January 2011
Jan. 28 was Data Privacy Day in Kentucky -- And the World Wide Web.
Attorney General Jack Conway posted a notice to remind Kentuckians about the importance of checking privacy settings on social websites and using secure networks.
"Kentuckians need to be aware that many social network websites, such as Facebook, allow users to limit who can view the personal information in their profiles," General Conway said. "Additionally, consumers should be aware that wireless routers purchased from the store are not automatically encrypted. The encryption feature must be activated to ensure that your personal information is protected."
If you're using a router, there's a helpful site for configuring your router at: www.onguardonline.gov/topics/wireless-security.aspx
Facebook joined Data Privacy Day by reminding its users to review their privacy settings found both at the bottom of every Facebook page and in your account settings. More information is available from Facebook at http://www.facebook.com/privacy/explanation.php .
You can also visit the Attorney General's web site for tips and useful information about social networking at http://ag.ky.gov/cybersafety/socialnetworking.htm. OnGuard Online provides practical tips from federal government agencies and technology experts.
The dependable Online Trust Alliance's updated planning guide to help businesses protect data and prepare for potential breaches: https://otalliance.org/resources/Incident.html.
Additional privacy resources
Kentucky Attorney General's "Cybersafety in Kentucky" website provides a wealth of information to help adults, teens and seniors stay safe online, including tips on social networking, cyberbullying, cyberstalking, identity theft, and protecting your computer: http://ag.ky.gov/cybersafety
More on Data Privacy Day at: www.dataprivacyday2011.org
RESOLUTION 1:
Grow Even As Home Sales Shrink
“Developer May Take Car, Truck or Boat as Down Payment for Your Home,” headlined the ad in The Courier-Journal HomeFinder (carbon copied into the website) January 2, 2011.
“Below Market Rates” advertised another builder in the same paper.
Both ads showed up in probably the skinniest Real Estate classified section we can remember.
2010 was one of the toughest home sales markets in the history of home inspecting.
They’re Not Selling ‘Em Like They Use To
Louisville home sales plunged more than 25% in the last five months of 2010 compared to this time last year, the Greater Louisville Association of Realtors says. (C-J 01022011D2)
Lexington probably was a little worse, dropping around 34%, based on numbers for September, 2010 sales.
State-wide numbers were closer to Louisville. Homes sales were down 24.9% across the state, using Kentucky Association of Realtors (KAR) latest report, for September, 2010.
Statewide, 2,617 homes were sold in September, 2010, down 24.97% from the 3,488 sold in September, 2009.
These numbers were in line with PLI’s forecasts in the planning issue. We can fine tune them now. This is not a bad place to start building your 2011 business plan. And now, during the usual January slowdown, is a good time to update all our business plans.
Total Inspections
Figure on an average 3,050 homes sold per month for 2011 throughout Kentucky.
Call it 36,600 for the year. That’s low, compared to last year and the years before. But it’s probably a safe estimate.
Imagine only half of those sales have buyers smart enough to get a home inspection. That’s around the national average two years ago.
That would be 18,300 homes to inspect for 2011 in all of Kentucky. That’s probably the low side, state-wide. In some areas, like Northern Kentucky, inspectors estimate more like two-thirds of homes sold get inspected (going on what we hear from hundreds of inspectors each year in PLI seminars).
Divide that 18,300 home sales by Kentucky’s maybe 370 licensed inspectors. You end up with about 50 inspections per inspector, on average.
You can’t live on that.
It drives you to the conclusion that quite a few licensees do not, in fact, live on home inspecting. A total of 243 one-time inspectors dropped their licenses by the time the Kentucky Board of Home Inspectors (KBHI) ended 2010. A bunch of them probably were part-timers. Many would like to make the work full-time. They’re just working on how.
Doing more than that 50? You’re beating the average. You’re among The Proud. The Few. So build that business. Long-term, the ones that weather 2011 will eat up 2013.
Now you know why our last Newsletter suggested using this slowdown to work up the best marketing.
Inspectors, plain and simple, have to reach more buyers. The KBHI should help, obviously. In other licensing states, and at the federal government, it’s considered an important consumer protection to encourage home inspections. So they have tens of thousands of brochures on the protections of a home inspection, spread out in real estate agent offices, mortgage banker and broker offices, and more. For some reasons, that has not dawned on the KBHI. Instead, with its inspector license fees idly collecting dust, about $225,000 has been scooped out of the KBHI’s hands in the last two years. Some serious public service from the KBHI would be welcome, but we’ve been waiting.
Business growth overall has to come from the uninspected homes and from prices. A few will grow picking up the pieces of others who leave.
Success, and in some cases, survival, will come from marketing in 2011, more than ever before. To do marketing well – here we go again – you need to do a business plan and a buget.
Begin by narrowing the home sales numbers to your market.
To localize home sales in your area, use these numbers. Homes sales are divided up in the only reliable way we have. That’s using KAR home sales reports. They split into six regions. Each region approximates the size of the local pie inspectors there will split up.
Region One (Western, Paducah, Ownesboro, Henderson, Hopkinsville, etc.) is around 11.5% (302 of 2,617 for September, 2010) of Kentucky sales.
Region 2 (South Central, from E-town to Russellville to Shelbyville) has about 16.7% of sales (438 of 2,617).
Region 3 is Greater Louisville, with 31.5%, or 826 of 2,617.
Region 4 is Lexington Metro, at 17.7% (465/2,617).
Region 5 is northern Kentucky with around 13.8% (363/2,617).
Region 6 is the southeast (Cumberland Valley to Ashland to Somerset) with about 8.5% of recent Kentucky home sales, or 223/2,617. (There are even narrower breakdowns in the KAR reports, but local associations don’t copy home inspector service areas very closely.)
Annualized, that means planning for something like:
Region 1 sales = 2,105 (11.5% of 18,300) home inspections for 2011. Remember, that’s at an arbitrary 50% of total home sales, so there’s plenty of room for improvement!
Region 2 sales = 3,056 inspections for 2011.
Louisville, or Region3 = about 5,765 home inspections for 2011.
Region 4, Lexington, works out to 3,239 home inspections.
Northern Kentucky, Region 5 should be about 2,525 inspections.
Region 6, always the short end of the stick, works out to around barely 1,555 inspections for 2011.
Every region also has a piece of the border, so there’s a little crossover inspecting available to add in too. Northern Kentucky has more puddle jumping than the other reasons, because Ohio has no licensing.
There were some bright spots in 2010. Real estate always is local. National and state numbers work for investors, banks and Washington bigwigs. But for home inspectors, it’s not national, it’s all local.
The Elizabethtown area, for example, was up 1.7% for September, compared to 2009. Development around Fort Knox as the base grows is a big driver.
Paducah, the market that always seems to surprise, was up 4.69% for September.
The standout exception, percentage-wise, was the Madisonville-Hopkinds area, up 21.43%, and Kentucky-Barkley Lakes region, up 20%, in September. Both are low volume regions, so bigger percentage gains come easier off small numbers. Sales for September, 2010 in Madisonville-Hopkins totaled 34 homes, compared to 28 for 2009. The Lakes area had 24 home sales in September, 2010 (through September), compared to 20 through the same date a year ago.
Paducah, on the other had, had 67 homes sell in September this year, compared to 64 same time last year.
Louisville home sales were 826 in September, 2010,. compared to 1160 for September, 2009. Lexington 465 for September, 2010, way down from 711 for the same month last year. Northern Kentucky sold 393 homes this September, down 16.5% from 435 for the same month last year.
The median price for homes sold across the state rose a hair to $110,000 in September, 2010, from $108,250 for the same month last year.
Eds. Note: September counts are used for several reasons. Full-year stats were not out when this was published, and those numbers usually get revised later anyway. December is not a typical month; it’s part of the low cycle in this business. And tax incentives, federal, through October, and state, through December, artificially influenced 2010 numbers, pulling future sales forward in time. September was the only close to normal, unstimulated, pre-low-cycle month.
Part II – Next Newsletter
Only the Strong, Not the Cheap, Survive
GADGET GOODIES
Now is the time to pick up the Geek Goodies you put off all last year. Late January through February is tech sale season. That’s the time stores clear shelves of “last year’s” everything – from cameras to computers. And scavengers like us go bargain shopping.
Professional Learning Institute’s New Year review is your shortcut to all the testing of 2010 and classroom feedback from inspectors.
Digital Cameras
The Canon PowerShot SX20 IS tops 2010's list of compact digital cameras with serious zoom (socalled “megazoon”). For openers, there’s the big-league 20X optical zoom lens. Anything over 12X optical zoom works for chimney and vents, and can shoot nail heads on most roofs from the ground. There’s a flip-out LCD, so you can shoot around corners and over junk in limited access crawls or attics. We’d like to have a view-finder too, but that’s rare now. It uses four AA batteries you can replace at the corner drug store. Four fresh batteries is plenty for 500 pictures. The built-in flash is above average. Its ISO equivalency settings go up to 3200, exceptional help for low light pictures. Response time was good, too. We’re not fans of waiting for the shutter to shoot. There’s almost too much – like a set of exposure options from full auto, aperture priority , and program mode to over a dozen scene modes. There’s even 720p HD video, with an HDMI port. We don’t favor megapixels, but, for the record, it’s a 12.1 MP sensor. The more MPs in a report, the bigger the file when it’s emailed, and the likelier it is to get swatted by server firewalls, not to mention sucking space on your computer. $400 list; $369 street. Consumer Reports rated it “Recommended” and pcworld gave it 4.5 of 5 stars (“Superior”).
Second place was a “photo-finish” between the Nikon Coolpix P100 (26X optical zoom, $400 list, $288 from B&H at 1/5) and the Olympus SP-600UZ (15X optical zoom and a Consumer Reports “Best Buy” at $200 list, $169 at B&H). You can buy basically the same Nikon, with a smaller 15X zoom, at $260 list, by going to the Nikon Coolpix L110 (Consumer Reports rated both Nikons “Recommended”). The problem with the Nikons is Nikon’s expensive proprietary batteries, Li-on EN-EL5s. No matter how hot a camera is, it’s worthless if it’s dead. We’ve used rechargeable off-the-shelf AAs forever. Even though we carry three sets (12) in the bag, being able to make a quick stop at the drug store or gas station for replacements has come in handy. Beats a return trip to the office to recharge, or pick up Nikon batteries (in their own proprietary charger). The Olympus uses 4 AA batteries. The LCD screen is a little bigger, 3 inches, for the Nikons. All three are about as good for low light photos and flash photos, though the Olympus trails a bit. The best ISO for the Olympus is 1600, half the Canon or the Nikons. That will cost you at night. Sensor sizes are the same, around 1/2.3. The P100 is a more manageable 10 MP; the other two are 12 MP. The P100 also had the best response time.
