Another First – KBHI “REPRIMANDS” Inspector
For FedPac Professional Opinion
Federal Pacific Electric (FPE) reared its ugly head again at the Kentucky Board of Home Inspectors July 14 meeting.
Instead of protecting the public by urging home inspectors to alert consumers about FPE residential devices, the board picked on an inspector who did. Practically every inspector reports a “Federal Pacific panel present.” It’s virtually the only brandname for panels, breakers or enclosures routinely in our reports. It’s not because of a “designer logo!”
Now, for the first time, a home inspector was “reprimanded” for reporting his professional opinions — as our law and SOPs require. The subject? FPE. The reason? An “advisory bulletin” far more flawed than the inspection report.
He reported both that the FPE panel should be “investigated further by a Kentucky state licensed electrician” (in the Summary section) and “replaced” (in the body of the report). The report did not use the kryptonite word “remove.” “Removal” is the word that actually appears in Advisory Bulletin 07-001 (“AB1”), paragraph 2 (“to require or recommend the removal of FPE panels solely on the basis of the manufacturer’s name and without visual evidence of a specific hazard is irresponsible and could cause the homeowner undue financial hardship.”) (for more please look over the story below, “Ungarbling What Advisory Bulletin 07-001 Says”).
There was no basis for any disciplinary action against the inspector. (We’ll call him “Ricardo,” after a TV favorite of Lucy, and to avoid confusing him with the complaining agent.) It’s closer to the truth to say the board broke the law, and one of its own regs, to rain on an inspector for supposedly breaking an “advisory” that he actually followed to the letter. Doing so, the board backed a seller/broker who just might have been trying to pull a fast one, instead of the inspector, who did his job, or the public both the inspector and board are supposed to protect.
The inspector broke no Kentucky law. He followed the law. He gave his “professional opinion” just as KRS 198B.700(6) requires. He broke no regulation; he followed the regs too. And he followed his SOP. The KBHI never said, or suggested, otherwise. He gave his client his “professional opinion, ” as Kentucky law requires.
What happened?
A Lexington broker named Gardner (name changed) filed a complaint against Ricardo, who inspected a house Gardner was brokering for sale. The inspection report accurately reported a leaking roof and interior damage it caused (the pictures were great). Surprise! Ricardo’s client had been told nothing was wrong with the roof. The report also identified the electric panel as FPE, recommended “further assessment” by an electrician in the report summary, and suggested “replacement” in the text. (He also “stated that some insurance companies will not insure homes due to the service panel listed” and gave an example from his experience of that happening a few years ago.)
Gardner was ticked because the sale fell through, so he complained to get his pound of flesh, and maybe intimidate, the inspector he blamed. In fact, the deal fell through because the seller refused to repair or replace the roof and the inspector’s client worried there was “possible structural and environmental damage behind the walls,” as Ricardo wrote to the board June 1 in answer to the complaint. The FPE panel was useful info, but not a deal breaker. Ricardo gave all this info to the board when he got the complaint.
The net result?
A good inspector, with more than a decade under his belt, did his job. He provided the professional opinion and explanations that well informed the buyer, instead of letting his client buy trouble he was told wasn’t there.
A good inspection report gave the client the information and professional opinions needed to make a well-informed decision and take the next step. As it worked out here, there were more repairs needed than the client bargained for or believed were disclosed; the other side did not budge; and the client decided their were fish in the sea. Has anyone heard it’s a buyer’s market?
An owner/seller and/or agent who may have misrepresented to the buyer was not happy about the truth.
If you’ve got a problem with that, please laser engrave the details on the back panel of a 60-inch Wolf Model DF606DG 6-burner double griddle, dual fuel, dual convection system, three rack, stainless steel range and mail it to me overnight.
Sounds like Ricardo deserved a merit badge. Instead, the board poured fertilizer on mushrooming trouble. Rather than protect the public, as the inspector did, the KBHI joined an agent with a dubious sales strategy to hurt a diligent, skilled inspector for doing his job well — over one word, at most, that was not against any enforceable rule! Now the board can expect more desperate agents who lose a sale to blame the inspector instead of the house. More than anything else, this case stands for the idea that sellers or agents can seek vengance against inspectors who tell the truth instead of letting them pull the wool over the public’s eyes and this board might just back them!
Say it ain’t so, Joe!
What’s Going On Here?
The KBHI did not claim he broke a law, regulation, or SOP. Yet that is exactly where the board’s disciplinary authority ends. KRS 198B.728 provides the board can take “disciplinary actions..or impose sanctions” on a licensed inspector only for “failing to comply with any provision of” the law ( KRS 198B.700 to 198B.738) “or any administrative regulation promulgated” to carry those statutes out. Period. It does not permit disciplinary action for a professional opinion different from an “advisory bulletin.” See also KRS 198B.703(3); 815 KAR 6:030 3(1).
This is fundamental. Administrative boards like the KBHI carry out law the Legislature passes. Agencies do not make law. The Legislature passed the law, just mentioned, that says the board can discipline licensees only for one of two reasons — breaking a law, or breaking a regulation. Another law the legislature passed, and a regulation KBHI adopted to carry it out, says home inspectors have a duty to give their “professional opinion” about a condition, KRS 198B.700(5), in a report including the inspector’s recommendation “to repair or monitor,” KRS 198B.700(5), (6), with “integrity and fidelity to the client,” based “only” on their “experience, training, education,, and personal opinion.” 815 KAR 6:030 Sec. 1(2),(3). The SOP that both state law and the board requires this inspector to follow also says the same thing. KRS 198B.704(13); 815 KAR 6:030 Sec. 2(3).
That didn’t stop the board. The KBHI said it reprimanded him because he broke AB1. When, and how, any one ever supposed an “advisory” became mandatory, and a basis for discipline, is a mystery. Truth is, it never did become mandatory. It’s not called “advisory” for nothing (for more on that, keep reading).
As if that were not enough, Mike Patton, the chair of the Review Committee that recommended the reprimand, went on to tell the board that it all boiled down to one word in the report (but not in AB1, by the way).
“All he had to do was word that just slightly different” to comply with AB1,” Patton said. “If he did, it would be a mute point.” (That’s right, Patton said “mute.” If he had worded that one word just slightly different-ly, it might have been “moot” point and English. That’s partly jest, of course, but it also shows how ridiculous it is to nit-pick one word in a fine report. I’ll bet you can find one, or maybe even two, words to pick at here too! Feel free to engrave the whole list on that 60-inch Wolf range…. )
So when we get right down to it, to board sided with a misleading or nondiscloseing seller and/or agent against an inspector who followed the law, the regs and his SOP and helped protect the public with his professional opinion. And the board did that because of one word, “replacement,” that does not even get mentioned in AB1, that Patton and the board said was the basis for discipline, contrary to law.
We hope the board has the good sense and humility to reconsider, rather than forcing the inspector to appeal. With a little luck, the KBHI might be sensible enough to do that before the inspector’s name is immortalized in the board Minutes. The first sign of a true professional is knowledge of the field. The second is knowledge we all can learn, coupled with a willingness to admit mistakes promptly.
Now’s the chance to truly show character — and the expertise expected of a licensing board.
To untangle this mess and get a grip on it, takes deconstructing it “brick by brick,” step by step. Here goes:
First: What’s An “Advisory Bulletin”?
Well, it’s got to be “advisory,” plain and simple. Period. The End.
In fact, it was so “advisory,” and such an unclear concept, that AB1 started life as an “Advisory Letter.”
By definition, “advisory” means it is not mandatory. Because it is not mandatory, it cannot be “broken” or “violated.” It’s just a recommendation, not a rule.
Because it is not a mandatory rule, and merely “advice,” then it cannot be enforced with disciplinary action.
If it’s anything more, then it’s a “regulation” by another name.
But if it’s a regulation in disguise, that would make AB1 an unlawful regulation – since there never was a “proposed administrative regulation” or any required impact statement and it never was “filed” or “promulgated,” “effective,” or “adopted” as required by KRS Chapter 13A.
Other than those basics, your guess about exactly what an “advisory bulletin” might be is as good as anyone else’s. The KBHI never has said.
AB1 was the first “advisory bulletin” the KBHI ever posted or mailed. People were waiting to hear what an “advisory bulletin” was and how it would work. If they’ve been holding their breath since it came out on December 3, 2007, better send an ambulance. Seven of the 10 board members in December, 2007 are gone now too. (The “advisory bulletin” business has turned into a bad habit for the board. A second “advisory bulletin” has been issued, purporting to tell inspectors how to write a contract and saying they “shall” include a KRS 411.278 notice in their contracts. Whoops. The KBHI’s power and authority is limited to administering and enforcing KRS 198B.700 to 198B.738. Period. KRS 198B.706. It has no authority to interpret KRS Chapter 411, or any of the other laws. That’s not its job. But that’s the problem with “advisory bulletins.”)
As if that were not puzzlement enough, the public record does not show AB1 ever was approved by the board. KBHI’s approved Oct. 9, 2007 Minutes say only that “the Advisory Letter…about FPE” had a “motion to approve” — but no second and no vote. Every other matter in that meeting’s Minutes shows a “motion made” that was “seconded” by someone and a record of vote, like “carried; all concurred.” But not AB1. It’s the only motion with no second and no vote recorded. An inspector who looked it up would have to conclude it’s an interesting, even mysterious, letter but it was not a board “action” since the record showed no second and no vote.
Now that’s coming out of nowhere.
Is Disciplinary Action Proper – Based on an “Advisory Bulletin”?
In a word, no.
First, “advisory bulletins” are just that: advice – recommendations, rather than rules.
Second, Kentucky law governing the board’s disciplinary action is clear as a crystal bell. “The board shall take disciplinary actions…for failing to comply with KRS 198B.700 to 198B.738 or any administrative regulation promulgated to carry out KRS 198B.700 to 198B.738.” KRS 198B.728.
