Realtors are licensed. Attorneys are licensed. So are appraisers, electricians and
plumbers.
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So why not home inspectors?
That’s the rationale behind a set of bills in the General Assembly that would make Rhode Island one of the growing number of states that require home inspectors to pass a test and complete an apprenticeship before going to work.
The state has no laws governing the industry.
The bill, which passed the Senate Corporations Committee recently, would compel inspectors to pass a test given by the American Society of Home Inspectors, conduct 250 inspections during a year-long apprenticeship, carry $500,000 of liability and $500,000 of errors and omissions insurance, get continuing education, and have a high school diploma or the equivalent.
Several states, including New Jersey, North Carolina, South Carolina, Texas, and Utah, have laws regulating inspectors. The Massachusetts Legislature is also considering a law.
”The bottom line is it’s for consumer protection,” said Paul Brunetti, president of the Rhode Island Association of Home Inspectors. “The trend is across the country to have licensing. It’s the last aspect (of home-buying) that is not regulated.”
Home buyers hire inspectors to evaluate the house’s structural integrity. Inspectors search for leaking heater systems and electrical problems. They explore attics, walk roofs, and look for termites, lead paint, and failing septic systems. Inspections typically occur toward the end of the home-buying process.
While no law requires buyers or sellers to have a home inspected, between 90 and 95 percent of home-sale transactions feature an inspection, said David Iannuccilli, an East Greenwich Realtor who helped draft the law.
Home inspections – which started to become popular in the 1980s as the prices of homes soared – are often made a contingency of the sale, sometimes demanded by the mortgage company, sometimes by mutual agreement of the buyer and seller. Though most of the negotiation on the home’s price is done before the inspection, inspections are sometimes used to help in the bargaining process, especially if the inspector reveals some hidden defect that would have gone unnoticed, Iannuccilli said.
While there seems to be widespread agreement that inspectors should be licensed – the bill passed the Senate Corporations Committee unanimously, while the Massachusetts bill is supported by Attorney General Thomas Reilly – those who support licensing admit that there is little evidence of widespread corruption in the business.
That lack of public outcry concerns Robert A. Cardoza, vice president of Budget Home Inspection Co. Inc. in Warwick, who said there is no reason to license an industry which has had few complaints logged against it. “The business right now regulates itself through litigation – if you’re out there and you don’t know what you’re doing it’s going to catch up to you and you’re going to be out of business,” Cardoza said. “I don’t hear a large consumer outcry that home inspectors are ripping them off.”
Cardoza added that he believes licensing to be an attempt by people already in the business to discourage competitors from entering the market.
But the potential for problems does exist, said Greg Mancini, legal counsel to the Rhode Island Association of Realtors. Though most inspectors are competent, he said, home buyers need protection from those who aren’t.
”If the home inspector doesn’t give a good inspection, a lot of times there’s limited recourse,” Mancini said. “They can try and sue the home inspector, but in many cases the buyer may not have wanted to buy the (home) if they had had a thorough and proper inspection.”
Added Stephen Ryan, general counsel to the Massachusetts Association of Realtors: “I think the majority of people never realized that they weren’t licensed. We’re optimistic that the Legislature will see the importance of this proposal.”
The people who inspect homes now typically have backgrounds in mechanical construction and inspection, Brunetti said. The inspector’s role is different from that of a building inspector, he noted, in that the building inspector searches for violations of code. Home inspectors simply generate written reports. Inspections usually last from two and a half to five hours. The cost starts around $200, and any additional inspections – such as septic system, wells, and radon – are extra.
The proposed law has a grandfather clause in which current inspectors can receive a license as long as they can pass the American Society of Home Inspectors test and have performed 300 inspections before Jan. 1, 2000, the date the law would take effect.
This is not the first time the Rhode Island Association of Home Inspectors has tried to get a law passed. Similar attempts in 1992 and 1993 failed. This time, however, supporters believe they will be successful.
Said Joseph W. Accetta, chairman of the state Real Estate Commission: “The commission believes the home inspectors have a very vital role to play,” he said. “I think there’s a very good chance that it will (pass).”