For user reviews, check out the comments at B&H and Tristate.
TECH TIPS
Digital Cameras
The biggest news in digital cameras coming out of the Consumer Electronics Show, the industry’s annual curtain raiser, is bigger sensors – at last. Sensor size is way more important to performance and picture quality than the hype about megapixels. Look for PLI’s review in an upcoming issue!
Cell phones
The good news is some phones are actually getting “smart,” and a few are starting to get fast. The bad news is that’s enough like a computer, and connected enough, to open the door to hackers. And who’s got antivirus software on their cellphone, like your computer? A number of downloadable apps, even in maker stores, recently turned out to include malicious code or invasive surveillance. Among the worst that’s bleeding consumers is “cramming” hacks. Remember “900 number” calls, that would put sneaky charges on your phone bill? Say hello to cellphone cramming.
Cramming. Hackers have found a happy hunting ground of cell phone charges. In 2010, complaints about small unknown charges on phone bills grew spectacularly. They’re easy to miss and a hassle to fix.
Notify your carrier to install a “cramming block.” It prevents third-party charges. It’s also free.
Printers
Tired of paying a fortune for printer cartridges and aging while you wait for it to print? For years, printers were the ‘same ol’ same ol’” inkjet or laser. Selling printers was the “give ‘em the razor, sell ‘em blades” Gillette model: Sell cheap printers, make money on ink.
A change is in the works at last. Watch for “Memjet” printers. The first Memjet printers are being sold by Lenovo abroad now. It’s a simple idea. Instead of sliding a small print head back and forth across a page, Memjets use an 8.5 inch page-sized print bar. It prints the whole line at once and just rolls paper through. (The name comes from “micro-electro-mechanical systems,” of MEMS technology, used for super precise, small devices.) The result? A color page in just one second. Plus a fraction of the cost in ink. Ink for the first Memjets costs about 5 centers per page, compared with 12 cents to 25 cents per page for laster toner or inkjets. Shown at the Consumer Electronics Show last week, a Memjet printer easily turned out a color page per second, with print quality as good as top office injets. They won’t be in an Office Depot near you tomorrow, but keep you eyes peeled.
Heads Up, Inspectors
“Building Analyst Certification” is available – and subsidized – for maybe another month or two.
It’s not a bad idea when things are slow in the first quarter.
Nobody asked the Kentucky Board of Home Inspectors (KBHI) about exactly what a “building analyst” might be. Natch. Why bother?
Consider bundling a “Comprehensive Home Energy Audit (CHEA) summary” as a service option in your contracts. They’ll be catching on.
For more info, go to http://kyhomeperformance.org. You can load the contract, and certification rules, while you’re plugging in for the $1,000 subsidy. Counrtesy of Uncle Frankfort, unknown to Cousin KBHI.
Tricky New KBHI BILL
CAN'T COUNT
A squirrely new bill, proposed by the Kentucky Board of Homes Inspectors (KBHI), for the legislature’s current special session has been turned in.
The measure was presented to a Senate Licensing, Occupations & Regulations member last week under the title “Amendments for Moving KBHI.”
It does way more than that.
Here are some highlights:
In a departure from normal, it tucks in changes that are not underlined or indicated in the text. Maybe it’s by accident, but, at best, it’s sloppy, like most of the rest of the bill draft.
For example, it changes the definition of “home inspection report” to mean “a written report, evaluation or summary of deficiencies ....” But that change is not signaled by underlining, as is usual, or otherwise flagged for the legislature to see.
This is no small change. Who knows how far “evaluation” or “summary of deficiencies” could reach? It is not much of a stretch to say it would be easy to apply that to remodelers, for example. How about engineers? What about the building analysis report from the new “Kentucky Home Performance” operation at the Kentucky Housing Corporation?
The KBHI probably believed the change would help it stop unlicensed inspectors, who have been calling their reports anything but a “home inspection report.” The unlicensed are fond of trying to dodge the bullet by calling their reports a “building analysis” or “home evaluation” or “summary of deficiencies.” But this is the wrong answer.
No licensing board has to lift every alternative or unscrupulous name for the practice it licenses. No one can keep up with all the ingenious new names unlicensed “wannabes” can dream up. If it walks like a duck and quacks like a duck, it is a duck. If they say a home inspection report by another name is not a licensed activity, let the courts decide.
It changes the membership of the KBHI. But somewhere, it lost count. The bill says the KBHI “shall be composed of ten (10) members.” KRS 198B.704(2).
Then it lists them. Count along:
It says there will be six (6) home inspectors. Plus two (2) home builders. Plus one (1) realtor. Plus one (1) manufactured housing rep. Plus one (1) member of the public at large.
You can do this on one hand: 6 + 2 + 1 + 1 + 1 = ten (10)? Dis you say 10? Or eleven (11)?
Did we mention sloppy?
It deletes all reference to any ethics, again without any signal in the bill draft to indicate the change.
Current KRS 198B.704(19) requires “automatic removal” of a KBHI member who “fails to adhere to a duly adopted code of ethics of the board.” That’s gone. But legislators could not see that from the draft. It is not crossed out, as is usual. It’s just evaporated, MIA, gone.
It deletes the present statutory limit on KBHI disciplinary powers – again, without a flag, a signal, or any “heads up.”
Present law says the KBHI can “deny, suspend, place on probation, require additional continuing education and revoke” home inspector licenses – “for violations of KRS 198B.700 to 198B.738.” The first part, about denying and suspending, is still there. But the second part, “for violations” of the licensing law disappeared – again, without any indication in the bill.
This is a major, substantial change.
Does the Board really want the General Assembly to change our licensing law to allow suspending or “permanently revoking” (also a new phrase) licenses for supposed violations of any law, state or federal? Without the bill even saying that’s what it’s doing?
It sets up a new and secret punishment called a “private admonition.” This is a totally new idea at the Department of Housing, Buildings and Construction (DHBC).
DHBC has adhered to the principle that if a wrong was important enough to discipline somebody, it was important enough to be public. There are no “private” admonitions, or punishments of any kind, for DHBC licenses.
KBHI - AN "INDEPENDENT AGENCY"?
The main thrust of the draft bill is to make the KBHI an "independent agency" and move it out of the Department of Housing, Buildings and Construction (DHBC).
Why?
The KBHI gives only one reason for wanting the change. It blames DHBC for "sweeping" the cash it left sitting around untouched for years. If it's not in DHBC, and it's an "independent agency," DHBC could not swipe its money again.
Every home inspector we know is unhappy that $124,000 of our hard-earned money was taken to balance the state budget in 2010 -- and another $100,000 was "swept" in 2008. That's for sure.
But the KBHI has only itself to blame.
There would have been no money to take, in 2008 or 2010, if the KBHI had been getting its job done. That's what it was supposed to do. Our money was never supposed to just sit there. Money would not have been there for DHBC to take in the first place, if the KBHI had put it to work.
But the KBHI never spent anything for consumer protection or public information. It never printed a brochure about the need for home inspections. It never put an ad on TV or radio to explain the protection of a home inspection. It never even distributed the HUD brochure by nearly the same title: "For Your Protection: Get a Home Inspection." It never set up seminars for first-time home buyers or mortgage bankers and brokers. It never met with other boards and commissioners, like the real estate commission, to co-promote a pamphlet, or a booth at home shows. It never campaigned to get home inspectors on talk shows to explain the importance of home inspections -- in the middle of the worst housing crisis in American history.
When the state ran short of cash and looked for idle cash sitting around state agencies, the KBHI six-digit bank account was a sitting duck. DHBC did as it was ordered to do. Its accountants totaled up what KBHI actually spent in the year before, left that (for it to keep up what it obviously decided it needed to do), and took the rest. Most DHBC boards and panels were running in the red those years. They had honest jobs and work to do. But not KBHI. It was always in the black, doing nothing.
To be crystal clear about this, there was no surprise here. None. The KBHI was warned repeatedly -- in public, at its meetings -- months and months before its cash was swept. Just in case KBHI members were not reading the newspaper. Everyone knew that the Governor and the legislature would grab all the idle cash. And still the KBHI resolutely did nothing. So, guess what, just as warned, each time, in 2008 and 2010, the KBHI's money, that was doing nothing but collecting dust, got taken.
The real question is not how to insulate the KBHI against "sweeps," it's why it did not do what it was supposed to do with its money. It just may be that it takes almost a quarter million dollars of our money swept away for the KBHI to wake up and get motivated to do its job.
So if the KBHI is serious about avoiding "sweeps" and losing our money, again in the next sweep, there is a simple, straightforward way. Just put the money to work, now, on the public purposes intended. That means consumer protection, public information campaigns, and court action to take unlicensed inspectors off the streets. It does not matter where you are in state government if you either cannot or will not do your job.
If the KBHI still is unable or unwilling to get its money to work, then it should just cut down license fees. Promptly. Cut the $250 annual license fee. It never was intended as a giveaway or a sneaky tax on home buyers. There was an excuse for the $250 five years ago. The new KBHI did not know what it would spend. Now we know.
Practically every dime of the KBHI's revenue comes from home inspector license fees (the small remainder is from educational providers -- that home inspectors pay for services). Consequently, all KBHI revenue in the end derives from the public that pays us. It was that same public that was meant to get the benefit of license fees passed on to clients by inspectors. Instead, the public has been shortchanged and home inspectors have been chiseled.
If the KBHI cannot put our money to work, it should get its hands out of our pockets. We should keep it. Slash the license fees.
Let's forget keeping inspector cash in the bank as a reason worth moving the KBHI out of DHBC.
It's a good reason for the KBHI to get to work.
Let's also remember there were some seriously fine things about our Board's relationship with DHBC. Likewise, their also were some constructive contributions from the Public Protection Cabinet (DHBC is part of the Public Protection Cabinet; so is the KBHI).
For example, when the KBHI met at DHBC, it had Terry Slade, DHBC's Director of Enforcement, at every meeting. He knew what he was talking about. He knew building construction standards cold. He also had decades of licensing in the home building arena under his belt. Not least, he knew state law and was scrupulous in following it. Brother, is he missed!
Still, if the KBHI stayed with DHBC, it would have access to the same type. It sorely needs skills like that, at that level. Even if it has to spend a buck to make sure it gets them.
There's nobody at the Office of Occupations and Professions (OOP) who can take Slade's place, not even close. OOP's strength is managing paperwork, running what amounts to an "office sharing" deal. They are just fine at making sure there's a conference room when the KBHI meets, and somebody answers the phone and handles the mail, the paperwork, and the KBHI expense checks. But telling a muntin from a mullion is not on the list of their strengths. They're not housing and construction people or real estate pros, they're office administrators. There are capable administrators there, but no home mechanics or builders.