In other words, by law, board disciplinary action can only be used for failing to comply with the home inspection law (KRS 198B.700-738) or an administrative “regulation” “promulgated” to carry out that law. (“Promulgated” is a word of art in administrative law. In Kentucky, it means that an administrative regulation has been “submitted” to the Legislative Review Commission, as required by KRS Chapter 13A. AB1 was not.)
KRS 198B.706(3) seems to further limit disciplinary actions to violations of the law. In any event, no statute allows KBHI disciplinary action for failing to comply with advice, or “advisory bulletins.” Nor should one.
An “advisory bulletin” in general, and AB1 in particular, is not one of those laws, and it definitely is not one of those regulations. AB1 was not “promulgated” either. Isn’t that a little bit obvious?
In short, just to be clear for those suffering from late stage denial, Kentucky law does not allow KBHI “disciplinary action” or “sanctions” against an inspector who followed the law and the regulations, even if he may have disregarded an “advisory bulletin” or AB1.
Do you think the board will be honest enough to just say “whoops” and take it back? We really hope so.
KRS 198B.7228 should be good enough, but there’s more.
Third, the KBHI regulation on licensee discipline prevent such action — as it should. Disciplinary procedures within the jurisdiction of the KBHI must be prescribed by administrative regulation. KRS 13A.100(5).
The board consistently has ducked that law too. The first problem was the KBHI putting inspectors names in the minutes without ever even telling them there was a complaint. Who knew, until PLI students saw names on the screen (from board Minutes) and told us it was news to them. KBHI member Mike Green came to us for help with a new procedure to end that abuse. PLI was happy to help. We drafted an anonymous procedure to handle the immediate problem and we urged drafting a thorough regulation. To his credit, Mr. Green proposed the anonymous procedure and it was adopted. That was better than before. PLI never asked for credit or compensation; the work was contrbuted freely. But the offer to do a thorough regulation never was picked up.
Today, the KBHI disciplinary regulation that covers inspector conduct still is 815 KAR 6:030 §3. It’s pretty skimpy, as disciplinary regs go. (For a comparison illustrating what it should look like, check out KRS 324.150-.170 and 201 KAR 11:190, KREC’s broker discipline setup). But one thing is clear: Our regulation says the “board may investigate complaints related to violations of this administrative regulation” – only. Nothing more.
“Advisory bulletins” are not mentioned in 6:030. FPE panels are not mentioned in 6:030 either. The disciplinary committee and the board affirmatively hung the whole “reprimand” solely on the report’s supposed departure from AB1, and nothing else. No law, reg or SOP even was mentioned. (You can just imagine some defensive numbskull now trying to say “well, jeez, it was ‘related’ to the reg…somehow…on second thought..yada yada.” Not. Don’t even start. AB1 is less “related” to 6:030 than I am “related” to your Moma. Let’s get it right from now on.)
So? 6:030 adds a simple lesson: The KBHI did not have the authority — under its own regulations — to even investigate the FPE issue or a report that did not pay homage to AB1.
If the board followed state law, or just its own regulation (as it insisted Ricardo had to nit-pickingly follow its advice), it never would have ended up taking the side of a broker/agent with suspect motives against an inspector who truly served the public and did his duty nicely.
The KBHI’s own disciplinary regulation denied it even the option to “investigate” complaints arising under an “advisory bulletin” instead of a “administrative regulation.” That’s no “technicality.” That’s the way it should be – and is – for practically all Kentucky boards. Otherwise rules could pop up willy-nilly.
Why the chairman of the board’s disciplinary committee did not know this may be hard to imagine. It’s the law, and the key aim of license discipline is to teach the law (and regs) by example. But everybody makes mistakes. This may be a “teachable moment.” The disciplinary committee chairman may have a chance to think about this some more before the next meeting. Mr. Patton can find in himself to simply get this right.
There’s still time to do the right thing.
Imagine that Discipline on an “Advisory Bulletin” Were Proper, Just for Discussion.
What’s A “Reprimand”?
Good question.
In this case, a “reprimand” appears to be a concocted disciplinary action the board dreamed up, contrary to state law, for an imaginary (though impossible) violation of an illusory “advisory” web posting entitled “Advisory Bulletin” that the board invented, without specific legal authority, but never acted on, or approved, in the first place. Trying saying that ten times without taking a breath.
In other words, the board has no authority for a “reprimand” and the rules are against it.
Here’s an overview of the “disciplinary action” department.
Since May 9, 2006, the board’s disciplinary regulation always has said “Pursuant to KRS 198B.728, the board .. may impose the following penalties: (a) Denial of a license; (b) Suspension of a license; and (c) Revocation of a license.” 815 KAR 6:030 §3(1). It still says that today (though it’s got a proposal to amend it in the works). “Reprimands” aren’t on the list.
That’s not just a “minor glitch” either. Generally, the power to “reprimand” is specifically conferred on a board by law. For example, the Kentucky Office (now “Department”) of Housing, Buildings, and Construction specifically is authorized by law to “reprimand” electricians. KRS 227A.040(6)(3). So is the Kentucky Real Estate Commission (“KREC”). KRS 324.160(1)(f) (“formal” or “informal”), KRS 324.328(4)(b). No law ever specifically conferred the power to “reprimand” on the KBHI.
The only reasonable conclusion is the KBHI has no such power. The story of its disciplinary statute confirms the point.
From here, the plot thickens. In fact, KRS 198B.728 never did limit the board to denial, suspension, or revocation. It always used more general terms, such as “disciplinary actions” and “sanctions.” However, the board (and its counsel) always insisted, fairly enough, on reading KRS 198B.728 to harmonize and be consistent with KRS 198B.706(3). That’s where the three specific disciplinary alternatives came from.; that’s all that 706(3) lists. When the regulation was written, KRS 198B.706(3) provided “The board shall … issue, deny, suspend, and revoke licenses in accordance with KRS 198B.700 to KRS 198B.738.”
It also was true that being forced to choose between basically yanking an inspector’s license and doing nothing about a complaint put the board between a rock and a hard spot. Professional Learning Institute always has taught that the KBHI should pursue progressive discipline options, like points on driver’s licenses or the increasingly harder steps used by the Kentucky Board of Medical Licensure (such as restricting a doctor’s license to not allow narcotic prescriptions for a term of years, or requiring mentoring or supervision, etc.). The board went the other way. It listed its punishments.
BR 373 amended KRS 198B.706(3), on the board’s initiative, effective July, 2008. As amended, KRS 198B.706(3) now says “The board shall…issue, deny, suspend, place on probation, require additional continuing education, and revoke licenses for violations of KRS 198B.700 to 198B.738.” That’s all there is. Since the remaining statutes leave no doubt the KBHI has disciplinary authority only for licensees breaking the board statutes or regs, (“violations of KRS 198B.700-738”) that’s the whole shootin’ match. To put a finer point on it: no reprimands, for sure.
Any doubt disappears with one last fact: During the legislature’s 2008 amendment process, other specific powers, such as fines, were sought by the board, mentioned in its minutes, and thrown out in the end by the legislature. Consequently, even if someone wanted to rubberize the law’s language, the history of other specific powers denied the board locks that out. KRS 198B.706(3) is specific disciplinary authority, not a free fire zone. There is no more.
The KBHI has talked about “reprimands” before. As early as the March 11, 2008 minutes, there was talk about the board’s Complaint Review Committee (CRC, now “IRC”) recommending “a letter to reprimand [the] licensee.” But no vote or action is recorded. Then there’s a reference in the minutes of July 8, 2008 to the board sending a “cautionary letter” to an inspector who sent a partial inspection report with his license renewal application. A second is recorded, but no vote. In August 12, 2008’s minutes (after the amendment to KRS 198B.706(3) was effective), an inspector is “reprimanded to a Continuing Education class.” That’s all she wrote.
In essence, as of July, 2008, the discussion was ended. The legislature specifically authorized the KBHI to take five, and only five, disciplinary actions: the three old ones – deny, suspend, or revoke a license – plus the two new ones, (4) probation and (5) require additional CE. No reprimands.
Be that as it may, the ill-fated Inspector Ricardo makes history: He becomes the first licensee the KBHI dreamed up a reprimand against, contrary to the law governing the board, by turning Ricardo’s good work into a concocted violation of an imaginary rule, also contrary to law, based on an illusory “advisory” never even adopted by the board in the fist place. If the board will not obey the law and its regs, why dump on an inspector for not following one “advisory” word?
The inspector got it right. The KBHI got a lot more wrong. Why not just say so — and be glad it was another fine inspection?
Sticking with what’s real works. Well.
Real well.
What’s the Real Story on Fed Pac?
The facts about FPE devices are basic: UL pulled the plug. Courts found fraud.
The facts about FPE devices boil down to a few basic points.
This info is the closest thing to “current documentation,” as Advisory Bulletin 07-001 (“AB1”) puts it. (FPE stopped making devices in 1986.) This also pulls together the documentation as a whole. There is no better data.
Federal Pacific Electric Co. (“FPE”) panels and their Stab-Lok® breakers were manufactured by FPE and installed in homes from the mid-1950s to the early 1980s (actively through 1979; the rest was a wind-up). They were one of America’s most widely used, and less expensive, breakers and panels. Several hundred million circuit breakers and millions of loadcenters were installed. They are not a blip on radar.
An estimated 28 million FPE panels – all with FPE breakers – are in use today. (Not all are original. Remanufactured and clone Stab-Lok breakers are sold.) It’s estimated they were installed in as many as 10% of all American homes, including many in Kentucky.
That means Kentucky home inspector find FPE panels in about 1 in every 10 inspections on average – or around 30-40 times a year for full-time inspectors.
No one else is in direct contact with consumers about FPE equipment more regularly, or in a position to give them the information on FPE that professionals know.
FPE Stab-Lok breakers and panels were a unique design. Most plug-in circuit breakers use jaws that fit over a bus bar, so the metal of the jaw parallels the bus bar. FPE Stab-Loks, standard in FPE panels, are just the opposite: FPE breakers have a set of prongs (the “FPE stab”) that are inserted into a slot in the bus bars. This puts the FPE stab at a right angle to the metal bus. The result is less contact.
