Legislation addresses licensing for home inspectors (for Colorado)

Great News!

One of the more important parts of the standard Real Estate Commission-approved contract used in Colorado for the sale of existing homes deals with the condition of the property.

The contract works like this: The seller provides the buyer with a property condition disclosure form that provides limited information - as actually known by the seller - about various components of the property. The buyer then has the right to have the property inspected.

If - based on the seller's disclosure form or inspector's report - the buyer doesn't like something about the property, he can terminate the contract. Or the buyer can give the seller a notice of unsatisfactory conditions that he wants the seller to fix. If an "inspection objection" notice is given by the buyer to the seller, the parties have a short period of time in which to reach a "resolution." Otherwise, the contract terminates.

What usually happens after an inspection objection notice is given is a new, and sometimes contentious, negotiation wherein the seller says something like: "I've already agreed to accept an outrageously low price for this property and I'm not going to fix a darn thing."

To which the buyer responds: "I've already agreed to pay far too much for this property and, unless the seller fixes everything on my list, I'm walking."

At this point, the real estate brokers involved will try to calm everyone down and put together a compromise whereby the seller agrees to fix some, but not all, of the items on the buyer's list, or the parties agree to a reduction in the purchase price.

A problem with this process is that anyone with a flashlight, and the apparent ability to use it, can claim to be a home inspector. And there are no standards as to what a proper home inspection consists of - or doesn't.

To address the issue, Senate Bill 15-140 has been introduced into the current session of the Colorado General Assembly. The bill, if passed, would create a new law called the Home Inspector Licensure Act.

The proposed act is very detailed and would require all home inspectors to be licensed. A new five-member government agency would be created, to be known as the Home Inspector Licensing Board. Three of its members would be home inspectors. The other two would be homeowners. The board would, among other duties, develop application forms, competency tests, procedures for handling complaints and disciplining licensees and continuing education requirements.

Licensees would have to carry errors and omissions (malpractice) and general public liability insurance with minimum coverage limits of $100,000 and undergo a fingerprint-based criminal background check.

Before July 1, 2016, applicants for a license would only need to show they have two years of experience and have completed 200 home inspections. After that date, however, more rigorous requirements would go into effect, to include 90 hours of training and 10 "training inspections" performed under the supervision of an inspector certified by the board.

The act would prohibit conflicts of interest, including kickbacks from contractors and others who might think an occasional recommendation from a home inspector would be worth a few bucks. The act would define a home inspection as a visual survey of the major components of the property and exclude any requirement for invasive procedures or technology-based testing.

SB 15-140 will have a hard row to hoe in a Republican-controlled Legislature intent on reducing, and not increasing, government regulation. But legislators are likely to hear some home inspector horror stories before they table it.

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Jim Flynn is a private attorney with Flynn Wright & Fredman LLC in Colorado Springs. Email him at moneylaw@jtflynn.com.

Read more at http://gazette.com/money-the-law-legislation-add…/…/1546489…

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At Ground Floor Home Inspection all of our inspectors have passed a home inspector certification course and have or are in process of passing the National Home Inspector Examination. We are very much in favor of proper licensing for home inspectors in Colorado.