Low standards for attaining and maintaining a Home Inspector license are a disservice to individual inspectors, the profession, and consumers of inspection services. NYSAHI has performed various surveys and has found that the majority of home inspectors agree that harm to the public perception of this profession could result from weak standards.
During the regulatory development period following enactment of the Home Inspection Professional License law, the New York Department of State (DOS) consistently expressed and acted upon a concern that certain provisions of the law could unfairly limit individuals from being able to attain licensure. This continues to be a guiding concern for the DOS and has resulted in weak initial educational requirements, minimal continuing education requirements, an absurdly easy exam, and a Mod 5 (field training) that clearly does not meet the requirements of the law for true on-site, and real-life training. The facts show that this concern on the part of the DOS is totally without basis. At least 10 other states have requirements more stringent than New York, including New Jersey, where reciprocity would be out of the question. New York inspectors who wish to work in New Jersey currently have to obtain a separate license under more stringent conditions.
Consumers believe that a New York State license is their assurance of a properly trained and knowledgeable professional. Under the present law, nothing could be further from the truth. Despite the massive, multidisciplinary knowledge base required to perform a proper residential inspection for the most important and expensive purchase that most people make in their lifetimes, and despite the many life threatening safety concerns that can exist in our homes, the hours of training to become a home inspector are a small fraction of those required by cosmetologists, barbers or hearing aid dispensers. The 140 hours of education and training pale by comparison with the 2,000 hours of training required of real estate appraisers, whose base of required technical knowledge is minimal compared to the home inspection profession. Unfortunately for the consumer, the minimal requirements for a home inspector license are totally out of keeping with the responsibilities of the profession.
The NYS Licensing Exam
The current exam created and offered by the DOS is recognized by everyone who has taken it to be absurdly easy.
- It does not meet the requirements of the law as written.
- It has never been updated despite many recent developments in home construction techniques and products.
- The exam lacks the credentials that are required by the very licensing law that spawned it.
The EBPHI’s National Home Inspection Examination (NHIE) meets the credentialing requirements set forth by the Home Inspection Professional License law and is required by 13 states and recognized by many others. It is also required for the highest certifications conferred by the American Society of Home Inspectors (ASHI), the oldest and largest trade association in the industry.
It is NYSAHI's position that the NHIE should be the NYS exam requirement.
Initial Training Requirements
It is clear to those of us in the profession that the present 140 hours of training are woefully inadequate to provide the knowledge necessary to properly evaluate all the structural, mechanical systems, as well as safety concerns found in homes. Ultimately a two-year degree focusing on the proper evaluation of these systems should be required, as well as significant supervised on-the-job training. Through our interviews with many individuals who teach home inspection licensing courses, all have expressed concerns that the current training requirements do not allow for sufficient time necessary to cover the intended subject matter, especailly Module 5, the field training section.
It is NYSAHI's position that the required hours of training should be raised from 140 to a minimum of 200 (30 hours each for Mods 1 through 4; 80 hours for Mod 5).
This need for additional training hours is also important for another reason: Many NYS licensed inspectors in the downstate area need to be able to practice in New Jersey as well as New York, in order to have viable businesses. Because of insufficient training requirements in New York State, New Jersey does not recognize our regulations as sufficient to allow our inspectors to practice in their state. Reciprocity with New Jersey is important to many of our members. We have asked the DOS to negotiate with New Jersey to determine and enact those requirements that would make reciprocity possible.
Inclusion of a rider on all home inspection purchase contracts similar to HUD's - "For Your Protection: Get a Home Inspection"
In most cases, purchasing a home is the most important and expensive decision people make. Purchasing a home with serious defects could financially cripple a family's finances, and lead to foreclosure. For this reason, several years ago, the Federal Department of Housing and Urban Development (HUD) required all purchasers who were buying a house with a federally insured mortgage to read and sign a rider included with the purchase contract. Although we feel that a home inspection should be mandatory for all home purchases, we do not want the purchasers to incur any additional expenses, especially during these tough economic times. Including this rider will incur no additional costs. It is highly important that potential home purchasers know the difference between an appraisal, which is a determination of the home value in relation to recently-sold, nearby, similar properties, and a home inspection, which details major defects that can cost the unsuspecting purchaser thousands of dollars of necessary repairs. The purchasers also need to be protected form unethical players in the transaction who may conflate an appraisal with a home inspection, or attempt to dissuade them altogether from a home inspection.
The slow pace of regulatory progress and infrequent meetings and lack of meaningful oversight by an Advisory Council to the DOS (which has since been abolished) has contributed to the growing concern voiced by most professional home inspectors regarding the lax requirements for licensure. NYSAHI stands ready to assist in any way possible to help ensure that licensure has real meaning in the profession and value to the public. While we believe that much more needs to be done to ensure that the consumer is adequately protected under the Home Inspection Professional License law, the proposals outlined above should represent a small step in the right direction.