A common FPE problem is finding Stab-Lok breakers loose in the bus bar. That creates a real headache for home inspectors. Loose FPE breakers can just pop out on inspectors trying to get a look at them because FPE breakers are “on” with the breaker toggles handles down (facing out, toward the outer sides of the panel), instead of the opposite direction, pointing in, toward the center, as has been required since the 1984 NEC. Inspectors have to gingerly rock off, or see-saw, the panel deadfront (or cover), without accidentally tripping or dislodging a breaker, to inspect the ground, bonding, etc.
If the FPE stab only touches one edge of the bus slot, the low contact pressure and small contact area will combine to produce arcing and overheating. This typically is not visible to home inspectors because breakers burn out from the back toward the front. The key signal of this arcing and overheating is scorch marks on FPE bus bars, which can only be seen by removing breakers (a scorched bar with breaker removed is shown below). That’s beyond the scope of a general home inspection. (Electricians don’t usually do it either.) While those are common and important FPE problems, illustrating the unique design, several others are reported (keep reading). All the problems get more acute with age.
“The central safety defect in FPE Stab-Lok(R) electrical equipment is that FPE Stab-Lok circuit breakers fail to trip under overload or short-circuit conditions, at a failure rate much higher than comparable equipment made by other producers. This failure to trip occurs up to 80% of the time when the breakers are called-on to trip, depending on the individual breaker type and ampacity. The usual industry rate of failure of a circuit breaker to trip in response to an overcurrent or short circuit is much less than 1%. When an overload or short circuit occurs in an electrical device, say an electric clothes dryer, the circuit supplying electricity to the device is supposed to be interrupted, electrical power cut off, by either a fuse or a circuit breaker. This interruption of electrical power is intended to minimize the resulting fire hazard of electrical overloads or short circuits. A circuit breaker that fails to trip is unsafe fails to protect the electrical circuit and the building and building occupants where that circuit breaker is installed. This can lead to fire, property loss, and injury or worse,” reports Daniel Friedman, principal author/editor of the InspectAPedia website, www.inspect-ny.com/fpe/fpepanel.html. (Friedman is the former chairman of ASHI’s national Technical Committee and Education Committee, as well as author of The ASHI Reporter’s _______ article on FPE. His photo of a burned out FPE breaker below is gratefully acknowledged.)
Two resulting problems are often noted: If a circuit breaker does not open the circuit with excessive current it can cause a fire. (This is why FPEs are described as a “latent defect.” They do not directly cause a fire. That would be a “hazard.” Some other failure must happen to cause overload of a FPE protected circuit, followed by failure to trip. That is a “latent” or indirect hazard.)
A second problem with FPE breakers is that some overheat to hazardous levels under overcurrent for sustained periods of time (but often less than the UL safety standard). Overheating can cause incapacitation of the breaker (it won’t opne anymore). Sometimes the temperature can get high enough to ignite fire.
In the end, though, while it may be cool to know all that, home inspectors really do not need to go there. An inspector’s job is not to sort all those functional and mechanical issues out. It’s just to give his “professional opinion” about the condition. It is enough for a home inspector to know FPE (1) has a notorious 50-year history of problems, (2) making it uniquely likely among all electrical panels to have a latent hazard which cannot be visually identified; (3) provides minimal 100-amp service compared to routine 200-amp service today, (4) cannot be properly tested for a lower price than replacement, (5) cannot be upgraded with new breakers for less than replacement, and (6) detracts from the function and value of the home. That is plenty to support an inspector’s “professional opinion” (KRS 198B.700(5) and all three SOPs), based “only” on the inspector’s “experience, training, education, and personal opinion” (815 KAR 6:030 Sec.1(3), (2)), to “replace” FPE panels as the best and preferred “repair” (which means “restore to sound or good condition;” ref. KRS 198B.700(6))
People sometimes say a neighbor has a FPE panel and “it’s working fine.” What they mean is the power stays on. The breakers aren’t tripping. But with FPE, not tripping may very well mean the breakers are not working. Not tripping is not a breaker doing its job; rather, tripping (if there’s overload or shorting) is a breaker’s job. You don’t expect modern breakers in your home to be tripping either. If they do, they’re probably working. A circuit breaker’s intended function is to reliably trip safely on overload and then reset properly. Modern breakers do. 1950s-70s FPE breakers often do not. The only way to know for sure if a FPE Stab-Lok is working is an expensive kind of testing normally done by electrical engineers (not electricians). But the price for that testing is more than replacing the FPE panel with modern, upgraded (to 200-amp) service.
In other words, it makes more sense overall to recommend “replacing” a FPE panel, rather than properly testing it — for reasons that are practical (most FPE panels in Kentucky are 30 year-old 100-amp, for example, but today’s standard is 200-amp) and economic (why spend more testing than going directly to cheaper replacement ? And why spend more buying new cloned FPE replacement breakers than it would cost to get a new and better 200-amp replacement that also would take a negative away from the property?), as well as historical. Those reasons have nothing to do with electrical mechanics. They don’t take an electrician’s license to get there; they’re not rocket science. But they are real world. They also recognize it is not good advice to recommend a (functionally fictional) “further evaluation” by electricians. Electricians are not the right professionals to “further evaluate FPE;” if testing really is what a buyer wants; electrical engineers are.
Not incidentally, inspectors recommending “replacement” take no business away from electricians. They’ll do the replacement.
How the FPE Debate Ignited: A Thumbnail History
In March, 1979, FPE was acquired from UV Industries Inc. by Reliance Electric for $345 million. UV Industries was a liquidating trust which handled assets of the bankrupt FPE and then profitably liquidated itself (who owned its shares? Wall Street stock arbitrageurs and traders had nearly 80%.) Reliance revamped FPE’s manufacturing and quality control but kept the Stab-Lok design.
Then, later, in September, 1979, Reliance (and FPE) were acquired by Exxon for $1.2 billion. In June, 1980, Reliance sued UV in a Cleveland federal court to get its money back. That lit up the FPE problems. A week later Reliance notified the Consumer Product Safety Commission (CPSC) of FPE breaker problems.
On July 5, 1980 (more or less), Reliance stopped shipping FPE Stab-Lok equipment. However, there was no recall (recalls were voluntary) and existing inventory continued through the pipeline. Reliance hired Southwest Research Institute, an independent testing lab, to help prove its case but its lab results were not made public. Instead, Reliance settled the lawsuit for $41.85 million, refused to cooperate further with the CPSC, and sold FPE to Challenger in 1986.
Today, FPE’s corporate address is an Cleveland, Ohio law office.
The documentation of FPE problems is perilous, since many pieces of the puzzle are inconclusive by themselves. Pieced together, the documentation as a whole is a fairly clear picture.
If home inspectors simply quoted the public record on FPE, here are the basic points it makes:
1. FPE “knowingly and purposefully distributed circuit breakers which were not tested to meet UL standards as indicated on their label,” the New Jersey court hearing the class action against FPE ruled in 2002, after hearings years of expert evidence. This is the most “current documentation” on FPE.
That’s important. If FPE’s residential gear actually failed to met Underwriters Laboratory (UL) standards, they could not have been installed in compliance with any building codes of that era anywhere. The old saw heard from some inspectors and electricians, that FPE was “installed to code, grandfathered today, and therefore OK,” won’t work. “Frauds” (the court’s word) are never installed to code. Frauds simply never complied with code in the first place.
The New Jersey court had been hearing a class action lawsuit against FPE, UV Industries (FPE’s parent), Reliance Electric and others for years when it issued an Order for Partial Summary Judgment. The Memorandum accompanying the Order went on, after the quotation above, to say that “Defendant FPE’s mislabeling of the circuit breakers constitutes an affirmative misrepresentation and, therefore, Plaintiffs are entitled to treble damages.” The court concluded FPE’s practices “violated the Consumer Fraud Act.” Yacout v Federal Pacific, et al., Superior Court of New Jersey, Law Division: Middlesex County, No. L-2904-97, Order and Memorandum for Partial Summary Judgment, Oct. 29, 2002.
After 2005, the New Jersey court ordered millions of dollars paid to FPE residential panel owners to test or replace FPE panels. That’s the most “current documentation.”
2. The trail of FPE safety defects documentation began becoming public after Reliance Electric Co. bought FPE in March, 1979.
� In June, 1980, came the very unusual move, where Reliance sued its own subsidiary, FPE, saying FPE used “materially deceptive and improper manufacturing, testing, and certification practices” in making its panels and circuit breakers. Reliance complained FPE’s success “was due substantially, if not entirely, to a pattern of materially deceptive and improper practices in the manufacture, testing, and sale” of its circuit breakers. The suit also claimed FPE used such practices to get certified by Underwriters Laboratories (“UL”) since its label generally was required to meet local building codes. See, “Exxon buys a scandal along with a company,” Business Week, July 21, 1980 at 66. The case was complex, and eventually settled, with most of the court records sealed (not disclosed).
� “Underwriters Laboratories labels for most of FPE’s circuit breakers were obtained through improper practices,” FPE said in a Reliance Electric press release, July 7, 1980. It pointed to no-trip problems with the breakers and FPE testing that was fixed.
3. FPE’s Stab-Lok breakers failed “at relatively low over-current conditions,” FPE (now a sub of Reliance) itself reported in a 1980 notice to the Consumer Product Safety Commission (“CPSC”), after its own retesting and review of FPE data. Reliance Electric Co. press release re FPE breakers, July 5, 1980. FPE’s test data never has been made public. We understand it is in discovered documents in the New Jersey class action, but sealed (not public) at this time, though not likely for long. The 1980 FPE notice ignited a round of testing at the CPSC.
4. Federal Pacific Electric panels/Stab-lok breakers were apparently delisted by Underwriters Laboratories (“UL”) in 1980.
