Home Inspector Licensing Could Be a Requirement Soon

The Ohio Legislature is one step closer to licensing home inspectors. Last week the House Economic Development, Commerce and Labor Committee approved a substitute version of H.B. 211, Ohio’s Home Inspector Law. The proposed legislation would require those wishing to perform home inspection services to obtain a license from the Ohio Department of Commerce, Division of Real Estate and Professional Licensing. The law would also create the Ohio Home Inspector Board, which would oversee the licensing of home inspectors and enforcement of performance standards.

If passed, home inspectors would be required to complete 80 hours of pre-licensing education (which could be taken in a classroom or online). There is an exception for those home inspectors that demonstrate proof of experience in the field and complete a peer review session with a licensed inspector approved by the Ohio Home Inspector Board.

There is a proposed grandfathering provision, provided an applicant has satisfied three of the following requirements:

• Having performed at least 200 home inspections for clients for compensation or other valuable consideration;
• Having successfully passed the National Home Inspector Examination;
• Having actively operated a home inspection business in Ohio for three years before the bill’s effective date under a business name officially registered with the Secretary of State;
• Having been employed as a home inspector for the consecutive 36 months before the bill’s effective date by a company or individual that meets the license requirement specified in the bill;
• Having successfully completed 80 hours of instruction of a type that would qualify as continuing education under the bill;
• Having a license, registration, or certification in good standing to perform the duties of a home inspector in another jurisdiction that has requirements for licensure, registration, or certification that are substantially similar to the bill’s requirements;
• Having prepared at least five home inspection reports that have been verified as being in compliance with standards adopted by a national organization that consists of and represents home inspectors;
• Having completed, not more than one year before the bill’s effective date, at least one peer review session conducted by a national organization that consists of and represents home inspectors.

All applicants will be required to complete a criminal records check, pay an assessment to the Home Inspection Recovery Fund (used to satisfy a claim or judgment against a home inspector) and to take continuing education.

Referrals

Included in the legislation is a requirement that if a real estate licensee refers a home inspector to a client, the licensee must provide a minimum of three names of licensed home inspectors. Any real estate licensee referral will not constitute an endorsement of the inspector and the real estate licensee is not required to conduct due diligence on the inspectors referred. Of course, nothing requires a real estate licensee to make a referral and the proposed legislation protects real estate licensees from any civil litigation resulting from a referral.

For an inspector’s practice, the proposed legislation requires all home inspectors to enter into a written contract with clients, provide a written report, retain documents for five years, and adhere to certain, not-yet-defined, standards of practice and prohibitions against conflicts of interest to be specified by the Ohio Home Inspector Board. The Superintendent would have the ability to conduct investigations for both inspector wrongdoing and for unlicensed activity.

Testimonies

Both Bob Fletcher, the CEO of the Ohio Association of Realtors, and Blaine Swan, Chairman of the Ohio ASHI Joint Chapter Legislative Committee, testified as proponents of the legislation at the House Economic Development, Commerce and Labor Committee hearing. Mr. Fletcher described the need for the legislation, citing that “today anyone can claim to be a home inspector without any training or qualifications whatsoever.” He clarified that the home inspection process is the only component of a residential real estate transaction that is unregulated, unlike 30 other states that have regulation of home inspectors. Mr. Fletcher described the differing outcomes with an unqualified and qualified inspection, the latter resulting in a purchase of a home without knowing its true condition or a total breakdown of a transaction.

Mr. Swan testified that the legislation, “provides reasonable, but not unnecessarily burdensome, qualifications and standards to ensure competent and professional home inspectors” and “establishes a fair baseline to enhance professionalism in the industry and ensure that consumers receive competent and reliable home inspection services in making one of the most important purchasing decisions of most people’s lives – buying a home.”

The legislation received a total of 5 hearings before the House Economic Development, Commerce and Labor Committee, with both proponents and opponents testifying. It passed out of committee on a 12-2 vote. The legislation now moves to the House for a vote before proceeding to the Senate.

For more information on how the legislation will impact the real estate industry, click here.