A member asked about home inspectors being able to be qualified to perform windstorm certificate inspections, which is an inspection done on behalf of insurance companies for their insured clients in high-wind (coastal) areas. Windstorm certificates are currently provided by Professional Engineers. Therefore, we would need to change the insurance company requirements, as well as justify to the engineering community that home inspectors could be qualified to perform this inspection. Since windstorm certificates would be a sideline at best for only a limited amount of home inspectors, the Board decided that the limited resource of NYSAHI be allocated for more important efforts.
Mandatory home inspections
A member asked about making home inspections mandatory for real estate transactions in New York State. It was discussed by the Board. The best system to compare this to is the property appraisal system, which is already in use. Appraisal reports must be in a uniform format. Although New York State has a Standard of Practice set forth for home inspections, reporting formats actually vary widely among home inspectors, with many exceeding the Standard to provide more in-depth service. Like appraisals, producing a home inspection report would essentially be reduced to filling out a form, similar to the HUD forms used for property condition / compliance inspections. Along with the variation in home inspection reporting formats comes variation in pricing. If reports were to be delivered in a standardized format, this would lead to "apples-to-apples" comparison shopping for consumers and ultimately end up driving down the market price of a home inspection. This is exactly what occurs in the appraisal industry, not to mention that banks have changed the way appraisers are hired, making it very difficult for appraisers to maintain client lists and living wage pricing for their work. NYSAHI resources would be stretched in an attempt to change the rules of the NYS mortgage industry as well as dealing with the real estate lobby, who would likely oppose any measure to make home inspections mandatory. The board duly decided that it was not worthwhile to pursue this measure.
Paid Referrals and Preferred Vendor Programs
From the Code of Ethics for Home Inspectors for the State of New York, Title 19 NYCRR: 197-4.7 Conflicts of Interest
e) Home inspectors shall not directly or indirectly compensate, in any way, real estate brokers, real estate salespersons, real estate brokerage companies, lending institutions or any other party or parties that expect to have a financial interest in closing the transaction, for future referrals of inspections or for inclusion on a list of recommended inspectors or preferred providers or any similar arrangement.
The Code of Ethics for Home Inspectors in the State of New York clearly includes a provision prohibiting paying for referrals. This is obvious to most inspectors, but can become muddied when hidden within a “preferred vendor” marketing program. The Code of Ethics sets forth the position that payment to be placed on a list of “preferred providers” is payment for referrals.
Professionals have a duty to act in good faith toward their clients. Paying for referrals and participating in preferred vendor programs, as interpreted by the Code of Ethics, violates our responsibility to act in good faith toward our clients. The home inspection client should be able to have a reasonable expectation that when a home inspector is being recommended, the referral is based on merit, experience, and knowledgabilty, not on the payment of what could be interpreted as a bribe to the referring party.
A major part of all ethical codes involves the avoidance of conflicts of interest that can compromise, or appear to compromise, professional independence, objectivity, and integrity. Referring individuals whose interests lie in the successful sale of real estate, and home inspectors, acting in good faith toward their clients, may well have conflicting interests.
Placement on a list of “preferred providers” constitutes a referral. There is no real difference between being recommended verbally or in writing, singly or as part of a small group, such as a short list of “preferred inspectors”. When placement on such a list is contingent upon payment of a fee, it represents a payment for referral. It is misleading to the client, who does not know that the home inspector paid for the privilege of being placed on that list.
The State of New York, under the enforcement division of the Department of State, is pursuing legal action against inspectors who participate in these pay-to-play schemes. In addition, disgruntled clients may use the existence of a contractual arrangement between an inspector and a real estate agency in a lawsuit against the inspector. Conflicts of interest aren’t just ethical violations, they are a source of potentially significant liability. Home inspectors should be very cautious about developing business relationships with realty agents or brokers that might compromise, or appear to compromise, the integrity of the inspectors, or the profession, and increase their liability. Any financial arrangement with a real estate agency constitutes a slippery slope toward a clear conflict of interest. Many home inspectors welcome and appreciate the referral of business from real estate agents, believing that such referrals represent a genuine expression, on the part of the agent, of confidence in the knowledge, competence and integrity of the inspector. We strongly believe that, in the long run, adherence on the part of home inspectors to the strong ethical principles embodied in the Code of Ethics, and the avoidance of potential conflicts of interest, will encourage rather than reduce future referrals and recommendations, and will work to the benefit of the profession as a whole.