“The delisting occurred after UL changed testing procedures for circuit breakers following CPSC concern that the product [FPE Stab-lok breakers] might pose fire hazards,” Business Week (July 21,1980) reported.
Business Week reported Reliance first said it was told the delisting was routine “but sales had slid so much by early May that it was obvious that the real problem was not the failure of circuit breakers to gain UL approval but ‘deception’ in obtaining certification over a long period of years.” UL’s test data has not been made public, though it too appears to be of record in the New Jersey case. UL would not confirm or deny delisting FPE, saying the relationship between UL and its client, FPE, was “proprietary.” Reliance was the source of confirmation.
Reliance’s 1982 financial statement, filed with federal stock regulators, indicated it had learned that previous UL listings on FPE products had been obtained by “deceptive means” and that “as a result, most of the circuit protective products manufactured by Federal Pacific, at some point thereafter, lost their UL listing.” Reliance said the deceptive practices ceased after their acquisition (1979).
5. There’s a legend that the CPSC later blessed FPE equipment. Not so. Here’s what really happened:
After the 1980 notice, the CPSC got as far as three preliminary tests of FPE devices. None of the results were encouraging, but none were conclusive either, in the CPSC’s view.
� The basic 2-pole no-trip problem was documented by CPSC-C-81-1429, “Final Report: Calibration and Condition Tests of Molded Case Circuit Breakers” (Dec. 30, 1982). Failures to trip on overload were a huge percentage – 1 in 4. (Table 1 Summary of Failures showed that with a small overload on both poles, FPE breakers failed 25% of the time, followed by lockup).
� A FPE Stab-Lok (R) panel that failed due to bus-bar interconnections in the panel and ignited was studied in “Failure Analysis of Residential Circuit Breaker Panel,” CPSC-C-81-1455 (May 20, 1982).
� “Status Report – Evaluation of Residential Molded Case Circuit Breakers,” CPSC-C-81-1455 (Aug. 10, 1982) further documented failure of FPE two-pole Stab-Lok (R) breakers. Ref., www.inspect_ny.com/fpe.
6. Then, on March 3, 1983, the CPSC announced it closed its two-year investigation into FPE Stab-Lok circuit breakers. By the end of 1982, FPE was a has-been manufacturer in the residential circuit breaker market.
The CPSC said that the action was taken because “the data currently available to the Commission does not establish that the circuit breakers pose a serious risk of injury to consumers.” The CPSC said it had “insufficient data to accept or refute Reliance’s position” that the breakers, which Reliance had reported to the CPSC as not “fully complying” with UL requirements, nonetheless created a hazard in households typically when operated in a “repetitive, abusive manner.” CPSC staff estimated it “would cost several million dollars to gather the data necessary to assess fully whether those circuit breakers … present a risk to the public. Based on the Commission’s limited budget ($34 million for fiscal year 1983), the known hazards the Commission has identified and must address (involving products of other manufacturers) and the uncertainty of the results of such a costly investigation, the Commission has decided not to commit further resources to its investigation of FPE’s circuit breakers.” The CPSC reserved the right to “reopen its investigation of FPE circuit breakers if further information warrants.” There was never an investigation of loadcenters by CPSC. www.cpsc.gov/cpscpub/prerel83/830008.html
Since FPE functionally was out of business by then, there was no practical relief for consumers, such as a recall, no matter what a CPSC investigation found.
One other key reason also had to be considered. In early 1982, CPSC lost a major 8-year lawsuit brought by Kaiser Aluminum over another electrical product, aluminum wiring. The final outcome was fairly basic. The court said that, regardless of any hazards, aluminum wiring was not a “consumer product” subject to CPSC jurisdiction, unless CPSC showed a substantial number of consumers/new home buyers contracted directly with electricians to install the wiring. Typically, consumers/buyers contracted with builders, developers or general contractors, not directly with electricians, to install wiring in homes, the court said. It would be understandable if CPSC chose not to get into that fight all over again, with FPE able to use the Kaiser Aluminum case as a roadmap (“FPE breakers are not ‘consumer products.’ either, your Honor; consumers do not buy breakers directly any more than they buy wiring directly.”).
In short, the three initial CPSC tests were discouraging, but too little too late. The CPSC investigation ended up fizzling, about the same time FPE did.
7. Just when you think you’ve heard it all, nearly a decade and a half later, out of the blue, an article defending FPE breakers showed up in the May-June, 1999 issue of IAEI, the magazine of the International Association of Electrical Inspectors. It was titled “Federal Pacific Electric Co. Stab-lok Update,” www.iaei.org./subscriber/magazine/99-c/stablok.htm. Now and then a well-meaning electrician will tell us that’s why he decided FPE breakers weren’t worth the worry. It would help if they read the piece more carefully.
That’s not what the IAEI said. Here’s what really happened: The name of the article’s author was not printed, way out of the ordinary for IAEI. The editors explained that omission, partly, with a note at the bottom of the article that said it “was prepared by the former quality manager of FPE, who is a consultant to the company.” The editors note said “the gist of the article is that FPE Stab-lok loadcenters and circuit breakers are listed and labeled, and suitable for the usage intended.”
However, the editors added “This information is neither approved nor disapproved by the International Association of Electrical Inspectors.”
Dan Friedman wrote an August 11, 1999 reply as an IAEI member (it’s on his web site). He wrote the letter was “biased toward the defense of FPE” and should have been signed “the Howard B. Abramoff Law Office,” the firm defending FPE. Nothing happened.
Reasonable people can reasonably have different professional opinions about what to make of that.
8. FPE breakers and panels no longer are manufactured by FPE. They haven’t been for over 25 years. Consumers can’t go to Home Depot and pick a FPE breaker off the shelf, as they could with modern breakers.
Replacement Stab-lok breakers were UL listed and the U.S. listing holder was the American Circuit Breaker Corporation, which makes cloned Stab-Lok replacement breakers. “American” brand breakers are no longer UL listed, though they are listed by ETL, another nationally recognized lab.
Cloned (or “non-FPE”) FPE breakers have been manufactured by several companies since American, for replacement parts. There is no known test data as to the non-FPE compatible Stab-Lok breakers. To the extent they are essentially the same product with no substantive change in design or manufacturing, it is reasonable to expect the same problems. Canada’s Federal Power (Schneider Canada) manufactures Stab-Lok breakers and panels. It recalled two of their 15-amp models manufactured between mid-1996 and mid-1997, saying “In some circumstances these breakers may not trip….If the circuit breaker does not perform as intended, there is potential for property damage and/or personal injury.” Of course, Advisory Bulletin 07-001 does not address Federal Power breakers, if its authors even knew about them, or problems with cloned breakers generally. They would probably try to hide behind the SOP exclusion that inspectors do not address recalls, but the recall is not the point. The point is that the Stab-Lok type of breaker, whether from FPE or others, has a history and inspectors should not be muzzled into concealing or failing to disclose information they know and opinions they hold about it.
Cloned and remanufactured FPE breakers remain available, but they are extraordinarily costly. A conventional, modern breaker not only is much cheaper, it’s much better, modern, equipment.
At the price of FPE clone breakers today, replacing all the breakers in an FPE panel usually would cost a little more than replacing the FPE panel and breakers with modern equipment and upgrading service (most Kentucky FPE loadcenters are 100-amp, substandard by today’s 200-amp service). It also would both add value to the home, and remove a resale trip-wire issue only likely to grow more troubling to sellers in the years ahead. Having an FPE panel in a house is like having a Super-8 tape player in a car – maybe it works, but who wants it, and where do you get the tapes?
1970s electrical gear are not wine – they do not improve with age. There is no advantage to buying anything but the latest electrical equipment. FPE panels/breakers also lock uninformed consumers into purchasing a 50 year-old breaker design unless an inspector (or someone) alerts them.
It does not take an electrician to give home buyers this information. Any newspaper could. There is no reason home inspectors should not — especially the “first-time home buyers” we see so often now, who really need it. Concealing it would be a sin. In fact, though the KBHI never has been clear about this, (look over “The Aronstein Saga” below) lately the board has sounded like it agreed at least on this point.
9. In fact, telling consumers/home buyers an inspector “recommends further evaluation by a master electrician,” as Advisory Bulletin 07-001 suggests, is an empty gesture. The truth is that Kentucky electricians are not equipped to properly test FPE panels with live overloads at one or both poles by themselves. Most do not even carry the equipment.
The price also is prohibitive, even if an electrician wanted to take it on. The cost of adequate testing for FPE breakers and panels exceeds the cost of replacement. See, J. Aronstein, “Hazardous FPE Circuit Breakers and Panels,” 17th Annual Spring Seminar, St. Louis Chapter, American Society of Home Inspectors (“Without doing live current functional testing on all of the [FPE] breakers, it is impossible to determine which of the breakers in the panel are defective….Electrical contractors and inspectors are generally not equipped to do that type of testing, and homeowners or potential purchasers are not likely to have the required budget for extensive specialized testing. In fact, thorough testing would most likely cost more than changing the panel.”)
Electricians hired by home buyers or owners who actually want their FPE panels or breakers thoroughly and properly tested should tell them to get an electrical engineer, Ken Leathers, Kentucky’s chief electrical inspector says. But that would cost more than replacing the electric service with a modern upgrade too.
So why does AB1 tell us to “recommend further evaluation by an electrician” instead of an electrical engineer? Let’s guess: The KBHI did not know that either? Are we warm?
10. FPE equipment could not have been installed for the last generation – over 25 years – under any modern standards.
At least five FPE design problems no longer are allowed by code: its spring-mounted bus, breakers that are “on” when down, the split bus service equipment, the gutter space, and the wire bending space.
Code inspectors have not seen FPE gear installed since 1980. Kentucky electricians have no duty to tell consumers. Home inspectors are the only professionals whose scope of work includes inspecting and reporting their “professional opinions” to consumers on FPE equipment. Advisory Bulletin 07-001, or no AB1, why would the KBHI try to get inspectors to do anything else?
