Key Problems with HB 257

Summary:

Any legislative analysis should start with consideration of the purposes of such a law.

I believe such a licensing bill should have two primary purposes:

1. To protect the public by
(I) Restricting practitioners to those meeting a specified degree of competency;
(ii) Providing complaint resolution and enforcement procedures
(Perhaps requiring insurance as a potential remedy)
2. To enhance the professionalism of the home inspection industry

I believe H. B. No. 257 as drafted and introduced in the Ohio House significantly undercuts both of those purposes in several key ways:

1. It places all power over home inspectors in the hands of the real estate sales industry.

2. It sets an extremely low threshold for certification of home inspectors.

3. It excludes home inspectors, trade associations and other professionals from providing the required continuing education.

4. It criminalizes issues which have previously been considered as non-legal ethical issues.

5. It also violates basic legislative drafting principles such as encasing a standard of practices in a legislative hammer lock, with little real hope of revising the SoP as changes in the industry dictate.

Discussion

First: The predominate failure in the Bill comes from the very regulatory structure it creates

As drafted, the Bill would place all control over, and regulation of, the home inspection industry in the hands of the real estate sales industry.

Many people perceive an inherent conflict of interest between the real estate sales industry and the home inspection industry. Even if such a conflict isn't inherent, conflicts often arise between real estate agents and home inspectors.

Not only would the Superintendent of Real Estate have all control over home inspectors; the Bill actually excludes any cognizable avenues of input from home inspectors into the process of regulating the industry.

(Note that the inter-relationship between the Superintendent of Real Estate and the Ohio Real Estate Commission (which requires that 4 of the 5 members be real estate brokers) is unclear, but it seems likeey that the Commission could have significant impact on the actions of the Superintendent of Real Estate.)

I believe this complete lack of input into the regulatory scheme by those being regulated would be completely unprecedented in Ohio.

After research of licensing in Ohio several years ago, I believe no other industries in Ohio cede complete control to a related industry, much less one which often has conflicting interests. (A possible exception is the real estate appraisal industry, which is subordinate to the Superintendent of Real Estate, but at least the appraisers get their own board with a minimum number of appraisers as members.)

Second: the standards set for education and experience are so low as to be meaningless: 8 hours of education on the regulatory structure and process and 10 inspections overseen by a "certified" inspector who is simultaneously conducting an inspection on the same property (and thus has little significant time to oversee the qualifying work of the beginning inspector.)

Setting such low qualifications not only undercuts any potential effect of lifting the standing of the industry, it does nothing to protect consumers from marginally qualified or unqualified inspectors.

Third: The bill requires continuing education providers to derive most of their income from education, thus undercutting education by professionals engaged in the trades or related industries, (unless they are hired by "professional educators.")

This would unduly restrict continuing education to secondary sources and create a windfall for such sources.

It would also likely dilute the quality of such education. Such educational sources rarely, if ever, pay instructors at a rate close to what they can earn within their respective trades. Thus, many highly qualified professionals would likely avoid providing their knowledge through such programs.

The Bill's substantive testing requirement is not inherently poor, but the provision itself is amateurishly drafted and provides an almost meaningless standard for approving such a test.

Fourth & Fifth: The Bill includes matters which need to be readily revisable as changes in the industry dictate, and it makes issues traditionally treated as ethical issues subject to the criminal penalties created in the Bill.

Legislation is notoriously difficult to change once enacted, and legislative drafting principals since the 1930s have used the concept of broad brush legislative action with the power to fine tune vested in administrative agencies with expertise in the particular subject area .

In sum, regardless of one's view of the need for or utility of licensing (or "certification") of home inspectors in Ohio, H. B. No. 257 has little of value for consumers or home inspectors.

It is of direct benefit to the private vocational education industry, and potentially of benefit to the real estate sales industry but at the expense of consumers and home inspectors

Bob Walker