Donald E. Lovering – Supports consumers

Bay State home inspectors are gearing up for a battle after hearing about a possible proposal to reduce the number of home inspector names given to prospective homebuyers.

Several home inspectors showed up at a meeting of the state Board of Registration of Home Inspectors last month to speak against providing a minimized list of home inspector names to buyers, after learning that the issue was slated to be discussed at the meeting.

“By reducing the list, there is an excellent chance to further erode the consumers’ ability to select their own home inspector,” said Donald E. Lovering, a Newton-based home inspector who is the current president of the New England chapter of the American Society of Home Inspectors.

According to a state licensing law passed last year, real estate agents are supposed to provide the entire list of home inspectors licensed in Massachusetts or give buyers a brochure that references a Web site that contains the list. Only buyer’s agents are allowed to make specific recommendations on home inspectors.

The measure was included in the law to keep Realtors from steering or referring buyers to only a select number of home inspectors and was hailed as pro-consumer by many inspectors who thought that it would reduce the appearance of favoritism and impropriety.

Lovering, who owns Advantage Home Inspection in Newton, and other inspectors fear that if the law changes, real estate agents will be minimizing the list to include only their “favorite inspectors.”

Some fear that agents, who are interested in finalizing real estate transactions as quickly as possible, may be directing buyers to inspectors who provide quick inspections and short and simple reports – which is not necessarily in the best interest of the consumer.

But Realtors complain that the large list – which contains more than 500 names – can be confusing, not helpful, to buyers. Providing buyers with a smaller list, possibly of five or more names of inspectors within a geographical region, in addition to advising them that they can seek other inspectors not listed, would be more beneficial, according to some real estate practitioners.

“One of the concerns that we’ve identified is that the entire list as is currently on the board of registration Web site isn’t particularly informative for a consumer looking for an inspector in a particular area,” said Steve Ryan, general counsel of the Massachusetts Association of Realtors.

Ryan emphasized that MAR has not taken any definitive position on the issue, but explained that the association’s government affairs committee will be looking at the issue closely. MAR has not proposed legislation at this point.

Since consumers will be free to access the entire list and since they can seek referrals from lawyers, mortgage officers, appraisers and others besides the real estate agents, Ryan said that “providing a general list of fewer names doesn’t seem to be a bad idea.”

“It’s clear that the system isn’t working as it should right now,” added Ryan.

At least one inspection company, Braintree-based Tiger Home Inspection, appears to agree with that sentiment. A Tiger representative was at the February board meeting speaking in favor of providing a smaller list, according to others who attended the meeting. The representative suggested that under the current system it was difficult for a consumer to find a home inspector.

Joseph Rizzo, president of Tiger Home Inspection, said last week that buyers in a real estate transaction are often under a time constraint to find a home inspector and get an inspection done. The lists that they’re currently referred to are too lengthy and aren’t always up-to-date, so it is difficult for them to make a selection within a few days, said Rizzo.

Rizzo also said that some buyers may not realize that just because an inspector’s address is listed in one community, he or she can also do inspections in another community.

‘Pandora’s Box’

The board Web site includes a list with licensed inspector names, the license number and type, the license status, city/town, state, business address and phone number. Some of the names on the list accompany a town name but no specific address or phone number. Visitors to the site can sort by license number or by last name, but not by town.

The site also includes links to groups like ASHI, the National Association of Home Inspectors and the Independent Home Inspectors of North America, which feature partial lists of inspectors.

Despite that readily available information, Rizzo said buyers frequently turn to real estate agents for referrals when the home inspectors they contact are booked up – not uncommon, given the hot real estate market.

“It gets thrown back into the Realtors’ lap,” said Rizzo.

Providing a list of five to 10 names of inspectors in the region from the beginning along with brochures on where to find additional inspectors would be a way to alleviate that, he said.

“There is trouble finding the competent inspector that is available in specific areas,” said Rizzo.

But others disagree, saying consumers can get names from various sources – phone books, the Internet, referrals from friends, relatives, appraisers and others – without a real estate agent providing the names.

The issue arose after the executive director of the Board of Registration of Real Estate Brokers and Salespersons sent a memo to the home inspectors’ board in January.

“Real estate agents are directing an increasing number of concerns to the members of my board over providing a complete list of all licensed home inspectors,” wrote Executive Director Joe Autilio. “These agents note that their clients do not find a complete list helpful and would prefer a smaller number of names from which they can make a selection.”

Autilio further wrote that the board members believe that “it is not helpful to simply provide a list of all licensed home inspectors.”

“The real estate board contemplates sending a request to the professional Realtor association to file legislation to alter the relevant portion of your licensing statue,” wrote Autilio. “My board would suggest that real estate agents be permitted the opportunity to provide the names of at least five licensed home inspectors while advising clients that they are free to choose any home inspector they wish, including beyond the five provided.”

When the item appeared on the agenda for the February meeting of the home inspectors’ board, Lovering and at least seven other inspectors attended to state their opposition. Those in attendance were overwhelmingly opposed to the proposal, said an inspector who attended.

“It is our opinion that the current requirement provides a minimal firewall between the real estate salesperson and the home inspector, thus reducing the potential for the agent to only recommend his/her favorite inspectors,” wrote Lovering, in an opposition letter to the board.

“At the very least, this requirement can reduce the appearance of impropriety and help protect the consumer to get an objective home inspection opinion,” he wrote.

Sen. Cheryl A. Jacques, D-Needham, a key supporter of the home inspector law, said she would be willing to listen to arguments on both sides. However, she said she is reticent – not opposed – to making even minor changes because that could open up the law to more changes.

“The firewall provision is a very good one and important one to insure that there is no conflict of interest,” said Jacques.

She added, “I would caution the Realtors: Is this recommendation worth opening up a Pandora’s box worth of changes?”

The acting director of the home inspectors’ registration board, Richard Fredette, referred questions to its media relations department.

A spokeswoman confirmed that the item did appear on the meeting agenda and discussion occurred, but she said that no vote was taken on the issue.

Even though the agenda for the May meeting has not been finalized yet, at least two inspectors indicated that they anticipate discussion on the issue to continue at that meeting.

“Legislation was enacted to support the consumer,” said Lovering. “We support that legislation.”

Lovering is referring to the home inspector licensing law that took effect last year. The law established the board of registration for home inspectors, which administers licenses for inspectors and associate inspectors. Inspectors must attend approved training courses and pass a test in order to get the licenses.

Under the law, inspectors also must have errors and omissions insurance to protect clients in case mistakes are made during an inspection.

The law also stipulates that real estate agents cannot make direct referrals to home inspectors to guard against conflicts of interest. An entire list of licensed home inspectors should be given to buyers or they should be directed to the list. Only buyer’s agents are exempt from that rule.

Inspectors Oppose Any Changes to State Law

by Banker & Tradesman time to read: 6 min