That administrative backing is important, and it has a place. But it's not enough to get the KBHI working. DHBC can help with that in ways OOP cannot.
From DHBC's side, though, the minuses outweigh the plusses. The KBHI chews up gobs of DHBC staff time and resources. All the other boards, panels and committees at DHBC have meetings that last maybe a half hour, or an hour, wrap their work up and move on. KBHI meetings are more like all day. It practically never wraps up anything. It was meant to meet quarterly but it's determined to meet monthly -- and more (members gets paid by the day).
There are some plusses, of course. The KBHI can pay DHBC for the services it consumes now. It wasn't allowed to, by law, from 2005 through July, 2008. That start did not help the relationship between DHBC and KBHI at the beginning, but it's over. The law was amended in 2008.
Totaling up the score on that track record, in the end, DHBC can be expected to support any bill that would move the KBHI out.
Some at DHBC think putting the KBHI under the Kentucky Real Estate Commission (KREC) is the logical thing to do. They also think it might at least satisfy everybody's immediate goals too. It would bounce the KBHI out of the DHBC. KREC's an "independent agency." So the KBHI would have its shelter against sweeps. That's the KBHI's announced goal. And KREC not only does not get swept, since it's an "independent agency," it also has managed its affairs well enough that it has a comfortable budget balance. It knows how to spend its money productively on public information, seminars, and publications. It also has efficient, dedicated staff who know real estate like the back of their hand.
But who knows if KREC wants this puppy, or would give it a home? There was talk of putting the KBHI under KREC back when the original licensing law was passed. KREC showed no enthusiasm for that idea then. Unfortunately, the KBHI never even asked. But it might be worth a shot.
Whatever the chances of shifting the KBHI to KREC, if the KBHI leaders pursue this "independent agency" idea, it would avoid at least one critical problem.
Along with hanging on to its own money, being an "independent agency" also creates a risk that other state agencies do not have.
An independent agency can commit bankruptcy. State agencies cannot.
If KBHI were an independent agency today, it would have less than $20,000 in its bank account, and be almost two years away from its next income stream/license renewal cycle, in 2012. It would have barely a trickle of cash from new licenses. It has had a net loss of licensees for over a year, in part due to its underwhelming performance, so it's renewal cycle in 2012 is likely to be the smallest ever. It pays about $40,000 a year just for its office, and pays in the vicinity of $18,000 for its members reimbursements, per diems, perks and other outlays. To this day, it never even has had a Board adopted budget.
"Independent agencies" get no funding from the state. That's one reason why they get to hold on to their own money. If the KBHI were an "independent agency" by itself -- outside KREC and DHBC -- it's not the least bit certain that it would not get into more trouble.
A KBHI bankruptcy -- however the remote the odds are --- would be a monster embarrassment. No one wants to go there.
Finally, there may be an ulterior motive in the KBHI's pursuit of "independent agency" status too. At least two KBHI members are doing everything they can to wiggle around the state's ethics rules. Self-serving actions, conflicts, and prohibited gifts have been a persistent problem for home inspector members since early 2009. The KBHI repealed its own code of ethics a little over a year ago, after several members violated it. Now it wants to repeal the ethics rules in KRS 198B.704(19) too, it seems, as part of this bill.
The reasoning in support of independence for this Board is far from obvious, or hands down.
Nevertheless, if there were clear ethics requirements and discipline rules in place, much as there are at KREC, the main downsides to converting the KBHI into an independent state agency probably would be mitigated enough to make it tolerable.
That's far from crystal clear, but not impossible. There are ways it might work. Just probably not this way.
Money
The National Association of Unclaimed Property Administrator say 1 out of 8 people have money waiting for them to claim. Most unclaimed assets – forgotten bank accounts, utility bill deposits, you name it – are turned over to states. But states hold them only a certain number of years. Check at www.unclaimed.org.
www.FastWeb.com has become a (free) leader in finding college scholarship dough for the kids. If you’re there, look. Or get the kids to check it out!
End gift card headache, and get cash or a discounted card, at either www.PlasticJungle.com or www.SwapaGift.com. Sell that unwanted gift card for cash – before it “expires” and the store sucks up the dough. Or buy an unwanted card at a discount. Handy. Remember you can gift yourself. Every Christmas, one of our favorite restaurants promots gift cards. But $100 worth and get a $25 gift card free. We’re in. We eat there lots, for business and pleasure. At 25% off menu prices.
Watch credit card deals too. The new federal rules will produce a shower of offers, most of which will just be trying to hike fees. But some underdog cards are trying to stand out from all the Visa/MC price hikes and flim flam. Underdog cards are offering up to 5% credits for every purchase, including groceries (like American Express Blue Cash), or cash back on every purchase (like Discover). Be careful about hidden fees, of course, but take what you can get.
The Thank You Network, at www.thankyou.com. is a little new, but its “here’s a cherry on top” plan seems promising. You earn points on the network for what you spend, using their credit cards (like Citibank) and sellers (like Expedia). Those points can buy everything from office equipment to an iPod and, you guessed it, $100 gift cards to retailers like Home Depot or Barnes & Noble.
There are billions of dollars in housing grants, including home renovations, first-time home buyers, and folks with impaired credit, just for starters. To start looking it over, begin with www.hud.gov. (HUD does not offer direct grants. It sets up local programs with many agencies.)
Web Apps
Credit Charges by Phone.
The best reason to buy a hot new smartphone may be the idea from https://squareup.com. You can swipe a credit card anywhere, on a mobile phone, with its gear. Sign-up is free right now. The company just raised $27.5 in a new round of financing, so it's here to stay. It offers a small credit card reader that plugs into most smartphones. Works for iPhones 3G and 4, and for most Android phones, like the HTC Nexus and Evo, LG Allay, Motorola Droid, and Samsung Galaxy.
Mental aerobics.
Skip the Wii and the X boxes. Shot ‘em ups get tired fast. Flip to www.Riddler.com. Play IQ Trivia, Wheel of Fortune, card games, even cyber darts.
Meth labs?
Check www.justice.gov/dea/seizures/ky.pdf.
Pick a state, then scroll to county, city and street address. Date included.
INSURANCE
Here’s New Year insurance checklist for working home inspectors.
First, remember that homeowner’s insurance does not normally cover a home office or business property.
Second, you know, homeowners does not cover floods. And you know – global warming and all that – the oceans are rising, Manhattan will be underwater (at last) in a year or two, etc. Not to mention the chincey local government or sewer district that’s short on cash, and maintenance, letting your storm water back up indoors.
Last, consider “off-premises theft.” It used to be standard for homeowner policies to cover theft of personal property even when stuff was stolen away from home. Today, that coverage is uncommon. Things stolen from cars and trucks generally are not covered by auto insurance either.
Solving all three hassles is fairly easy and inexpensive. An off-premises theft endorsement can be added to most homeowner policies for around $20-$30 a year, for example.
Complaints & Discipline
Proposed 815 KAR 6:060
The proposed new Complaint procedure regulation is a top-to-bottom rewrite. A full disciplinary statute (as applies to KREC, for example) or a rational regulation has been long overdue.
The good news is that the KBHI at least tried, finally. The bad news is that the regulation is such a thorough mess that they – and the public and all home inspectors – would be better off if they had not tried. Or least kept trying.
As usual with this Board, they carefully decided to start with two strikes against themselves.
They never looked at the disciplinary rules or litigation in other licensing states, so they were clueless about what has worked and what has not. Getting staff to give them a memo on the experience elsewhere would have been a leg up, instead of trying ESP to reinvent the wheel from scratch. Strike one. (As PLI readers know, the Board actually started with a disciplinary regulation from the Board of Massage Therapists, but that’s another story....)
Then, instead of inviting everyone affected to pitch in, the Board whipped this up basically in secret, never letting a draft leave the room.
On top of the experience of other states, the Board has a ready reservoir of expertise it could have tapped – such as feedback from KREC and KAR; the homebuilders and manufactured housing members could have solicited ideas from HBAK, KMHI, and other homebuilder groups; its education providers could have provided feedback from classes and instructors, and so on. There are a dozen or so consumer groups defending people in foreclosures and bankruptcies, and key groups of lawyers defending or complaining about home inspections, that could have been brought into the loop. The drafts could have been posted on the KBHI web site for comments. But no.
None of that happened. Strike two. Serving the public is really hard when you cut it off.
So these proposed regulations are unveiled in public here for the first time here – only days before the LRC hearing for comments on them.
What It Does Not Do
What the proposed regulation does not do, or undoes, is as important as what it says it does.
Privacy. Current Board rules give complaints a number, to identify the case, instead of using a licensee name, for example. The rule that names will not be used, for example in Board minutes, in the complaint process until there is a finding of wrong-doing is nowhere to be found in this regulation. The current complaint form, for example, advises that “As required by applicable privacy law, there will be no public reference to persons identified in the complaint pending Board investigation and action.” No such rule here.
The rule adds that “the complaint is not public until the Board takes a disciplinary action or imposes sanctions.” Not a word here.
It also says that “If the complaint is dismissed, it will continue to be identified by case number only.” Again, not here.
That’s a mistake. Current Board members may not know that the rule came from the original disciplinary cases. Back then, inspectors names appeared in the KBHI minutes before they even knew there was a complaint – and often with a disposition of the complaint. The present rule was adopted to address real problems.
Timely Filing. Current rules say that “It is the policy of the Board not to accept complaints on issues that occurred more than twelve (12) months prior to the date of filing unless some extenuating circumstance can be shown for the delay.” That’s missing in this regulation too. Everyone would have to guess that means it’s gone.
That would be both a mistake and an invitation to abuse.
The 12-month filing rule was sound and well-reasoned when it was adopted. It also coordinates with the statute of limitations for lawsuits against home inspectors. KRS 413.246.
It’s hard enough for a home inspector doing hundreds of inspections a year to remember the details of one home a year ago.
No Coordination. A persistent problem in licensee disciplinary cases has been what to do about complaints where there also is a lawsuit in the works or a 411 claim being resolved or an arbitration clause in the inspection contract.
In the past, people tried to use the complaint process as “discovery” in litigation, to get information or create evidence they were not entitled to in court. Some tried to use complaints to intimidate or retaliate against inspectors. More than one did so well over a year after the home inspection.
If Board precedents were followed, then the best reading of past cases is that the Board will not hear a complaint when litigation is pending. As to claims under KRS 411.270 to 411.282, the best reading is the same. The Board has not taken up complaints while a 411 notice was being handled by the parties. Coordinating contractual arbitration requirements with Board complaints has not been thoughtfully addressed by the Board, but certainly should be – for everyone’s sake. On the other hand, the Board has been only loosely bound by its own precedents and, truthfully, has no real record of many of them. It has shown a distinct preference for making up those rules on the spur of the moment.
