He’s licensed to inspect

Home buyers can now expect to ask for a license when it comes to home inspections

BY KEN SCHACHTER
SPECIAL TO NEWSDAY

January 27, 2006

Paul Gressin recalls the lawless, rough-and-tumble days of New York state home inspections.

"You could put a screwdriver in your back pocket and a flashlight in your front pocket, and you could say you were a home inspector," said the owner of Woodmere-based Professional Building Inspectors. "It was the wild, wild West."

In those days, said Cathleen Quinn Nolan, an attorney whose firm counsels the Long Island Board of Realtors and Multiple Listing Service, qualifications were incidental. "You hung out a shingle. You could be a home inspector and a therapist to boot," she said.

All that changed on Dec. 31, when New York fell in line with the majority of states and began licensing home inspectors.

The Home Inspection Professional Licensing Act, signed by Gov. George Pataki in August 2004, imposes standards on inspectors of residential buildings with one to four units, except for new construction. The law does not mention buildings with more than four units. Exempt from the law are architects, engineers and code enforcement officers who already fall under separate state or local regulations.

Gressin, a 36-year home inspection veteran and Pataki's appointee to the New York State Association of Home Inspectors, which monitors the new law, said the legislation offers new protections for home buyers.

Working out the bugs

In the past, an ill-trained home inspector might say he or she saw no evidence of termites after a cursory inspection, Gressin said. Under the new law, however, insect and radon issues are reserved for specialists, and home inspectors are barred from including them in their reports.

Nolan, a partner at Melville-based Goldson Nolan Connolly PC and a former real estate broker, said the new law will provide the most benefit to home buyers of moderate means.

"Very wealthy people always get what they need," she said. But even people of modest means will spend almost half a million dollars on a starter home today, Nolan said, so "you want to know that somebody is licensed."

In New York State, real estate agents often quarterback transactions and in the past, some have charged home inspectors to be included on preferred lists or steered buyers toward a particular inspector.

Funneling buyers to a home inspector who is unlikely to raise significant issues could be good for the real estate agent who captures a share of the deal but financially painful for a buyer who discovers problems after the sale. The new law requires agents to provide multiple referrals.

The new law, however, seeks to address conflicts of interest that sometimes suffuse home sales. The law bars home inspectors from paying kickbacks or referral fees to sellers or the real estate agent of either the seller or buyer. Violators can have their license suspended or revoked and face civil fines of up to $1,000 per violation.

Under the law, real estate agents who refer a home inspector also are responsible for verifying that they are licensed.

Options for licensing

Home inspectors can earn a license by: taking a course of at least 140 hours, including 40 hours of supervised inspections in the field and passing a qualifying exam; providing proof that they have performed at least 100 inspections in the two years prior to Dec. 31 and have passed an exam, or providing proof that they have conducted at least 250 home inspections within three years before Dec. 31. Initial license application fees are $250, and renewals are $100.

Richard Feinsilver, a real estate attorney with offices in Nassau, Suffolk and Queens counties, said the new law is likely to "knock out a lot of the fly-by-night" home inspectors but he doesn't expect an increase in the cost of a typical inspection.

"There are enough reputable companies that the market will set its own rates," said Feinsilver, who put the typical range at $350-$500.

Richard Koller, chief operations officer of Rockville Centre-based Tauscher Cronacher, a professional engineering firm that does home inspections, said the rule of thumb in setting the price of home inspections is one-tenth of 1 percent of the sale price, adjusting for square footage, outside structures, the number of stories and whether water tests are required.

Based on that formula, an inspection on a $500,000 home would cost $500.

Bob Herrick, a builder and broker and owner of Century 21 Herrick Real Estate in Bay Shore, said home inspections really have come into vogue in the past eight years or so.

"Prior to that, you brought your Uncle Charlie along to kick the wall," he said.

Herrick said he hopes the law will weed bunglers out of the field.

"I'm sure there are a few people out there who shouldn't be doing what they're doing," he said. "Some of the companies give estimates. If a roof's $4,000, they say it's going to be $10,000 to $12,000 to repair. That's incompetent."

Koller said the law sprang in part from recognition of the vulnerability of home buyers. "The buyer was on their own," he said. "The buyer wasn't represented by anyone but the home inspector and their attorney."