Legislature(1999 - 2000)
04/06/2000 01:50 PM House FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 207
An Act relating to the registration of persons who
perform home inspections; and providing for an
effective date.
REPRESENTATIVE NORMAN ROKEBERG stated that HB 207 would
protect consumers and the home inspection industry by
licensing home inspectors in Alaska.
He noted that consumers deserve assurance that the home
inspector that they hire is competent and that they have
recourse against inspectors that are not. HB 207 would
accomplish that by establishing licensing qualifications
such as registration, insurance, and proof of competency via
a written and practical examination. Home inspectors will
also be required to provide consumers with an inspection
report, using a standardized checklist comprised of elements
deemed necessary by the industry for a thorough home
inspection.
Representative Rokeberg commented that a faulty inspection
could have serious consequences for consumers, particularly
when they are buying or selling a home. Common sense
dictates that home inspectors must be held accountable for
their work. The legislation would limit legal actions
against a licensed and registered home inspector to a
written home inspection report not more than one year old
and/or lawfully disclosed. Also, the penalty the court may
impose is not more than $500 for each violation.
Co-Chair Mulder noted the language shifts between the
various committee substitutes. He questioned why the State
should create another board. Representative Rokeberg
responded that there would be more enforcement while
protecting the consumer. Additionally, it was not the
intent, to write the regulations into the statute. He
believed that to draft the regulations is warranted, as it
would specify an examination. He stated that they would
have failed in the effort to provide the sounding board
without a board.
Representative Austerman voiced concern with the
qualifications outlined for the inspectors. Representative
Rokeberg replied that the home inspectors would not be
inspecting the new homes. Additionally, those home
inspectors should be providing nothing more than a "visual
inspection" of the home. He noted that there would be a
liability associated with the inspection.
Representative Austerman asked if the liability would be
terminated after a one-year inspection. Representative
Austerman disagreed with that concept. Representative
Rokeberg replied that it would not be shifted.
Representative Austerman questioned how much liability would
need to be purchased. Representative Rokeberg replied.
(Testimony inaudible).
Representative G. Davis questioned the reason for the
legislation. Representative Rokeberg spoke about the
reporting fee. (Testimony inaudible). He noted that there
could be a limitation to that damage. He added that people
are reluctant to break their word by signing an agreement.
Representative Rokeberg commented on the typical routine of
an inspection. The State disclosure law "kicks" in and then
it is bargained; however, he acknowledged that there are
instances, when there are errors made in the report. He
expounded that the idea of the bill was to relieve the
liability of the real estate inspector. (Testimony
inaudible).
Co-Chair Mulder voiced concern when determining the home
inspection business. Representative Rokeberg stated that in
the statute, there are requirements for the examination. He
stated that there would be a "flushing out". Co-Chair
Mulder asked the amount of experience required.
Representative Rokeberg responded that list was included in
the legislation on Page 3, Line 11.
Co-Chair Mulder voiced concern that this would create a
"good old boy club" and would be very difficult for a new
person to break into. He advised that he was reluctant to
make rules that contain admission and exclusion. Home
inspection is a very important function and qualified home
inspectors are necessary. Representative Rokeberg replied
that there are specific provisions listed on Page 2. Co-
Chair Mulder argued that those provisions specify what is
needed to become an associate inspector is that the person
must work under an existing inspector. He reiterated that
it would be difficult for a new person to get in. He
emphasized that there would have to be an existing entity
who would be willing to take you on.
Co-Chair Mulder agreed that there would be too much power in
the hands of the board. Representative G. Davis pointed out
that engineers are also home inspectors. Those people could
get out from under the "thumb" of the proposed board.
Representative Rokeberg interjected that State law currently
indicates that a person has to work two years as an
engineer's assistant before they can take the examination.
He suggested that any kind of professional license could be
classified as a professional "guild".
Co-Chair Mulder acknowledged that home inspection is not
"rocket science". He noted that he would create a Letter of
Intent to accompany the bill, to clarify that this should
remain an open profession.
Representative J. Davies asked if there was a sunset clause.
Representative Austerman voiced his support of a sunset
clause.
(TAPE CHANGE, HFC 00 - 107, Side 2).
Representative Austerman inquired the types of liability a
realtor had which would be given up to the inspector.
Representative Rokeberg spoke to the shifting around of the
responsibility and the liability for a realtor. He noted
that the standards are based on what you "should have known"
given a reasonable basis. He added that most real estate
brokers are not trained in inspecting.
Co-Chair Therriault questioned language on Page 6, Line 5,
"alleging & proving".
CATHERINE REARDON, DIRECTOR, DIVISION OF LISCENSING,
DEPARTMENT OF COMMUNITY & ECONOMIC DEVELOPMENT, explained
that language was a quote from the contractor's statute.
Co-Chair Therriault questioned the exemptions listed on Page
7. He asked if all those persons would be excluded.
Representative Rokeberg explained that was correct.