Instead of figuring out the best answers, the Board simply ignores it in this proposed regulation. Once again, to hazard a guess, that means the KBHI just plans to make up the rules as it bumps along. But an ounce of prevention is worth a pound of cure.
Misleading Title.
Notice the regulation also is mis-named. It’s called “complaint procedure” but it is not for all complaints. It’s all about complaints of “misconduct by a home inspector” (or a “licensee”). Examples include: Subsections 1(3) and (5); 3(3); 4(2) and (3); 5(2)(b) and (3)(a), (b); 6(1) and (2).
It completely ignores one of the Board’s most important missions, and a prime reason for its existence – complaints against persons doing home inspections without a license, or advertising or claiming to do home inspections without a license.
In contrast, the current Complaint form (KBHI - Comp 1) applies both to complaints against unlicensed “wannabes” and licensees.
This regulation is not about all complaints, just a fraction of them, despite its title. Pointedly, it is about that fraction that most often has resulted in dismissals.
Complaints against unlicensed individuals are far more serious, far greater danger to the public, and have ended in enforcement actions far more often. For some reason, though, this regulation really is just for chasing home inspectors, instead of going after unlicensed people claiming to be home inspectors or handling the clearly important complaints involving them.
This is particularly striking given the Board’s unbroken history of failure taking any unlicensed home inspector off the streets since the day it was born. If any area of complaints needed work, surely it was the procedure to accomplish one of the Board’s basic purposes.
Ignoring the major threat to the public – unlicensed, unskilled “home inspectors” – while going after the very people who are complying with the licensing law instead, gets very close to dereliction of duty by the Board.
That said, it’s all about complaints, of course. So the first question is:
What’s a “complaint” against a home inspector? A complaint is “a written allegation of misconduct by a home inspector”...
OR
– “other allegation of a violation of:
(1) “KRS Chapter 198B” – which is the whole Department of Housing, Buildings and Constructions (DHBC) chapter of statutes -- including the Board of Housing Buildings and Construction, Elevator Contractor laws, the state building coded, and even safety glass labeling requirements;
OR
(2) “the requirements established in 815 KAR Chapter 6" – which is the entire manual of regulations for DHBC;
OR
(3) “or another state or federal statute or regulation applicable to home inspectors.” Sec. 1(3).
Seriously.
What’s “misconduct?” Whatever the Board says?
If so, our licensing statutes do not agree. Our statutes say disciplinary action and sanctions is only for “failing to comply with any provision of KRS 198B.700 to 738" or the regulations under those laws. Why the regulation does not say the same thing is unfathomable. But who wants to go to court to make the Board follow the law when it is supposed to be applying the law in the first place? That’s upside down. If the Board is going to enforce the law, it should be the model citizen following the law. Maybe one day.
Most licensing boards work hard to limit complaints exclusively to the area they regulate, and the express authority the legislature gave them. This proposed regulation does the opposite.
Though the definition suggests complaints do not have to be written or notarized, another section says it does. Sec. 2(2).
Most complaint procedures for real estate professionals, such as KREC’s, also require the complainant show some damages and their amounts. This should too. No showing of any damages would be required under this reg.
That opens the door to complaints that are nothing but arguments, with no injury or damages to complain about. The universal rule is the opposite: No harm, no foul. But how would the KBHI know what other states do? It never asked. It never even called KREC. Why? Carnack the Magnificent (you know, Johnny Carson's famed mind reader).
So, if this goes through, a “complaint” can be about practically anything – whether or not any damages were caused. And it can be made by anyone.
Complaints here could make practically any claim known to man – under any state or federal law, regardless of whether the KBHI has any authority to interpret or apply any of those laws or regulations – against any home inspector, any time, for any reason. Well, maybe not for a jaywalking bust when the inspector was nine years old. Oops. The Board can just say that should have been disclosed or was not disclosed the way they want. Presto! “Complaint.”
The truth is, the Board has no such powers in the first place.
KRS 198B.706(4) and 728 are very clear about the KBHI’s limits. The board “shall take disciplinary actions” or “impose sanctions” solely for “failing to comply with any provision of KRS 198B.700 to KRS 198B.738" or “any administrative regulation promulgated to carry out” those statutes.
The current rules, since licensing began, followed those statutes.
There are a number of other details at this first step stage.
Inspectors get 20 days after receiving a complaint to file a written response (though no form apparently is provided). That’s no change. But then the complainant gets 10 days to reply to the inspector’s response. There’s no requirement that the inspector get a copy! The “Compliance Committee” “may” request an additional response from the home inspector – but it does not have to, even if “additional issues” are raised. Sec. 3(3). It can also consider “other relevant material available,” whatever that might be, without telling the inspector. Sec. 4(1)(a). Under 13B “hearsay” prohibitions and the rules of evidence apply; not here. Another example: The complaint form (“KBHI 5") apparently was not submitted to the Legislative Review Commission with the proposed regulation, though it is incorporated by reference. Sec. 7(1). Who knows what bugs it might contain.
The bigger picture is plain enough, though.
It helps neither the public, nor licensed home inspectors, nor allied real estate professionals to invite complaints or investigate stuff where the Board has no power or authority to take any disciplinary action. Humility is the better part of valor. And administrative efficency.
This proposed “anything goes” idea is not just an invitation to trouble. It’s a huge waste of everyone’s time and resources.
Next comes a so-called “informal proceeding” – created to evade hearings and due process rules imposed by KRS 13B.
The definition of “informal proceeding” is “a proceeding instituted” – by whom, you might ask – “during the disciplinary process with the intent of reaching a disposition of a matter without further recourse to formal disciplinary procedures under KRS Chapter 13B.” Sec. 1(6).
The problem? This is all secret, shady stuff. No one – not the complainant, not you, no one – necessarily knows everything that this “Compliance Committee” is considering. There’s no hearing officer, no due process rights, not even a right to appear and talk to the “Compliance Committee.” Worse, it’s made up of Board members who will turn around and vote on their own report! That’s jury and judge, for you.
That’s why KRS 198B.730(1) installed a blunt rule: “The procedures set forth in KRS Chapter 13B shall govern the board’s conduct of disciplinary hearings.”
The purpose, pretty plainly, is to let the Board make up “rules” as it goes along to “settle” complaints. Sec. 6. In Board discussions, this has boiled down to the view it could get licensees to agree (or “contract to”) penalties the Board itself has no power to impose, such as a fine.
In fact, in every 13B disciplinary hearing process, there always are discussions about settling the issues. Nobody wants to go the whole nine yards if everyone can be satisfied earlier.
Dreaming up this “informal proceeding” process does not change chances for settlement talks. It just tilts the playing field. The “informal proceeding” exists primarily to strip the parties – the inspector and the complainer – of rights and protections guaranteed by 13B and by the KBHI statute. A fair process guarantees a fair proceeding, not a loaded one.
The only real advantage to this is that the Board can strong-arm an inspector. It could say he has no right to see the evidence, as he would in a 13B hearing, for example. It could say he has no right to an attorney, or to submit evidence, or to question witnesses, as he also would under 13B. It could say no one has a right to an impartial hearing officer, as everyone would under 13B.
In fact, it could pretty much say neither the inspector nor the complainer have any rights at all, except whatever the “Committee” says.
What’s missing in the new regulation – such as punishments tied to offenses, what rules apply to a “formal investigation,” and such – may be even more disturbing.
Revoking a license is a serious thing.
Revoking a license should be considered a death sentence for a licensee, not a club for paltry “misconduct.” You would not know that from reading this.
CE
Proposed 815 KAR 6:050
CE courses from 4 or 5 providers are exempted from Board “review or approval” -- and from any KBHI sanctions. It’s not clear exactly how many providers. It's an unlimited number of courses, dogs, doozies, or just plain dumb. Sec. 1(2).
It applies whether or not they're out of state sellers, or so-called "distance" providers (remember "mail order degrees and "diploma mills"?).
So whether a course is garbage or gold, the KBHI will automatically let them take your money and treat you however they want.
The new provider "disciplinary" rule only covers suspending or revoking "approval" of any CE providers. Sec. 5(1). So "unapproved" sellers go scot free from KBHI discipline. That means a seller can lie to you, cheat you out of money, and teach such misinformation you get sued (for example), and the KBHI will have tied its own hands. Handy.
You can bet that “anything goes” version of quality control will speedily elevate respect for home inspectors and guarantee excellence for your CE cash. On second thought, don’t bet on that.
The purpose of CE, of course, was to help improve service to the public with basic standards. Exempting CE courses from any standards, and any review or approval, does exactly the opposite. That’s where “basket-weaving” college courses came from – and got ridiculed. You can bet the public, and brokers and agents, will catch on.
If it’s right to skip Board “review or approval” for some, why not for all? If that’s wrong, then why pretend otherwise?
This change is exactly the opposite of the strict standards enforced by the older, far more respected Kentucky Real Estate Commission (KREC) for the brokers and agents that home inspectors often work with.
If this passes, home inspectors will have to watch out for “unreviewed, unapproved” courses and providers -- for the first time. The KBHI never let them in the door before. Now they can take money and deliver poopey. Rule 1 will be -- never give them money in advance. Remember Decker College? Students are still chasing tuition money they paid – to that Kentucky regulated educator – and then lost when Decker disappeared.
“Pre-approval” for CE becomes optional. Subsequent approval of CE courses is allowed. Sec. 6, 2(1).
This is quicksand filled with land mines. It will allow people to market CE courses without approval and, apparently, without saying so.
There will be no real downside, apparently, either. Again, KBHI seller "discipline" applies only to seller "approvals." Sec. 5.
How’s a home inspector with a month or two left on his license supposed to know? Then what? Ooops, sorry, no CE approval? Tough luck?
From the beginning, all CE courses sold to home inspectors had to be approved in advance. The benefits are obvious.
The benefits of this change are not.
Whoever thought something was broken that this regulation fixes ought to take some continuing education in educational standards and achievement.
There are, of course, no certified teachers or educators on the KBHI. But there were officers and directors of one educational provider.
For them the hidden agenda in these changes was simplicity itself. Regulation, approvals, course reviews, checking instructions, and provider “disciplinary” actions were good for that provider’s competitors, but not for them. That way, they got to make trouble for competing providers but not even have to file the first piece of paper for themselves. They also got to see what competitors were up to ahead of time. They even got to hassle students of other competitors, for CE approvals that did not apply to themselves. If you’re an unprofessional provider with no payroll or full-time staff, heck, you need every advantage you can get.