If Advisory Bulletin 07-001 is left hanging around by the KBHI, it will continue to create reporting problems for Kentucky inspectors. Since the KBHI never bothered to tell inspectors exactly what it considers acceptable reporting language (if it could), maybe something like this would work:
“Federal Pacific Electric panel and breakers noted. Some years ago, the Kentucky Board of Home Inspectors decided home inspectors should not give you their professional opinion that a Federal Pacific panel and breakers like this should be replaced with a modern 200-amp service panel and breakers. So I am not giving you that opinion, even though that would be the opinion and recommendation of professionals far more expert on the subject of Federal Pacific Electric than the Kentucky Board of Home Inspectors is. Try any web site.”
(Just kidding. LoL.)
Alternatively, here’s the professional opinion on one leading Federal Pacific site (for more, read “What Others Say” below; PLI does not recommend specific FPE reporting language but is happy to review proposed language from PLI alum for comments ):
“Federal Pacific Electric “Stab-Lok” service panels and breakers are a latent hazard and can fail to trip in response to overcurrent, leading to electrical fires. The breakers may also fail to shut off internally even if the toggle is switched to “off.” Some double-pole (240-Volt) FPE circuit breakers and single-pole FPE Stab-Lok circuit breakers simply do not work safely. There are other FPE panel-defects independent of the breaker problems, panel and panel-bus fires and arcing failures in some equipment. The failure rates for these circuit breakers were and still are significant. In some cases failure to trip occurs 60% of the time – a serious fire and electrical shock hazard. Failures are documented in the CPSC study and by independent research. Additional independent testing and research are on-going and are reported here. FPE Stab-Lok electrical panels should be replaced. Do not simply swap in some replacement breakers.”
Compare former Kentucky 5-term Congresswoman Anne Northup’s testimony at her Senate confirmation to the Consumer Product Safety Commission last week. “I want to assure the committee that I will independently and faithfully protect American families from unsafe products,” Mrs Northup said. “They have to be able to count on us. If I am confirmed, I will do everything possible to think of the families I am responsible for and to protect as my own.” (Aug. 6, 2009). Now that’s what it’s about!
What Do Others Say?
What follows is a representative sampling of FPE reports from websites of home inspectors, electricians and others. There’s no shortage of this material; this is just the first three pages of unsponsored links turned up in a Google search for “Federal Pacific Electric.” The reports are edited to fit and to convey the author’s point.
What Other Home Inspectors Report
“FPE electric panels have a history of breakers not tripping when they should.”
www.cornerstone-inspection.com (ASHI; Colorado)
“For years stories about the hazards and defects related to this equipment have prevailed. Stories of recalls, poor manufacturing and house fires have been reported….If in doubt, there is no doubt, replace the panel.”
www.cahillinspection.com (ASHI, North TX)
What Electricians Say
“FPE service panels and breakers are a latent hazard and can fail, leading to electrical fires. During a typical year, home electrical problems account for 67,800 fires, 485 deaths, and $868 million in property losses.”
www.truetechelectric.com (Oklahoma City, OK)
“Federal Pacific Electric Stab-Lok type residential circuit breakers are reported to pose a fire hazard… Due to design and/or quality control problems, the FPE Stab-Lok circuit breakers do not always work reliably. Testing has shown that roughly 30% of the 2-pole circuit breakers fail to trip when they should. Virtually 100% of some lots of these breakers are defective….There is no visual clue if the breakers are working or not. Recently some companies have started making replacement breakers for FPE panels. In most cases these are manufactured with the same problematic design of the original, and there is not data that they are more reliable….Any repair should be performed by a licensed electrician.”
www.sccelectrical.com (Colorado Springs, CO)
How Advisory Bulletin 07-001 Snuck In:The True Story of AB1’s Birth
It’s a bird! It’s a plane! It’s wha?
Advisory Bulletin 07-001 (AB1) might as well have been teleported down from a UFO.
There was no notice or warning from the Kentucky Board of Home Inspectors (KBHI) — about either “advisory bulletins” generally or the FPE issue specifically. It was never “proposed,” as a regulation would be required to be. It was never “filed” or “adopted.” There was no hearing. No KBHI research or report. No consultants, advisers or experts hired. No draft for public comment. Nothing. Nada. Zip. Zero.
There wasn’t even a prior “advisory bulletin,” whatever that might be, in the nearly two years the KBHI had existed. (Until recently, most observers would have said chances were good that Step 1, an “advisory bulletin,” was about the same as a letter, or a blog. Then the board made up Step 2, trying to discipline inspectors like it was a lawful regulation, without complying with the law itself.)
Not that “advisory bulletins” had never been discussed; they had. There was a board vote January 3, 2008 to issue an Advisory Bulletin “about Report Writing,” but it never came out. There was discussion about a bulletin on heat exchangers the month before, but it never appeared either.
AB1 was hatched after a 2007 letter to the KBHI from Ken Leathers, chief of OHBC’s Electrical Inspections Section. He appeared at the KBHI’s Sept. 11, 2007 meeting. KBHI minutes don’t give a hint at what he said. The minutes report that “Mr. Green stated that the home inspector licensee has the liability [yup, it says “liability”] to inform the client that the FPE panel needs to be inspected by a licensed electrician, but the board does not want home inspectors to state the panel needs to be replaced. This is outside the scope of the home inspector.” No vote is recorded. Just talk. Where that idea ever came from remains a mystery. KRS 198B.700(6)(b) requires a home inspector to include his recommendation to “repair.” Replacement is a form of repair, just like replacing a dented fender to repair a car after an accident. “Repair” means to “restore to sound or good condition.”
At the board’s October 9, 2007 meeting, Mr. Leathers was back. “The Board will draft a letter for the Electrical Inspection Division and the Electrical Advisory Board about the home inspectors looking at FPE Panels. More discussion on the FPE panels,” the minutes reported. Again, no board vote. No letter appeared, unless AB1 was it.
AB1 appeared on the KBHI web site, dated December 3, 2007. It said it was from the KBHI “In Cooperation with the OHBC Electrical Advisory Committee.”
But no KBHI vote on the bulletin is recordedin the board’s minutes before AB1 appeared.
There’s no KBHI vote approving AB1 recorded in the KBHI minutes after the fact either.
Minutes of the board’s meeting December 4, 2007 (the day after the web posting) say only “Detailed discussion Advisory Bulletins. Also discussed the Standards of Practice for Kentucky Home Inspectors. Discussed the Heat Exchanger. Discussed putting together an Advisory Bulletin between KBHI and the HVAC about the Heat Exchanger.” Not a word about FPE – or any vote on AB1. (All of these minutes were corrected and adopted by board vote long ago.)
In other words, AB1 is not, and never was, a board action of record. A vote in favor by a majority of the KBHI members was required to take action, under the board’s statute at the time.
The closest the KBHI minutes came was the October 9 mention that “the Board will draft a letter for the Electrical Inspection Division and the Electrical Advisory Board about the home inspectors looking at FPE Panels.” The KBHI did not vote on any “draft letter” either, according to its minutes.
Pause here. What do we, or don’t we, have here – at this point?
First, what we do not have is a KBHI action.
We also definitely do not have a regulation either. An “administrative regulation” is any “statement of general applicability” issued by a board “that implements, interprets, or prescribes law or policy, or describes …practice requirements.” KRS 13A.010(2). To become effective, a regulation must be “adopted” in accordance with the provisions of KRS Chapter 13A. AB1 was not. But it should have been – it says it’s an interpretation of law or policy with practice requirements – especially if a license holder would be disciplined for not following it.
Regulations must be adopted in very specific steps, including notice, public comment and a hearing, under KRS 13A. None of the required steps were followed. Even if the board correctly set up its FPE theory as a regulation, it could not be “effective” today, or when Ricardo was disciplined earlier this month.
Obviously, then, we also do not have a “rule” that could be the basis of disciplinary action against a KBHI licensed inspector. The board’s regulation on “disciplinary actions,” 815 KAR 6:030 §3(1), is clear that the board only may “impose penalties” for “violations of the administrative regulation.” Whatever else AB1 might be, it definitely is not either an administrative regulation, or “the” regulation to which 6:030 §3(1) refers.
Consequently, what we also do not have is any rule that an inspector could be disciplined for “breaking.” Home inspector discipline is reserved for violations of mandatory rules, like laws and regulations, not “advice,” especially not “advice” the KBHI never even voted to adopt.
AB1 says it is “advisory.” That’s the most it could be.
But it couldn’t even be board advice.
Whatever It Was
It Lit A Fire
No KBHI action or non-action ever before provoked anything like the storm of criticism and alarm that followed posting Advisory Bulletin 07-001. It’s still rolling in.
The KBHI responded by studiously ignoring it for the last year and a half.
Stacks of papers kept arriving. Studies and research reports arrived. Some were fairly recent (though small-scale) studies, like 2005 and 2007 reports on FPE breaker burnouts and panel overheating. KBHI members did not bother to read it. The board did not form a committee to study it. Apparently, the KBHI did not want its first “advisory bulletin” spoiled by the facts.
Before July’s misbegotten “reprimand” of a home inspector who did a good job – and even followed AB1 to the letter, unlike the board – most of the AB1 discussion was provoked by Dr. Jesse Aronstein, an electrical engineer who runs a forensic lab in Poughkeepsie, NY. He was like a junkyard dog gnawing on a bone; he just would not let go. The board, evidently including its inspector members and staff, had not heard of Mr. Aronstein. (He is a leading crusader to get FPE safety info out to the public. The board inevitably would have heard his name researching any “documentation,” current or otherwise, on FPE, if it did research “documentation.”)
The Aronstein Saga
Document after report after research study flowed in from Mr. Aronstein, including several of his own. In the end, he zeroed in on finding some acceptable FPE reporting language. The board kept shooting his ideas down.
For a while, it looked like there might be just a little improvement.