Co-Chair Therriault pointed out the amendment proposed by
Representative Rokeberg. [Copy on File]. Representative J.
Davies commented that it "did not make sense" the way it was
drafted.
RON JOHNSON, (TESTIFIED VIA TELECONFERENCE), REAL ESTATE
COMMISSION, KENAI, addressed a concern on Page 4, the
identification requirements. He asked the reason for using
the license number. He stated that appraisers are not now
required to use their license numbers for advertising.
He asked about using the title "license home inspector" even
if the person was an engineer. Mr. Johnson noted that the
major concern rests on Page 5, listing the types of
insurance. He pointed out that there is no consumer
protection in that language and he urged that section be
removed from the bill. Mr. Johnson listed additional
concerns with the proposed legislation.
Mr. Johnson concluded, stating that in the fiscal note, most
of money would be used for developing education material.
He pointed out that there already exists a "wealth" of
education material available on line. He recommended that
inclusion should be reconsidered.
In response to Mr. Johnson, Representative Rokeberg stated
that the bill would not address his liability, but rather
the one-year life of the report.
DEAVE FEEKEN, (TESTIFIED VIA TELECONFERENCE), ALASKAN
ASSOCIATION OF REALATORS, KENAI, observed that the concept
for this legislation originated from complaints of buyers
and sellers in the real estate industry from the home
inspectors being used. He echoed concerns voiced by Mr.
Johnson.
BRUNO REHBEIN, (TESTIFIED VIA TELECONFERENCE), MAT-SU,
stated that most of his concerns had been previously
addressed. He observed that the legislation is going to
cover new and pre-existing homes and that the costs would go
up. He asked why the homebuilder was not being represented
on the board. Mr. Rehbein inquired who was being protected
through the legislation.
BILL BRUU, (TESTIFIED VIA TELECONFERENCE), MAT-SU, commented
that the purpose of the amendment is to assure that the home
inspector's liability would not go on forever.
Representative J. Davies questioned why the home inspector
would have to give himself permission to do the repairs.
Mr. Bruu responded that there is no other place in statute
that addressees that concern. The home inspector needs to
have control over the report and to be covered for long term
liability.
Representative J. Davies asked if it was the intent that the
information received from the inspection be used without the
written consent from the person who ordered it. Mr. Bruu
explained that the intent was not to release it to anyone,
subsequent other than those listed in Sections (A) & (B).
The problem which has arisen, is that once the report is
released by the home inspector to the buyer, a number of
party's call for an interpretation of that document. He
observed that they could receive as many as 6 to 8 calls
with requests for information. He stressed the liability
attached to the reports.
DAVID OWENS, (TESTIFIED VIA TELECONFERENCE), OWENS
INSPECTION SERVICES, PALMER, testified in opposition to the
legislation. He added that the Mat-Su Homebuilders
Association also opposes the legislation and that they would
forward a letter stating their views on the concern.
Ms. Reardon stated that the original version was modeled
after the Construction Contractor statute, AS 08.18.151.
She added that public liability insurance could have come
from the Construction Contractor statute.
Ms. Reardon referred to the fiscal note. She observed that
the original note has $25 thousand dollars included for an
examination. The current note removes the exam money.
There continues to be a fiscal note that estimates an $800
dollar fee if there are 100 inspectors. She observed that
it would be less if there were more inspectors. Ms. Reardon
noted that there is a sunset date of 2004, established in
Section #3, Page 9.
JOHN BITNEY, LEGISLATIVE LIAISON, ALASKA HOUSING FINANCE
CORPORATION (AHFC), ANCHORAGE, testified in support of the
legislation. The current practice for AHFC would be changed
under Sections 4 and 5. Currently, in all new construction,
there is a standard for qualification of purchase with a
home mortgage with AHFC. He pointed out that there is a
five-step process that has to be signed off on. The bill
would guarantee that these people are able to certify homes
to qualify for purchase by AHFC. During the transition
period, International Conference of Building Officials
(ICBO) would be eliminated and only state home inspectors,
on behalf of AHFC, would be recognized.
Mr. Bitney continued that there are a number of
circumstances where people have purchased homes. They have
been told that the home had been inspected. In Alaska, that
can mean different things depending on the individual sale.
When something goes wrong with the home, the case is that
the homebuyer is out a substantial investment and they want
to sue everyone. He observed that AHFC has been called on
for assistance and is concerned over the liability
associated with that. The legislation would create a "level
playing field" and would establish a more identifiable State
standard.
Representative J. Davies asked if the legislation would
apply to energy raters. Mr. Bitney responded that it would
not apply to energy raters. He noted that further on in the
AHFC statutes, the energy efficiency standards are
established. The bill does not address that statute.
Co-Chair Therriault stated that HB 207 would be HELD in
Committee for further consideration.
| Document Name | Date/Time | Subjects |
|---|