The provider who had officers and directors voting on this regulation was KREIA, the same group that was dissolved by the state for failing to do its routine corporate paperwork. KREIA holds the record for regulations broken and deadlines missed at the KBHI, among all providers in the history of the Board. KREIA leaders sitting on the KBHI likewise hold the record for ethics rules and statutes breached, among all KBHI members in the Board’s history.
The easy way around that was just ditch the rules. You can’t be caught breaking regulations that don’t apply, right?
Now that’s public protection.
For any CE provider who keeps getting tripped up in the rules, the solution is to shape up, not try to reshape the rules.
Whatever the rules are, the most fundamental requirement is that they should be the same for everyone. It’s not just basic fairness. It’s also that clients, other professionals like agents, and home inspectors all should be able to count on some basic, minimum level of quality in continuing education. Or, why bother?
January 2011 News
RESOLUTION 1:
Grow Even As Home Sales Shrink
“Developer May Take Car, Truck or Boat as Down Payment for Your Home,” headlined the ad in The Courier-Journal HomeFinder (carbon copied into the website) January 2, 2011.
“Below Market Rates” advertised another builder in the same paper.
Both ads showed up in probably the skinniest Real Estate classified section we can remember.
2010 was one of the toughest home sales markets in the history of home inspecting.
They’re Not Selling ‘Em Like They Use To
Louisville home sales plunged more than 25% in the last five months of 2010 compared to this time last year, the Greater Louisville Association of Realtors says. (C-J 01022011D2)
Lexington probably was a little worse, dropping around 34%, based on numbers for September, 2010 sales.
State-wide numbers were closer to Louisville. Homes sales were down 24.9% across the state, using Kentucky Association of Realtors (KAR) latest report, for September, 2010.
Statewide, 2,617 homes were sold in September, 2010, down 24.97% from the 3,488 sold in September, 2009.
These numbers were in line with PLI’s forecasts in the planning issue. We can fine tune them now. This is not a bad place to start building your 2011 business plan. And now, during the usual January slowdown, is a good time to update all our business plans.
Total Inspections
Figure on an average 3,050 homes sold per month for 2011 throughout Kentucky.
Call it 36,600 for the year. That’s low, compared to last year and the years before. But it’s probably a safe estimate.
Imagine only half of those sales have buyers smart enough to get a home inspection. That’s around the national average two years ago.
That would be 18,300 homes to inspect for 2011 in all of Kentucky. That’s probably the low side, state-wide. In some areas, like Northern Kentucky, inspectors estimate more like two-thirds of homes sold get inspected (going on what we hear from hundreds of inspectors each year in PLI seminars).
Divide that 18,300 home sales by Kentucky’s maybe 370 licensed inspectors. You end up with about 50 inspections per inspector, on average.
You can’t live on that.
It drives you to the conclusion that quite a few licensees do not, in fact, live on home inspecting. A total of 243 one-time inspectors dropped their licenses by the time the Kentucky Board of Home Inspectors (KBHI) ended 2010. A bunch of them probably were part-timers. Many would like to make the work full-time. They’re just working on how.
Doing more than that 50? You’re beating the average. You’re among The Proud. The Few. So build that business. Long-term, the ones that weather 2011 will eat up 2013.
Now you know why our last Newsletter suggested using this slowdown to work up the best marketing.
Inspectors, plain and simple, have to reach more buyers. The KBHI should help, obviously. In other licensing states, and at the federal government, it’s considered an important consumer protection to encourage home inspections. So they have tens of thousands of brochures on the protections of a home inspection, spread out in real estate agent offices, mortgage banker and broker offices, and more. For some reasons, that has not dawned on the KBHI. Instead, with its inspector license fees idly collecting dust, about $225,000 has been scooped out of the KBHI’s hands in the last two years. Some serious public service from the KBHI would be welcome, but we’ve been waiting.
Business growth overall has to come from the uninspected homes and from prices. A few will grow picking up the pieces of others who leave.
Success, and in some cases, survival, will come from marketing in 2011, more than ever before. To do marketing well – here we go again – you need to do a business plan and a buget.
Begin by narrowing the home sales numbers to your market.
To localize home sales in your area, use these numbers. Homes sales are divided up in the only reliable way we have. That’s using KAR home sales reports. They split into six regions. Each region approximates the size of the local pie inspectors there will split up.
Region One (Western, Paducah, Ownesboro, Henderson, Hopkinsville, etc.) is around 11.5% (302 of 2,617 for September, 2010) of Kentucky sales.
Region 2 (South Central, from E-town to Russellville to Shelbyville) has about 16.7% of sales (438 of 2,617).
Region 3 is Greater Louisville, with 31.5%, or 826 of 2,617.
Region 4 is Lexington Metro, at 17.7% (465/2,617).
Region 5 is northern Kentucky with around 13.8% (363/2,617).
Region 6 is the southeast (Cumberland Valley to Ashland to Somerset) with about 8.5% of recent Kentucky home sales, or 223/2,617. (There are even narrower breakdowns in the KAR reports, but local associations don’t copy home inspector service areas very closely.)
Annualized, that means planning for something like:
Region 1 sales = 2,105 (11.5% of 18,300) home inspections for 2011. Remember, that’s at an arbitrary 50% of total home sales, so there’s plenty of room for improvement!
Region 2 sales = 3,056 inspections for 2011.
Louisville, or Region3 = about 5,765 home inspections for 2011.
Region 4, Lexington, works out to 3,239 home inspections.
Northern Kentucky, Region 5 should be about 2,525 inspections.
Region 6, always the short end of the stick, works out to around barely 1,555 inspections for 2011.
Every region also has a piece of the border, so there’s a little crossover inspecting available to add in too. Northern Kentucky has more puddle jumping than the other reasons, because Ohio has no licensing.
There were some bright spots in 2010. Real estate always is local. National and state numbers work for investors, banks and Washington bigwigs. But for home inspectors, it’s not national, it’s all local.
The Elizabethtown area, for example, was up 1.7% for September, compared to 2009. Development around Fort Knox as the base grows is a big driver.
Paducah, the market that always seems to surprise, was up 4.69% for September.
The standout exception, percentage-wise, was the Madisonville-Hopkinds area, up 21.43%, and Kentucky-Barkley Lakes region, up 20%, in September. Both are low volume regions, so bigger percentage gains come easier off small numbers. Sales for September, 2010 in Madisonville-Hopkins totaled 34 homes, compared to 28 for 2009. The Lakes area had 24 home sales in September, 2010 (through September), compared to 20 through the same date a year ago.
Paducah, on the other had, had 67 homes sell in September this year, compared to 64 same time last year.
Louisville home sales were 826 in September, 2010,. compared to 1160 for September, 2009. Lexington 465 for September, 2010, way down from 711 for the same month last year. Northern Kentucky sold 393 homes this September, down 16.5% from 435 for the same month last year.
The median price for homes sold across the state rose a hair to $110,000 in September, 2010, from $108,250 for the same month last year.
Eds. Note: September counts are used for several reasons. Full-year stats were not out when this was published, and those numbers usually get revised later anyway. December is not a typical month; it’s part of the low cycle in this business. And tax incentives, federal, through October, and state, through December, artificially influenced 2010 numbers, pulling future sales forward in time. September was the only close to normal, unstimulated, pre-low-cycle month.
Part II – Next Newsletter
Only the Strong, Not the Cheap, Survive
GADGET GOODIES
Now is the time to pick up the Geek Goodies you put off all last year. Late January through February is tech sale season. That’s the time stores clear shelves of “last year’s” everything – from cameras to computers. And scavengers like us go bargain shopping.
Professional Learning Institute’s New Year review is your shortcut to all the testing of 2010 and classroom feedback from inspectors.
Digital Cameras
The Canon PowerShot SX20 IS tops 2010's list of compact digital cameras with serious zoom (socalled “megazoon”). For openers, there’s the big-league 20X optical zoom lens. Anything over 12X optical zoom works for chimney and vents, and can shoot nail heads on most roofs from the ground. There’s a flip-out LCD, so you can shoot around corners and over junk in limited access crawls or attics. We’d like to have a view-finder too, but that’s rare now. It uses four AA batteries you can replace at the corner drug store. Four fresh batteries is plenty for 500 pictures. The built-in flash is above average. Its ISO equivalency settings go up to 3200, exceptional help for low light pictures. Response time was good, too. We’re not fans of waiting for the shutter to shoot. There’s almost too much – like a set of exposure options from full auto, aperture priority , and program mode to over a dozen scene modes. There’s even 720p HD video, with an HDMI port. We don’t favor megapixels, but, for the record, it’s a 12.1 MP sensor. The more MPs in a report, the bigger the file when it’s emailed, and the likelier it is to get swatted by server firewalls, not to mention sucking space on your computer. $400 list; $369 street. Consumer Reports rated it “Recommended” and pcworld gave it 4.5 of 5 stars (“Superior”).
Second place was a “photo-finish” between the Nikon Coolpix P100 (26X optical zoom, $400 list, $288 from B&H at 1/5) and the Olympus SP-600UZ (15X optical zoom and a Consumer Reports “Best Buy” at $200 list, $169 at B&H). You can buy basically the same Nikon, with a smaller 15X zoom, at $260 list, by going to the Nikon Coolpix L110 (Consumer Reports rated both Nikons “Recommended”). The problem with the Nikons is Nikon’s expensive proprietary batteries, Li-on EN-EL5s. No matter how hot a camera is, it’s worthless if it’s dead. We’ve used rechargeable off-the-shelf AAs forever. Even though we carry three sets (12) in the bag, being able to make a quick stop at the drug store or gas station for replacements has come in handy. Beats a return trip to the office to recharge, or pick up Nikon batteries (in their own proprietary charger). The Olympus uses 4 AA batteries. The LCD screen is a little bigger, 3 inches, for the Nikons. All three are about as good for low light photos and flash photos, though the Olympus trails a bit. The best ISO for the Olympus is 1600, half the Canon or the Nikons. That will cost you at night. Sensor sizes are the same, around 1/2.3. The P100 is a more manageable 10 MP; the other two are 12 MP. The P100 also had the best response time.
For user reviews, check out the comments at B&H and Tristate.
TECH TIPS
Digital Cameras
The biggest news in digital cameras coming out of the Consumer Electronics Show, the industry’s annual curtain raiser, is bigger sensors – at last. Sensor size is way more important to performance and picture quality than the hype about megapixels. Look for PLI’s review in an upcoming issue!
Cell phones
The good news is some phones are actually getting “smart,” and a few are starting to get fast. The bad news is that’s enough like a computer, and connected enough, to open the door to hackers. And who’s got antivirus software on their cellphone, like your computer? A number of downloadable apps, even in maker stores, recently turned out to include malicious code or invasive surveillance. Among the worst that’s bleeding consumers is “cramming” hacks. Remember “900 number” calls, that would put sneaky charges on your phone bill? Say hello to cellphone cramming.