The board seemed to be saying that his proposals to describe key parts of FPE history would be OK; just that the report could not say “removal” – the inexplicably radioactive word used in AB1. Call it the “R word.” A clean, informative model reporting statement, without the R-word, might help clear up some of the confusion. Trouble is, they could not agree on one.
By May, though, the board had its fill of Mr. Aronstein. The board has shown a distinct discomfort with public comment, or any suggestion it might be subject to error like mere mortals. One board member at the time even sent out an email saying it was a “courtesy” to let the public attend its meetings – not a legal right.
In a Feb. 2, 2009 letter, Mr. Aronstein proposed reporting language that cited key FPE documentation (like the New Jersey fraud judgment against FPE, Reliance’s SEC filing saying FPE fudged lab reports, and a 2007 report by Mr. Aronstein on “Hazardous FPE Circuits”). It also proposed saying that “…it is my opinion that replacement of the FPE Stab-Lok panel(s) in the home would be justified in the interest of electrical fire safety. It is important to note that the defective circuit breakers cannot be identified by visual inspection or any other means commonly employed by inspectors or electricians.” (There were some goofy elements in the proposal too, like saying the inspector would enclose “copies” of those documents with the report. Sure.)
KBHI’s staff attorney wrote back April 29 that the KBHI “has no objection to a home inspector providing information on the history of FPE electrical panels.” That was a little help. But the letter went on to say “the board reiterated that a home inspector cannot under state law require the removal of the panel….and any inspection of a panel in question should be performed by a certified electrical inspector.” The letter did not take the trouble to cite any such Kentucky “law” (that was coming up, sorta) or the source of the muddled claim that “any inspection of a panel in question should be performed by a certified electrical inspector.” Did that mean home inspectors should avoid looking at FPE panels? It was mystifying. By the way, what’s a “certified electrical inspector” — a code inspector — doing here anyway? If a home inspection report was that sloppy, the KBHI probably should require additional CE.
“It gets curiouser and curiouser,” as Alice said in Wonderland.
Mr. Aronstein wrote back on May 14. Once again, he proposed basically the same reporting language. The only change was adding a phrase that said the New Jersey ruling found fraud also in “(UL) labeling of their circuit breakers.” True enough. But it kinda missed the point of the staff attorney’s letters, though none of those letters ever were approved by the KBHI or made part of the meeting minutes.
This time, the staff attorney opened up on Mr. Aronstein.
The staff attorney’s reply, May 22, repeated the idea that inspectors could report the “history of FPE panels.”
But this time – reacting to basically the same words from Mr. Aronstein as before – the staff attorney wrote that “your verbage, including such words as ‘hazardous,’ ‘fraud,’ and ‘deceptive and improper,’ could put the home inspector in a precarious position for liability.”
Maybe the staff attorney failed to notice those words he mentioned all came directly out of the New Jersey court’s ruling against FPE. That court did in fact make findings that FPE engaged in “deceptive and improper” “manufacturing, certification, and testing” practices to obtain UL listing by “fraud” even though the breakers were “hazardous” (see, “The Real FPE Story” in this bulletin for details). So let’s get this straight: It’s the KBHI staff attorney’s learned opinion that an inspector’s professional opinion quoting a final court decision (that awarded millions of dollars to homeowners to replace their FPE panels) somehow “could put” an inspector “in a precarious position for liability.” Really? For what? When did it become a “precarious position” to quote a court that heard years of evidence and expert opinion? Isn’t that why court decisions get printed? So people can quote them. Dumbfounding though it was, the letter sure made the point the KBHI would enlist any excuse to avoid saying AB1 simply was a mistake.
Code Amnesia at the KBHI.
That wasn’t enough.
This time the staff attorney tried to improve on his April 29 letter. He began by taking the trouble, this time, to cite a law. (Please remember that the attorney’s April letter said “a home inspector cannot under state law require the removal of the panel” and then left everybody guessing what law he might of be talking about. It still would be nice to know. There’s one long-shot possibility, but it’s not a law the KBHI has any authority or power to interpret, administer or enforce under KRS 198B.706, which sets out the KBHI’s powers. Of course, that couldn’t be it. Could it?)
This time, the attorney’s May letter ducked that question, but at least it named a law. Any law. The staff attorney wrote in May that KRS 198B.738 (prohibiting inspectors from saying a condition is or is not in compliance with “any building code enforced under KRS Chapter 198B”) prevented inspectors from using Mr. Aronstein’s proposed statement – because “a client could infer that FPE products were not in compliance with applicable electric codes. This is not the case.” Since this directly contradicts the one court that ruled on the point, it would help to know the staff attorney’s authority for claiming “this is not the case.”
There’s another small, minor detail. It’s impossible to break KRS 198B.738 by saying anything about whether FPE panels were installed, as the statute says, “in compliance with any building code enforced under KRS Chapter 198B.” Why? Because there was no KRS Chapter 198B when FPE panels were installed in Kentucky. It was impossible for any FPE panel to be, or not to be, in compliance with any code “enforced under KRS Chapter 198B” since there was no code enforced under Chapter 198B until later and there was no KRS Chapter 198B. There was no such thing as “compliance” with a Chapter of Kentucky law that did not exist then. This sounds like a textbook case of non-inspectors assuming there always was a code and homes always were built under codes. Not.
Frankly, a reader “could infer” for this that someone there might be code challenged.
For starters, the Kentucky Residential Code has only been mandatory in Kentucky since 1998 – more than a decade after the lights went out at FPE. Building codes have not always been here. People began building homes here more than two centuries before the first Kentucky electrical codes.
Second, KRS Chapter 198B only was created in 1978. By June 17, 1978, the effective date, Federal Pacific was less than a year away from being bought by Reliance, when what the court called FPE “fraudulent” code compliance (elsewhere, like New Jersey) ended. Practically all the FPE panels already were installed here before KRS Chapter 198B was created, or any code was enforced under it – and it would be two decades before the KRC became mandatory.
In other words, a client probably would be right if he did in fact “infer” that FPE panels installed from the 1950s through 1982 “were not in compliance with applicable” codes “enforced under KRS Chapter 198B” – whether or not the inspector said a word about it – since there was no KRS Chapter 198B to enforce before mid-1978. Since the client would be correct, what’s the problem if a client “could infer” the truth? Inspectors just don’t want clients to be “dead right,’ so it would nice to focus all this legal firepower, and our tax and license dollars at work, on protecting the public instead of making a show of code amnesia.
OK. Let’s put a wrap on this idea. The KBHI staff attorney’s considered legal opinion is that a client – correctly – “could infer” that “FPE products were not in compliance with applicable” codes “enforced under KRS Chapter 198B” – since KRS Chapter 198B did not exist then — and that somehow that entirely factual statement means the client’s home inspector violated KRS 198B.738? Pleaaase. Return to “Go.” Do not collect $200.
Third, even today – well after codes enforced under KRS Chapter 198B became madatory in 1998 – we also do not have uniform enforcement of the KRC because 80 of 120 counties do not have building departments. In the counties without code enforcement, code compliance on houses is left to the builder or chance. Talking about code compliance has nothing to do with FPE safety, or its history of falsified tests and actual failures.
cont. next column
cont. from 1st column
Fourth, it’s worth remembering building codes are not for buildings; they are for the construction of buildings and their systems. Even after 1998, the phrase “any building code enforced under KRS Chapter 198B” does not refer to any one code. It includes several different codes, such as the Ky Building Code, KY Residential Code, National Electrical Code, International Mechanical Code, Intl Energy Code and on and on. Those codes apply to construction. It’s not just home inspectors who should be prohibited from indicating orally or in letters than any condition is or is not in compliance with any building code enforced under KRS Chapter 198B.
Never mind that the word “code” is nowhere in Mr. Aronstein’s proposed statement. That’s why the staff attorney waffled with that “could infer” phrase. All this “could put,” “could infer,” “could,” “possibly,” “maybe” talk is the kinda of guesswork that fills the vacuum created by the absence of legal research and authority. Ultimately, anything is “possible” (or “could” happen). But in the real world of courts, administrative regulations and disciplinary action, either there is a rule, and breaking it is wrong, or not. Evidently, the staff attorney was unaware that clients “could infer” standards that home inspectors use to call deficiencies have roots in a code, and other sources, in many cases. Original KBHI inspector-member Forrest Cooper taught classes on code standards for years, so home inspectors could stay posted on the latest safety requirements. Inspectors just don’t use the word “code” because they aren’t doing a C.O. “code compliance” inspection, they’re doing an after-market inspection, and they aren’t really interested in the construction, they’re inspecting the condition.
Finally, let’s not forget that a key point of the New Jersey decision was that FPE could not be in compliance with code when installed by using faked testing and UL certification. If the staff attorney actually looked the question over, or read the case, and prepared a memo of law concluding, contrary to precedent, that FPE electrical devices were in fact “in compliance with applicable electric codes” even though their testing, manufacture and UL certification was fraudulent, it would be fascinating.
Back to the May letter. Not to miss a trick, in the May letter the staff attorney repeated that muddled line from his April 29 letter saying that “any inspection of a panel in question should be performed by a certified electrical inspector” — who, of course, would never show up if a homeowner asked for a code inspection. It’s a small point about the Fourth amendment. Once a home gets a C.O., the code inspector is done (unless a permit is pulled for a repair or remodel).
Last, hardly least, the staff attorney’s May 22 letter uncorked a completely new, previously unheard-of idea: “Given KRS 198B.738 and the previous opinions of the board, a home inspector may be subject to disciplinary action for using your proposed reporting statement.” Enough’s been said on the KRS 198B.738. Given that KRS Chapter 198B did not exist while FPE panels were being installed, it is impossible to violate KRS 198B.738 even by bluntly saying FPE panels were not installed in compliance with any code enforced under KRS Chapter 198B. It’s a scratch at the starting gate. And what “previous opinions of the board” are there? There are no “previous opinions” on the kind of reporting language Mr. Aronstein proposed. Maybe it’s just loose lips, meaning clumsily to refer to previous letters to Mr. Aronstein. But, then, how could “a home inspector … be subject to disciplinary action” based on some unpublished, basically private letters? Inspectors never saw them. And how could they be an opinion “of the board” if the KBHI never voted on them?
