need the Board to law out precedent, in case decisions, and in articles, and open the discussion so everyone can be involved who wants to be.  That's how good rules get crafted over time.  This is a great start, and a step in the right direction.
    The article was circulated among KBHI members, and mentioned briefly at the board’s October meeting.  Though no vote on it was taken, it seems to represent the thinking of board members as a whole.  The idea of a “checklist” type report also has come up at the KBHI several times, most recently in September.  Each time, the idea that a 220 item checklist, for example, was a clone of a home inspection report was the general view, though no vote was taken then either.  (One could be soon, on that issue.)  Anyone out there could be forgiven for believing the examples are reliable.  Yet, no matter how the board treats Schmidt’s guiding examples in the years ahead, any discussion at all is far better than none.
    Some “real life” examples would have been nice.  There have been several, in prior complaint cases (and an inquiry concerning HUD) but the KBHI has lost much of its history.  It has no compilation of prior precedents, or case decisions.  Most KBHI members today have no idea what was decided before they got on the board -- and it is next to impossible for them to find out.  That’s a sad legacy of its last three “secret years.”  It is recoverable, of course.  PLI, and probably others, have taught KBHI decisions and actions for years.
    Drawing the line as his made-up examples do, between licensed inspections and remodelers estimates, is good for the remodeling business too, Schmidt adds.
    It’s good for everybody.  For years, PLI seminars have helped other pros recognize that home inspectors doing their jobs well are great for their friends businesses, from remodelers to electricians – really, for everyone in real estate.
    The truth is, Kentuckians call in remodelers, electricians, plumbers, roofers, basement waterproofers, and many others every year because home inspectors recommend it.  Lots of people turn to home inspectors to find good builders and remodelers.

 

    You can read Schmidt’s article at http://www.hbak.com/kbj.  HBAK posts KBJ articles bimonthly, so it make be a month or two before the current issue (vol. 19 no. 6, Nov/Dec 2011) is available.