Cramming. Hackers have found a happy hunting ground of cell phone charges. In 2010, complaints about small unknown charges on phone bills grew spectacularly. They’re easy to miss and a hassle to fix.
Notify your carrier to install a “cramming block.” It prevents third-party charges. It’s also free.
Printers
Tired of paying a fortune for printer cartridges and aging while you wait for it to print? For years, printers were the ‘same ol’ same ol’” inkjet or laser. Selling printers was the “give ‘em the razor, sell ‘em blades” Gillette model: Sell cheap printers, make money on ink.
A change is in the works at last. Watch for “Memjet” printers. The first Memjet printers are being sold by Lenovo abroad now. It’s a simple idea. Instead of sliding a small print head back and forth across a page, Memjets use an 8.5 inch page-sized print bar. It prints the whole line at once and just rolls paper through. (The name comes from “micro-electro-mechanical systems,” of MEMS technology, used for super precise, small devices.) The result? A color page in just one second. Plus a fraction of the cost in ink. Ink for the first Memjets costs about 5 centers per page, compared with 12 cents to 25 cents per page for laster toner or inkjets. Shown at the Consumer Electronics Show last week, a Memjet printer easily turned out a color page per second, with print quality as good as top office injets. They won’t be in an Office Depot near you tomorrow, but keep you eyes peeled.
Heads Up, Inspectors
“Building Analyst Certification” is available – and subsidized – for maybe another month or two.
It’s not a bad idea when things are slow in the first quarter.
Nobody asked the Kentucky Board of Home Inspectors (KBHI) about exactly what a “building analyst” might be. Natch. Why bother?
Consider bundling a “Comprehensive Home Energy Audit (CHEA) summary” as a service option in your contracts. They’ll be catching on.
For more info, go to http://kyhomeperformance.org. You can load the contract, and certification rules, while you’re plugging in for the $1,000 subsidy. Counrtesy of Uncle Frankfort, unknown to Cousin KBHI.
Tricky New KBHI BILL
CAN'T COUNT
A squirrely new bill, proposed by the Kentucky Board of Homes Inspectors (KBHI), for the legislature’s current special session has been turned in.
The measure was presented to a Senate Licensing, Occupations & Regulations member last week under the title “Amendments for Moving KBHI.”
It does way more than that.
Here are some highlights:
In a departure from normal, it tucks in changes that are not underlined or indicated in the text. Maybe it’s by accident, but, at best, it’s sloppy, like most of the rest of the bill draft.
For example, it changes the definition of “home inspection report” to mean “a written report, evaluation or summary of deficiencies ....” But that change is not signaled by underlining, as is usual, or otherwise flagged for the legislature to see.
This is no small change. Who knows how far “evaluation” or “summary of deficiencies” could reach? It is not much of a stretch to say it would be easy to apply that to remodelers, for example. How about engineers? What about the building analysis report from the new “Kentucky Home Performance” operation at the Kentucky Housing Corporation?
The KBHI probably believed the change would help it stop unlicensed inspectors, who have been calling their reports anything but a “home inspection report.” The unlicensed are fond of trying to dodge the bullet by calling their reports a “building analysis” or “home evaluation” or “summary of deficiencies.” But this is the wrong answer.
No licensing board has to lift every alternative or unscrupulous name for the practice it licenses. No one can keep up with all the ingenious new names unlicensed “wannabes” can dream up. If it walks like a duck and quacks like a duck, it is a duck. If they say a home inspection report by another name is not a licensed activity, let the courts decide.
It changes the membership of the KBHI. But somewhere, it lost count. The bill says the KBHI “shall be composed of ten (10) members.” KRS 198B.704(2).
Then it lists them. Count along:
It says there will be six (6) home inspectors. Plus two (2) home builders. Plus one (1) realtor. Plus one (1) manufactured housing rep. Plus one (1) member of the public at large.
You can do this on one hand: 6 + 2 + 1 + 1 + 1 = ten (10)? Dis you say 10? Or eleven (11)?
Did we mention sloppy?
It deletes all reference to any ethics, again without any signal in the bill draft to indicate the change.
Current KRS 198B.704(19) requires “automatic removal” of a KBHI member who “fails to adhere to a duly adopted code of ethics of the board.” That’s gone. But legislators could not see that from the draft. It is not crossed out, as is usual. It’s just evaporated, MIA, gone.
It deletes the present statutory limit on KBHI disciplinary powers – again, without a flag, a signal, or any “heads up.”
Present law says the KBHI can “deny, suspend, place on probation, require additional continuing education and revoke” home inspector licenses – “for violations of KRS 198B.700 to 198B.738.” The first part, about denying and suspending, is still there. But the second part, “for violations” of the licensing law disappeared – again, without any indication in the bill.
This is a major, substantial change.
Does the Board really want the General Assembly to change our licensing law to allow suspending or “permanently revoking” (also a new phrase) licenses for supposed violations of any law, state or federal? Without the bill even saying that’s what it’s doing?
It sets up a new and secret punishment called a “private admonition.” This is a totally new idea at the Department of Housing, Buildings and Construction (DHBC).
DHBC has adhered to the principle that if a wrong was important enough to discipline somebody, it was important enough to be public. There are no “private” admonitions, or punishments of any kind, for DHBC licenses.
KBHI - AN "INDEPENDENT AGENCY"?
The main thrust of the draft bill is to make the KBHI an "independent agency" and move it out of the Department of Housing, Buildings and Construction (DHBC).
Why?
The KBHI gives only one reason for wanting the change. It blames DHBC for "sweeping" the cash it left sitting around untouched for years. If it's not in DHBC, and it's an "independent agency," DHBC could not swipe its money again.
Every home inspector we know is unhappy that $124,000 of our hard-earned money was taken to balance the state budget in 2010 -- and another $100,000 was "swept" in 2008. That's for sure.
But the KBHI has only itself to blame.
There would have been no money to take, in 2008 or 2010, if the KBHI had been getting its job done. That's what it was supposed to do. Our money was never supposed to just sit there. Money would not have been there for DHBC to take in the first place, if the KBHI had put it to work.
But the KBHI never spent anything for consumer protection or public information. It never printed a brochure about the need for home inspections. It never put an ad on TV or radio to explain the protection of a home inspection. It never even distributed the HUD brochure by nearly the same title: "For Your Protection: Get a Home Inspection." It never set up seminars for first-time home buyers or mortgage bankers and brokers. It never met with other boards and commissioners, like the real estate commission, to co-promote a pamphlet, or a booth at home shows. It never campaigned to get home inspectors on talk shows to explain the importance of home inspections -- in the middle of the worst housing crisis in American history.
When the state ran short of cash and looked for idle cash sitting around state agencies, the KBHI six-digit bank account was a sitting duck. DHBC did as it was ordered to do. Its accountants totaled up what KBHI actually spent in the year before, left that (for it to keep up what it obviously decided it needed to do), and took the rest. Most DHBC boards and panels were running in the red those years. They had honest jobs and work to do. But not KBHI. It was always in the black, doing nothing.
To be crystal clear about this, there was no surprise here. None. The KBHI was warned repeatedly -- in public, at its meetings -- months and months before its cash was swept. Just in case KBHI members were not reading the newspaper. Everyone knew that the Governor and the legislature would grab all the idle cash. And still the KBHI resolutely did nothing. So, guess what, just as warned, each time, in 2008 and 2010, the KBHI's money, that was doing nothing but collecting dust, got taken.
The real question is not how to insulate the KBHI against "sweeps," it's why it did not do what it was supposed to do with its money. It just may be that it takes almost a quarter million dollars of our money swept away for the KBHI to wake up and get motivated to do its job.
So if the KBHI is serious about avoiding "sweeps" and losing our money, again in the next sweep, there is a simple, straightforward way. Just put the money to work, now, on the public purposes intended. That means consumer protection, public information campaigns, and court action to take unlicensed inspectors off the streets. It does not matter where you are in state government if you either cannot or will not do your job.
If the KBHI still is unable or unwilling to get its money to work, then it should just cut down license fees. Promptly. Cut the $250 annual license fee. It never was intended as a giveaway or a sneaky tax on home buyers. There was an excuse for the $250 five years ago. The new KBHI did not know what it would spend. Now we know.
Practically every dime of the KBHI's revenue comes from home inspector license fees (the small remainder is from educational providers -- that home inspectors pay for services). Consequently, all KBHI revenue in the end derives from the public that pays us. It was that same public that was meant to get the benefit of license fees passed on to clients by inspectors. Instead, the public has been shortchanged and home inspectors have been chiseled.
If the KBHI cannot put our money to work, it should get its hands out of our pockets. We should keep it. Slash the license fees.
Let's forget keeping inspector cash in the bank as a reason worth moving the KBHI out of DHBC.
It's a good reason for the KBHI to get to work.
Let's also remember there were some seriously fine things about our Board's relationship with DHBC. Likewise, their also were some constructive contributions from the Public Protection Cabinet (DHBC is part of the Public Protection Cabinet; so is the KBHI).
For example, when the KBHI met at DHBC, it had Terry Slade, DHBC's Director of Enforcement, at every meeting. He knew what he was talking about. He knew building construction standards cold. He also had decades of licensing in the home building arena under his belt. Not least, he knew state law and was scrupulous in following it. Brother, is he missed!
Still, if the KBHI stayed with DHBC, it would have access to the same type. It sorely needs skills like that, at that level. Even if it has to spend a buck to make sure it gets them.
There's nobody at the Office of Occupations and Professions (OOP) who can take Slade's place, not even close. OOP's strength is managing paperwork, running what amounts to an "office sharing" deal. They are just fine at making sure there's a conference room when the KBHI meets, and somebody answers the phone and handles the mail, the paperwork, and the KBHI expense checks. But telling a muntin from a mullion is not on the list of their strengths. They're not housing and construction people or real estate pros, they're office administrators. There are capable administrators there, but no home mechanics or builders.
That administrative backing is important, and it has a place. But it's not enough to get the KBHI working. DHBC can help with that in ways OOP cannot.
From DHBC's side, though, the minuses outweigh the plusses. The KBHI chews up gobs of DHBC staff time and resources. All the other boards, panels and committees at DHBC have meetings that last maybe a half hour, or an hour, wrap their work up and move on. KBHI meetings are more like all day. It practically never wraps up anything. It was meant to meet quarterly but it's determined to meet monthly -- and more (members gets paid by the day).
There are some plusses, of course. The KBHI can pay DHBC for the services it consumes now. It wasn't allowed to, by law, from 2005 through July, 2008. That start did not help the relationship between DHBC and KBHI at the beginning, but it's over. The law was amended in 2008.