More importantly, the law is clear here. KRS 198B.728 is unambiguous that licensed home inspectors may be disciplined for only two things – (1) failing to comply with any provision of KRS 198B.700 – 738, or (2) failing to comply with any “regulation” promulgated under those statutes. Not failing to read letters by ESP. Not failing to bow to some “advisory bulletin.” And not anything the board feels like it. Just two things, and two things only: breaking a law or breaking a regulation. To borrow the staff attorney’s phrase, “this is not the case.”
Since the end of 2007, the storm around AB1 centered on the lack of documentation supporting AB1, half-truths of AB1, its sad failure to protect the public, and its intrusion on the rights and duties of home inspectors to freely speak their “professional opinions.”
Until now. This is the first comprehensive look at the law governing KBHI discipline, regulation/rules, and so-called “advisory bulletins, as well as the checkered history of AB1, complete with a line-by-line, word-by-word exam of that misguided “advisory.” (Bear in mind: misguided is the most likely output from government when it acts in secret, without public comment, the way AB1 came about.)
It’s all covered here – along with all the FPE documentation, all the stories and legends swirling in the log-running FPE debate, and a close-up on the KBHI’s unprecedented, and almost certainly unlawful, disciplinary action against a home inspector last meeting. You don’t get this anywhere else. But if you don’t get it, you might be the next inspector to get zapped with a KBHI bolt of discipline from nowhere.
Here is exactly what AB1 says, by paragraph, with comments summarized from home inspectors in Professional Learning Institute classes
Paragraph 1
“There is no current documentation from any source that states the FPE panels and breakers are a hazard to life and property solely because of the name of the manufacturer. To assume so without current documentation is incorrect and irresponsible.”
Comment: Talk about half-truths! Exactly what could “current documentation” mean – about a company (FedPac) that ceased operations nearly 30 years ago?
· Does that mean all the documentation from the 80s and 90s should be ignored, or concealed? Does that include the 5-6 violations of modern codes that would prevent it from being installed today if it were still made? Does “current documentation” include the 2002 court ruling that FPE engaged in “fraud” and faked lab result to meet the code then? AB1 is silent. It knows no “current documentation” (yeah or nay) either.
· No one says FPE panels are a “hazard” “solely because of the name of the manufacturer.” In order to protect and serve the public, inspectors sometimes render their opinion FPE panels are a deficient or a safety hazard because firemen call them “welders,” courts call them “consumer frauds,” Underwriters Laboratories delisted FedPac for gaming its tests, FPE panels could not meet code today, many insurance companies won’t insure homes with FPE panels today, and even the company that bought FedPac sued it for faking code compliance back then, among other reasons. Using a brand name to identify a product is exactly why brand names exist.
· One KBHI approved SOP, for example, requires inspectors to “identify observed material defects” and says a “material defect is a problem … that would have a significant adverse impact on the value of the property or that involves an unreasonable risk to people on the property” (InerNACHI 1.1, 1.2). It also defines “unsafe” to include a condition which “is judged to be a significant risk of personal injury during normal … use. The risk may be due to damage, deterioration, improper installation, or a change in accepted residential construction standards.” 4.40. If an inspector’s opinion under that SOP is that FPE equipment significantly hurts the value of the house, and is an unreasonable risk, highlighted nonconformity with today’s codes, the inspector must report that “truthfully” under Kentucky law, KBHI regs and the SOP. Is that what AB1 says?
· By the way, is there any “current documentation” that FPE devices are safe? Is there any “current documentation” at all about FPE? The board did zero research to locate whatever it meant by “current documentation.” But there is fascinating material and test results newly being made public in court cases where records had been sealed for years. If the board just assumed there was “no current documentation” because the stuff is so old or one guy said so without checking,boards teach more by what they do than what they say, like the rest of us who are parents learned long ago.
· The points above are not “assumptions.” They are facts any professional opinion should consider, including the KBHI.
· Is it “correct” and “responsible” to conceal, or fail to disclose, those facts for clients?
· It may be “incorrect” to make assumptions, just as it is incorrect for the KBHI to assume inspectors are expressing assumptions, rather than facts, about FPE.
· But it is unlawful for the KBHI to violate inspectors’ duty to render their “professional opinion” under KRS 198B.700(5) and freely speak their opinions. Opinions are thoroughly protected by the First Amendment.
· Neither the word “incorrect” nor “irresponsible” comes from the SOPs or the KBHI Standards of Conduct (SOC). Yet doing a good job following the SOPs and SOC means giving clients an informed and unbiased opinion of FPE devices (more below).
Paragraph 2
“To require or recommend the removal of FPE panels solely on the basis of the manufacturer’s name and without visual evidence of a specific hazard is irresponsible and could cause the homeowner undue financial hardship.”
Comment: Recommendations under Kentucky statute or the SOPs are not restricted just to “visual evidence of a specific hazard” No SOP says that the sole basis for recommending repair, as in KRS 198B.700(6), is “a specific hazard.” The opposite is true. Instead, the statute, reg, and the SOPs all refer to the “professional opinion” of the inspector. The inspector’s assessment of risk probably is more important daily than tripping over a visible hazard.
One SOP definition of “material defect,” for example, includes systems or components with “a significant adverse impact on the value of the property” or “unreasonable risk.” InterNACHI 1.2.
Inspectors help protect the public from “risk,” far more than “evident specific hazards.” Car insurance, for example, is not sold based on evident specific hazards; it is based on experience and information about “risks,” like car model, driver history, cost of repairs, equipment failure history, etc. The standard in AB1 recklessly ignores risk and paragraph 2 is foreign to our SOPs. Neither the KBHI nor AB1 have any authority to confine the national SOPs adopted by state law, not even by regulation.
· Inspectors may also recommend “repair” (including replacement), under KRS 198B.700(6), because the only adequate testing of FPE panels is more expensive than replacing them with modern 200 amp service, electricians do not perform those tests (electricians are advised to refer such testing to licensed engineers), and Stab-Lok replacement breakers are so expensive it’s more economical and safer to replace the whole panel with modern equipment. Since most FPE panels are100 amp, which is borderline at best in today’s homes, replacing FPE panels also removes a negative impact on home value. Safety issues aside, these facts alone adequately support an inspector’s opinion to repair or replace FPE equipment. It doesn’t take an electrician to know those facts. If a newspaper reporter could say it, and they can, so can an inspector — without banging into some precious electrical licensing turf.
· The majority of the specific hazards reported in FPE devices are not visible. Taking AB1 literally would be a “turn a blind eye” standard. FPE’s Stab-Lok breakers burn out from the back forward, for example (photo above). That’s not visible unless the breaker is removed. Removing breakers definitely is beyond the scope of any SOP. Stab-Lok failures to reset, or to trip on overcurrent, are not visible and are fairly unpredictable. Even if a Stab-Lok breaker has failed to reset, and appears “off,” home inspectors are not supposed to test it (and simply resetting would not be a good test though it would be risky). By the way, you can’t “see” heat either.
· Of all the hazardous conditions reported in FPE breakers, only one unsafe condition is visible without dismantling. FPE breaker toggles in the “on” position often are out of straight line, in a “jagged tooth”-type pattern (a panel being tested illustrates these jagged rows below). Typically, this shows lockup, failures to reset or improper breaker seating; it also can result from clogging and age. Mr. Leathers believes panels like that should be replaced, since the cost of live current testing or replacing FPE breakers usually is more than installing a modern panel. We agree.)
· Of course, inspectors make recommendations on FPE equipment based on decades of experience with the gear, and plenty of public information about FPE problems – not “solely” on the basis of “the manufacturer’s name.” It’s on the basis of the history of the equipment. But are we supposed to ignore the manufacturer’s name and keep the public in the dark about the equipment history?
· As for “financial hardship,” policy-level boards have to ask questions like: “Is the cost of removing 20 functioning FPE service panels, spread over 20 homeowners, substantially outweighed by the costs of one home burning with people inside?” We do not put seat belts in cars because every car or driver is bad; but we charge every car and driver the smaller price of seat belts so we can save lives, reduce injuries, and lower property damage overall. AB1’s view of “economic hardship” takes the side of saving one homeowner $1,000 for a replaced FPE panel, at the cost of the injuries, property damage, danger, and taxpayer fire expense of a house burning with FPE gear. That’s basic “penny wise, pound (or dollar) foolish.” AB1’s unsophisticated version of “economic hardship” does not protect the public (or the economy); it puts the public in peril.
Paragraph 3
“If a visual inspection of the interior of the panel or breakers indicates arcing or extreme heat then the licensed home inspector should most certainly recommend further evaluation by a Kentucky licensed electrician.”
Comment: No kidding! That’s true for any panel. It has nothing to do with FPE in particular.
· Arcing or extreme heat would at a very minimum require a recommendation for further evaluation. It probably also would be an “imminent danger to life or safety” requiring disclosure to occupants exposed to the hazard and others. 815 KAR 6:030 §2(8); ASHI Code of Ethics 2.C (incorporated in ASHI’s SOP by 2.2.A); InterNACHI (Code of Ethics 1.7). In that case, is AB1 saying to “just let her arc and heat up” while somebody tries to find an electrician after they get the report? If the house burns in the meantime (this actually happened to one Professional Learning Institute student, who called in a panic), will the KBHI cover the loss?
FedPac Panels
Paragraph 4
“The Kentucky licensed electrician is the only authority to determine the appropriate action.”
If this is an attempt to interpret Kentucky law on licensed electricians, it plainly is outside the power and authority given the KBHI in state law. That’s not the KBHI’s job.
· In fact, the actual “authority” to determine any action is the homeowner.