Totaling up the score on that track record, in the end, DHBC can be expected to support any bill that would move the KBHI out.
Some at DHBC think putting the KBHI under the Kentucky Real Estate Commission (KREC) is the logical thing to do. They also think it might at least satisfy everybody's immediate goals too. It would bounce the KBHI out of the DHBC. KREC's an "independent agency." So the KBHI would have its shelter against sweeps. That's the KBHI's announced goal. And KREC not only does not get swept, since it's an "independent agency," it also has managed its affairs well enough that it has a comfortable budget balance. It knows how to spend its money productively on public information, seminars, and publications. It also has efficient, dedicated staff who know real estate like the back of their hand.
But who knows if KREC wants this puppy, or would give it a home? There was talk of putting the KBHI under KREC back when the original licensing law was passed. KREC showed no enthusiasm for that idea then. Unfortunately, the KBHI never even asked. But it might be worth a shot.
Whatever the chances of shifting the KBHI to KREC, if the KBHI leaders pursue this "independent agency" idea, it would avoid at least one critical problem.
Along with hanging on to its own money, being an "independent agency" also creates a risk that other state agencies do not have.
An independent agency can commit bankruptcy. State agencies cannot.
If KBHI were an independent agency today, it would have less than $20,000 in its bank account, and be almost two years away from its next income stream/license renewal cycle, in 2012. It would have barely a trickle of cash from new licenses. It has had a net loss of licensees for over a year, in part due to its underwhelming performance, so it's renewal cycle in 2012 is likely to be the smallest ever. It pays about $40,000 a year just for its office, and pays in the vicinity of $18,000 for its members reimbursements, per diems, perks and other outlays. To this day, it never even has had a Board adopted budget.
"Independent agencies" get no funding from the state. That's one reason why they get to hold on to their own money. If the KBHI were an "independent agency" by itself -- outside KREC and DHBC -- it's not the least bit certain that it would not get into more trouble.
A KBHI bankruptcy -- however the remote the odds are --- would be a monster embarrassment. No one wants to go there.
Finally, there may be an ulterior motive in the KBHI's pursuit of "independent agency" status too. At least two KBHI members are doing everything they can to wiggle around the state's ethics rules. Self-serving actions, conflicts, and prohibited gifts have been a persistent problem for home inspector members since early 2009. The KBHI repealed its own code of ethics a little over a year ago, after several members violated it. Now it wants to repeal the ethics rules in KRS 198B.704(19) too, it seems, as part of this bill.
The reasoning in support of independence for this Board is far from obvious, or hands down.
Nevertheless, if there were clear ethics requirements and discipline rules in place, much as there are at KREC, the main downsides to converting the KBHI into an independent state agency probably would be mitigated enough to make it tolerable.
That's far from crystal clear, but not impossible. There are ways it might work. Just probably not this way.
Money
The National Association of Unclaimed Property Administrator say 1 out of 8 people have money waiting for them to claim. Most unclaimed assets – forgotten bank accounts, utility bill deposits, you name it – are turned over to states. But states hold them only a certain number of years. Check at www.unclaimed.org.
www.FastWeb.com has become a (free) leader in finding college scholarship dough for the kids. If you’re there, look. Or get the kids to check it out!
End gift card headache, and get cash or a discounted card, at either www.PlasticJungle.com or www.SwapaGift.com. Sell that unwanted gift card for cash – before it “expires” and the store sucks up the dough. Or buy an unwanted card at a discount. Handy. Remember you can gift yourself. Every Christmas, one of our favorite restaurants promots gift cards. But $100 worth and get a $25 gift card free. We’re in. We eat there lots, for business and pleasure. At 25% off menu prices.
Watch credit card deals too. The new federal rules will produce a shower of offers, most of which will just be trying to hike fees. But some underdog cards are trying to stand out from all the Visa/MC price hikes and flim flam. Underdog cards are offering up to 5% credits for every purchase, including groceries (like American Express Blue Cash), or cash back on every purchase (like Discover). Be careful about hidden fees, of course, but take what you can get.
The Thank You Network, at www.thankyou.com. is a little new, but its “here’s a cherry on top” plan seems promising. You earn points on the network for what you spend, using their credit cards (like Citibank) and sellers (like Expedia). Those points can buy everything from office equipment to an iPod and, you guessed it, $100 gift cards to retailers like Home Depot or Barnes & Noble.
There are billions of dollars in housing grants, including home renovations, first-time home buyers, and folks with impaired credit, just for starters. To start looking it over, begin with www.hud.gov. (HUD does not offer direct grants. It sets up local programs with many agencies.)
Web Apps
Credit Charges by Phone.
The best reason to buy a hot new smartphone may be the idea from https://squareup.com. You can swipe a credit card anywhere, on a mobile phone, with its gear. Sign-up is free right now. The company just raised $27.5 in a new round of financing, so it's here to stay. It offers a small credit card reader that plugs into most smartphones. Works for iPhones 3G and 4, and for most Android phones, like the HTC Nexus and Evo, LG Allay, Motorola Droid, and Samsung Galaxy.
Mental aerobics.
Skip the Wii and the X boxes. Shot ‘em ups get tired fast. Flip to www.Riddler.com. Play IQ Trivia, Wheel of Fortune, card games, even cyber darts.
Meth labs?
Check www.justice.gov/dea/seizures/ky.pdf.
Pick a state, then scroll to county, city and street address. Date included.
INSURANCE
Here’s New Year insurance checklist for working home inspectors.
First, remember that homeowner’s insurance does not normally cover a home office or business property.
Second, you know, homeowners does not cover floods. And you know – global warming and all that – the oceans are rising, Manhattan will be underwater (at last) in a year or two, etc. Not to mention the chincey local government or sewer district that’s short on cash, and maintenance, letting your storm water back up indoors.
Last, consider “off-premises theft.” It used to be standard for homeowner policies to cover theft of personal property even when stuff was stolen away from home. Today, that coverage is uncommon. Things stolen from cars and trucks generally are not covered by auto insurance either.
Solving all three hassles is fairly easy and inexpensive. An off-premises theft endorsement can be added to most homeowner policies for around $20-$30 a year, for example.
Complaints & Discipline
Proposed 815 KAR 6:060
The proposed new Complaint procedure regulation is a top-to-bottom rewrite. A full disciplinary statute (as applies to KREC, for example) or a rational regulation has been long overdue.
The good news is that the KBHI at least tried, finally. The bad news is that the regulation is such a thorough mess that they – and the public and all home inspectors – would be better off if they had not tried. Or least kept trying.
As usual with this Board, they carefully decided to start with two strikes against themselves.
They never looked at the disciplinary rules or litigation in other licensing states, so they were clueless about what has worked and what has not. Getting staff to give them a memo on the experience elsewhere would have been a leg up, instead of trying ESP to reinvent the wheel from scratch. Strike one. (As PLI readers know, the Board actually started with a disciplinary regulation from the Board of Massage Therapists, but that’s another story....)
Then, instead of inviting everyone affected to pitch in, the Board whipped this up basically in secret, never letting a draft leave the room.
On top of the experience of other states, the Board has a ready reservoir of expertise it could have tapped – such as feedback from KREC and KAR; the homebuilders and manufactured housing members could have solicited ideas from HBAK, KMHI, and other homebuilder groups; its education providers could have provided feedback from classes and instructors, and so on. There are a dozen or so consumer groups defending people in foreclosures and bankruptcies, and key groups of lawyers defending or complaining about home inspections, that could have been brought into the loop. The drafts could have been posted on the KBHI web site for comments. But no.
None of that happened. Strike two. Serving the public is really hard when you cut it off.
So these proposed regulations are unveiled in public here for the first time here – only days before the LRC hearing for comments on them.
What It Does Not Do
What the proposed regulation does not do, or undoes, is as important as what it says it does.
Privacy. Current Board rules give complaints a number, to identify the case, instead of using a licensee name, for example. The rule that names will not be used, for example in Board minutes, in the complaint process until there is a finding of wrong-doing is nowhere to be found in this regulation. The current complaint form, for example, advises that “As required by applicable privacy law, there will be no public reference to persons identified in the complaint pending Board investigation and action.” No such rule here.
The rule adds that “the complaint is not public until the Board takes a disciplinary action or imposes sanctions.” Not a word here.
It also says that “If the complaint is dismissed, it will continue to be identified by case number only.” Again, not here.
That’s a mistake. Current Board members may not know that the rule came from the original disciplinary cases. Back then, inspectors names appeared in the KBHI minutes before they even knew there was a complaint – and often with a disposition of the complaint. The present rule was adopted to address real problems.
Timely Filing. Current rules say that “It is the policy of the Board not to accept complaints on issues that occurred more than twelve (12) months prior to the date of filing unless some extenuating circumstance can be shown for the delay.” That’s missing in this regulation too. Everyone would have to guess that means it’s gone.
That would be both a mistake and an invitation to abuse.
The 12-month filing rule was sound and well-reasoned when it was adopted. It also coordinates with the statute of limitations for lawsuits against home inspectors. KRS 413.246.
It’s hard enough for a home inspector doing hundreds of inspections a year to remember the details of one home a year ago.
No Coordination. A persistent problem in licensee disciplinary cases has been what to do about complaints where there also is a lawsuit in the works or a 411 claim being resolved or an arbitration clause in the inspection contract.
In the past, people tried to use the complaint process as “discovery” in litigation, to get information or create evidence they were not entitled to in court. Some tried to use complaints to intimidate or retaliate against inspectors. More than one did so well over a year after the home inspection.
If Board precedents were followed, then the best reading of past cases is that the Board will not hear a complaint when litigation is pending. As to claims under KRS 411.270 to 411.282, the best reading is the same. The Board has not taken up complaints while a 411 notice was being handled by the parties. Coordinating contractual arbitration requirements with Board complaints has not been thoughtfully addressed by the Board, but certainly should be – for everyone’s sake. On the other hand, the Board has been only loosely bound by its own precedents and, truthfully, has no real record of many of them. It has shown a distinct preference for making up those rules on the spur of the moment.
Instead of figuring out the best answers, the Board simply ignores it in this proposed regulation. Once again, to hazard a guess, that means the KBHI just plans to make up the rules as it bumps along. But an ounce of prevention is worth a pound of cure.
Misleading Title.
Notice the regulation also is mis-named. It’s called “complaint procedure” but it is not for all complaints. It’s all about complaints of “misconduct by a home inspector” (or a “licensee”). Examples include: Subsections 1(3) and (5); 3(3); 4(2) and (3); 5(2)(b) and (3)(a), (b); 6(1) and (2).
It completely ignores one of the Board’s most important missions, and a prime reason for its existence – complaints against persons doing home inspections without a license, or advertising or claiming to do home inspections without a license.
In contrast, the current Complaint form (KBHI - Comp 1) applies both to complaints against unlicensed “wannabes” and licensees.
This regulation is not about all complaints, just a fraction of them, despite its title. Pointedly, it is about that fraction that most often has resulted in dismissals.
Complaints against unlicensed individuals are far more serious, far greater danger to the public, and have ended in enforcement actions far more often. For some reason, though, this regulation really is just for chasing home inspectors, instead of going after unlicensed people claiming to be home inspectors or handling the clearly important complaints involving them.
This is particularly striking given the Board’s unbroken history of failure taking any unlicensed home inspector off the streets since the day it was born. If any area of complaints needed work, surely it was the procedure to accomplish one of the Board’s basic purposes.
Ignoring the major threat to the public – unlicensed, unskilled “home inspectors” – while going after the very people who are complying with the licensing law instead, gets very close to dereliction of duty by the Board.
That said, it’s all about complaints, of course. So the first question is:
What’s a “complaint” against a home inspector? A complaint is “a written allegation of misconduct by a home inspector”...
OR
– “other allegation of a violation of:
(1) “KRS Chapter 198B” – which is the whole Department of Housing, Buildings and Constructions (DHBC) chapter of statutes -- including the Board of Housing Buildings and Construction, Elevator Contractor laws, the state building coded, and even safety glass labeling requirements;
OR
(2) “the requirements established in 815 KAR Chapter 6" – which is the entire manual of regulations for DHBC;
OR
(3) “or another state or federal statute or regulation applicable to home inspectors.” Sec. 1(3).
Seriously.
What’s “misconduct?” Whatever the Board says?
If so, our licensing statutes do not agree. Our statutes say disciplinary action and sanctions is only for “failing to comply with any provision of KRS 198B.700 to 738" or the regulations under those laws. Why the regulation does not say the same thing is unfathomable. But who wants to go to court to make the Board follow the law when it is supposed to be applying the law in the first place? That’s upside down. If the Board is going to enforce the law, it should be the model citizen following the law. Maybe one day.
Most licensing boards work hard to limit complaints exclusively to the area they regulate, and the express authority the legislature gave them. This proposed regulation does the opposite.
Though the definition suggests complaints do not have to be written or notarized, another section says it does. Sec. 2(2).
Most complaint procedures for real estate professionals, such as KREC’s, also require the complainant show some damages and their amounts. This should too. No showing of any damages would be required under this reg.
That opens the door to complaints that are nothing but arguments, with no injury or damages to complain about. The universal rule is the opposite: No harm, no foul. But how would the KBHI know what other states do? It never asked. It never even called KREC. Why? Carnack the Magnificent (you know, Johnny Carson's famed mind reader).
So, if this goes through, a “complaint” can be about practically anything – whether or not any damages were caused. And it can be made by anyone.
Complaints here could make practically any claim known to man – under any state or federal law, regardless of whether the KBHI has any authority to interpret or apply any of those laws or regulations – against any home inspector, any time, for any reason. Well, maybe not for a jaywalking bust when the inspector was nine years old. Oops. The Board can just say that should have been disclosed or was not disclosed the way they want. Presto! “Complaint.”
The truth is, the Board has no such powers in the first place.
KRS 198B.706(4) and 728 are very clear about the KBHI’s limits. The board “shall take disciplinary actions” or “impose sanctions” solely for “failing to comply with any provision of KRS 198B.700 to KRS 198B.738" or “any administrative regulation promulgated to carry out” those statutes.
The current rules, since licensing began, followed those statutes.
There are a number of other details at this first step stage.
Inspectors get 20 days after receiving a complaint to file a written response (though no form apparently is provided). That’s no change. But then the complainant gets 10 days to reply to the inspector’s response. There’s no requirement that the inspector get a copy! The “Compliance Committee” “may” request an additional response from the home inspector – but it does not have to, even if “additional issues” are raised. Sec. 3(3). It can also consider “other relevant material available,” whatever that might be, without telling the inspector. Sec. 4(1)(a). Under 13B “hearsay” prohibitions and the rules of evidence apply; not here. Another example: The complaint form (“KBHI 5") apparently was not submitted to the Legislative Review Commission with the proposed regulation, though it is incorporated by reference. Sec. 7(1). Who knows what bugs it might contain.
The bigger picture is plain enough, though.
It helps neither the public, nor licensed home inspectors, nor allied real estate professionals to invite complaints or investigate stuff where the Board has no power or authority to take any disciplinary action. Humility is the better part of valor. And administrative efficency.
This proposed “anything goes” idea is not just an invitation to trouble. It’s a huge waste of everyone’s time and resources.
Next comes a so-called “informal proceeding” – created to evade hearings and due process rules imposed by KRS 13B.
The definition of “informal proceeding” is “a proceeding instituted” – by whom, you might ask – “during the disciplinary process with the intent of reaching a disposition of a matter without further recourse to formal disciplinary procedures under KRS Chapter 13B.” Sec. 1(6).
The problem? This is all secret, shady stuff. No one – not the complainant, not you, no one – necessarily knows everything that this “Compliance Committee” is considering. There’s no hearing officer, no due process rights, not even a right to appear and talk to the “Compliance Committee.” Worse, it’s made up of Board members who will turn around and vote on their own report! That’s jury and judge, for you.
That’s why KRS 198B.730(1) installed a blunt rule: “The procedures set forth in KRS Chapter 13B shall govern the board’s conduct of disciplinary hearings.”
The purpose, pretty plainly, is to let the Board make up “rules” as it goes along to “settle” complaints. Sec. 6. In Board discussions, this has boiled down to the view it could get licensees to agree (or “contract to”) penalties the Board itself has no power to impose, such as a fine.
In fact, in every 13B disciplinary hearing process, there always are discussions about settling the issues. Nobody wants to go the whole nine yards if everyone can be satisfied earlier.
Dreaming up this “informal proceeding” process does not change chances for settlement talks. It just tilts the playing field. The “informal proceeding” exists primarily to strip the parties – the inspector and the complainer – of rights and protections guaranteed by 13B and by the KBHI statute. A fair process guarantees a fair proceeding, not a loaded one.
The only real advantage to this is that the Board can strong-arm an inspector. It could say he has no right to see the evidence, as he would in a 13B hearing, for example. It could say he has no right to an attorney, or to submit evidence, or to question witnesses, as he also would under 13B. It could say no one has a right to an impartial hearing officer, as everyone would under 13B.
In fact, it could pretty much say neither the inspector nor the complainer have any rights at all, except whatever the “Committee” says.
What’s missing in the new regulation – such as punishments tied to offenses, what rules apply to a “formal investigation,” and such – may be even more disturbing.
Revoking a license is a serious thing.
Revoking a license should be considered a death sentence for a licensee, not a club for paltry “misconduct.” You would not know that from reading this.
CE
Proposed 815 KAR 6:050
CE courses from 4 or 5 providers are exempted from Board “review or approval” -- and from any KBHI sanctions. It’s not clear exactly how many providers. It's an unlimited number of courses, dogs, doozies, or just plain dumb. Sec. 1(2).
It applies whether or not they're out of state sellers, or so-called "distance" providers (remember "mail order degrees and "diploma mills"?).
So whether a course is garbage or gold, the KBHI will automatically let them take your money and treat you however they want.
The new provider "disciplinary" rule only covers suspending or revoking "approval" of any CE providers. Sec. 5(1). So "unapproved" sellers go scot free from KBHI discipline. That means a seller can lie to you, cheat you out of money, and teach such misinformation you get sued (for example), and the KBHI will have tied its own hands. Handy.
You can bet that “anything goes” version of quality control will speedily elevate respect for home inspectors and guarantee excellence for your CE cash. On second thought, don’t bet on that.
The purpose of CE, of course, was to help improve service to the public with basic standards. Exempting CE courses from any standards, and any review or approval, does exactly the opposite. That’s where “basket-weaving” college courses came from – and got ridiculed. You can bet the public, and brokers and agents, will catch on.
If it’s right to skip Board “review or approval” for some, why not for all? If that’s wrong, then why pretend otherwise?
This change is exactly the opposite of the strict standards enforced by the older, far more respected Kentucky Real Estate Commission (KREC) for the brokers and agents that home inspectors often work with.
If this passes, home inspectors will have to watch out for “unreviewed, unapproved” courses and providers -- for the first time. The KBHI never let them in the door before. Now they can take money and deliver poopey. Rule 1 will be -- never give them money in advance. Remember Decker College? Students are still chasing tuition money they paid – to that Kentucky regulated educator – and then lost when Decker disappeared.
“Pre-approval” for CE becomes optional. Subsequent approval of CE courses is allowed. Sec. 6, 2(1).
This is quicksand filled with land mines. It will allow people to market CE courses without approval and, apparently, without saying so.
There will be no real downside, apparently, either. Again, KBHI seller "discipline" applies only to seller "approvals." Sec. 5.
How’s a home inspector with a month or two left on his license supposed to know? Then what? Ooops, sorry, no CE approval? Tough luck?
From the beginning, all CE courses sold to home inspectors had to be approved in advance. The benefits are obvious.
The benefits of this change are not.
Whoever thought something was broken that this regulation fixes ought to take some continuing education in educational standards and achievement.
There are, of course, no certified teachers or educators on the KBHI. But there were officers and directors of one educational provider.
For them the hidden agenda in these changes was simplicity itself. Regulation, approvals, course reviews, checking instructions, and provider “disciplinary” actions were good for that provider’s competitors, but not for them. That way, they got to make trouble for competing providers but not even have to file the first piece of paper for themselves. They also got to see what competitors were up to ahead of time. They even got to hassle students of other competitors, for CE approvals that did not apply to themselves. If you’re an unprofessional provider with no payroll or full-time staff, heck, you need every advantage you can get.
The provider who had officers and directors voting on this regulation was KREIA, the same group that was dissolved by the state for failing to do its routine corporate paperwork. KREIA holds the record for regulations broken and deadlines missed at the KBHI, among all providers in the history of the Board. KREIA leaders sitting on the KBHI likewise hold the record for ethics rules and statutes breached, among all KBHI members in the Board’s history.
The easy way around that was just ditch the rules. You can’t be caught breaking regulations that don’t apply, right?
Now that’s public protection.
For any CE provider who keeps getting tripped up in the rules, the solution is to shape up, not try to reshape the rules.
Whatever the rules are, the most fundamental requirement is that they should be the same for everyone. It’s not just basic fairness. It’s also that clients, other professionals like agents, and home inspectors all should be able to count on some basic, minimum level of quality in continuing education. Or, why bother?
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