· A home inspector must, at a minimum, report on any system or component that, in the inspector’s “professional opinion,” is significantly “deficient” and then include the inspector’s “recommendation to repair or monitor deficiencies.” Indeed, the “purpose” of a home inspection under Kentucky law is to provide “a professional opinion” by a licensed home inspector. KRS 198B.700(5), (6). The inspector is the only “authority” to carry out that law.
· Inspectors do not “determine” any action, “appropriate” or otherwise, of course. To suggest they could or do is a disservice to the public and the profession. Inspectors provide professional opinions and explanations to help clients “determine the appropriate action.” The client’s appropriate action may include hiring an electrician for further evaluation, as Ricardo recommended, or not buying the home, as in the complaint against Ricardo, for a variety of reasons, which together did not require the additional expense of an electrician.
· A Kentucky licensed electrician cannot be the only one to “determine the appropriate action” when an FPE panel is present. For example, an electrical engineer could aid the owner too. If it’s an immediate safety hazard, inspectors have a duty to protect those in danger, including disclosure to the owner (even if the client is a buyer), as mentioned above.
· The truth is, Kentucky licensed electricians practically never do anything more than a visual inspection either. Most would rather replace a FPE panel than touch it. Probably that’s “solely on the basis of the manufacturer’s name” and their experience.
· In fact, almost no electricians have the means to properly test FPE panels. The Chief Electrical Inspector, Mr. Leathers, agrees such testing should be carried out by an electrical engineer, not an electrician. But you’d never know it from AB1.
· So, when you blow the foam off the beer, what the KBHI really is saying is we should impose a financial hardship on homeowners by telling them to hire two people to do the same look-see and almost always give them the same recommendation – and then replace the FPE with a modern 200 amp panel. This is not rocket science.
· We can only hope the KBHI is not trying to tell inspectors to fail to disclose what they know, or conceal information from clients – since the state laws requiring SOPs and all three board-approved SOPs require inspectors to be “truthful” and “objective” and give their opinion, not someone else’s. It’s tough be sure that’s true from AB1.
There should be no doubt.
Paragraph 5
“To assume all FPE devices are unsafe and a fire hazard without current evaluation by a Kentucky licensed electrician is not within the scope of a home inspection.”
Comment: Bluntly, the only glimmer of hope that this might not be totally false is the opening phrase, about “assuming.” But inspectors do not “assume,” and the KBHI should not suggest they do. Inspectors render “professional opinions” flowing from conclusions based on objective, physical facts and their knowledge about those systems and components. Rendering opinions components are “unsafe” (“fire hazard” barely appears in the SOPs), or present a risk, “without current evaluation” by anyone else, is exactly what home inspectors are required to do.
· Not one KBHI-approved SOP requires a home inspector to base any opinion of an “unsafe” condition on “current evaluation” by anyone else.
· Kentucky law, regs, and all three SOPs require inspectors to express an opinion “only” when it is based on the inspector’s, and no one else’s, information, training and experience. For example, the KBHI regulation on Standards of Conduct affirmatively states “A licensed home inspector shall…express an opinion on any aspect of the inspected property only when that opinion is based upon the experience, training, education, and personal opinion of the inspector.” 815 KAR 6:030 §1(3); see also NAHI Code of Ethics #3 (incorporated in its SOP by 1.12); ASHI Code of Ethics 2.A (incorporated in its SOP by 2.2A).
· All three SOPs require inspectors to be “honest” and “truthful,” which should include telling clients the truth as they understand it about FPE panels. The KBHI is mandated by law to require all licensed home inspections “be conducted in accordance with” these standards. KRS 198B.706. AB1 flies contrary to this requirement. The board cannot change the law – only the legislature can. Its duty is to follow the law.
· Just for the sake of discussion, assuming an opinion on FPE safety risk has a remote chance of being outside the scope of a general home inspection, what’s wrong with an inspector doing more than the “minimum” (as the SOPs put it)? All three SOPs say their “scope” sections “are not intended to limit inspectors from performing ‘additional inspection services.'” NAHI; 1.12; ASHI 2.3.A; InterNACHI 1.1. So, if an inspector gives his opinion of FPE devices and it is “not within the scope of a home inspection,” no SOP forbids it. Remember, the SOPs are in Kentucky law – that the KBHI must follow.
Paragraph 6
“ALL KENTUCKY HOME INSPECTORS SHALL REVIEW THEIR REPORTS FOR COMPLIANCE WITH THIS ADVISORY BULLETIN.”
Comment: You’re kidding, right?
Ungarbling
What Advisory Bulletin 07-001 Says
AB1’s text is a puzzle, wrapped in the mystery of its birth.
It’s not just that we don’t know where it comes from. It’s not just that the KBHI has never clued in anyone on what “advisory bulletins” are – and seems to be making up the answers as it goes along.
Most of all, it is that AB1 is baffling partly because (1) it is practically impossible to square with either the FPE facts or Kentucky inspection law, regs and SOPs, and partly because (2) it reads like a foreign language with terms alien to home inspection law, regs and SOPs.
For starters, AB1 offers no facts – either facts found by the KBHI or by any other tribunal. It mentions no sources or research. It literally just appears, in a factual and legal vacuum, and pontificates. It speaks of “documentation,” but seems totally unaware of the extensive “documentation” on FPE that is of record (see “The Real Story” above). It offers no documentation of its own. Not one FPE “document,” or factual source, is cited. It’s as though FPE was not really what AB1 was about; electricians were.
It sounds like what AB1 really means to do is give advice about what Kentucky licensed electricians do (like, electricians recommend removal of FPE panels, home inspectors do not).
But, of course, the KBHI has absolutely no authority to do that — for several reasons.
First, the KBHI can only administer and enforce home inspector laws (KRS 198B.700 to KRS 198B.738), the regulations under them, and exercise the powers “specifically conferred” on the board, under KRS 198B.706. It has no power or authority to interpret electrical licensing laws, or any other license but home inspection. So that can’t be right. But, then, why would the KBHI say a word about the “authority” of Kentucky licensed electricians, as in AB1 paragraph 4?
On the flip side of the coin, the Electrical Advisory Committee has no authority under law over home inspectors.
Since the whole mess started when OHBC’s Chief Electrical Inspector showed up at a KBHI meeting, it makes you wonder. Since the KBHI has never stood up to one other state board on any home inspection issue yet, the odds are not long that it just gave up when the electricians whispered sweet nothings in its ear. It would be just as wrong to leave AB1 soiling the footpath. Two wrongs will never make a right.
If it wants to protect the public, why not propose that any electrician who believes a FPE is safe should just write that on a piece of paper, sign it and give it to the homeowner? On maybe the Electrical Advisory Committee could just insure homeowners against any damage or injury from FPE panels. Let’s talk about protecting the public here, not muzzling inspectors.
Then AB1 leaves implementation to the imagination. For example, will the KBHI insure an inspector who follows AB1 against claims he thereby violated state law, the regs and his SOP? What happens if an inspector does not take AB1’s gratuitous advice?
AB1 consists of just six short paragraphs, not one of which helps home inspectors. It uses words like “incorrect” and “irresponsible,” foreign to inspection law, regs and SOPs, and then it never says what would be “correct.” It avoids offering “safe harbor” reporting language. (To avoid violating First Amendment free speech rights, some administrative agencies announce they will take no adverse action if certain “safe harbor” language is used.).
It’s a “litigation ticket.” It creates the opportunity for plaintiff’s lawyers to beat inspectors over the head with it, even though it’s not mandatory, just “advisory.”
It has been trouble from the start.
Nothing could be more mistaken, contrary to law, and unfounded in fact than to now begin making it a trumped disciplinary trouble too.
FedPac Advisory – GONE!
The Kentucky Board of Home Inspectors (KBHI) bit the bullet at its November meeting.
Its notorious Federal Pacific Electric Co. “Advisory Bulletin” bit the dust. It is no more. Good riddance!
In fact, all the “advisory bulletins” were “trashed, …done away with” as vice-chairman Mike Patton put it during the meeting.
The vote to rescind all the “Advisory Bulletins” was unanimous.
“Basically there will be no more advisory bulletins,” Patton said. The decision was overdue.
The Board administrator will remove them from the KBHI web site. (Only one other advisory bulletin was approved, in February, 2009. It was an eager beaver bulletin trying to mandate a contract clause for home inspector contracts based on KRS Chapter 411. The Board, obviously, has no legal authority to interpret or administer anything in KRS Chapter 411 – or any other part of Kentucky law outside KRS 198B.700-738. And disciplining an inspector over such a thing was out of the question).
Rest in Peace. Fini. Over and done. Now you can call ’em as you see ’em.
The unlawful “reprimand” of a hard-working inspector who supposedly broke the FedPac “advisory” was rescinded earlier. We nicknamed him “Ricardo” in our newsletter on the “reprimand.” His “thank you” note was among the largest mail responses Professional Learning Institute (“PLI”) ever enjoyed for our newsletters. (A representative sampling is reprinted in our “Readers Reply” column below right.)
Several inspectors writing in made a good point. When push came to shove, Ricardo was hanging out there alone, twisting slowly in the wind.
Only PLI stood up for him and said he did his job. Only PLI said the Board broke the law, not the inspector.
No national association helped the guy. The so-called Kentucky “association” went mum. In fact, the KBHI board member who moved to “reprimand” Ricardo based on the unlawful “advisory bulletin” actually was a director and former President of KREIA! The truth is that neither KREIA nor even one of the national associations has ever supported an inspector in trouble at the KBHI, or told the KBHI it was making a mistake. Not one. Ever.
Not one of them even backed PLI after it stood up for Ricardo and explained where the Board went wrong, or sent out our carefully detailed newsletter explaining the situation. (KREIA asked for, and received, permission to reprint the newsletter free, but if it actually did, it never sent us the promised reprint copy.)
Call that your dues dollars at work. Those “associations” charge “dues,” for somethin’. PLI charges no “dues” — never has, never will. Maybe it’s worth asking exactly where those dues dollars are going, if it’s not “inspectors helping inspectors” and they won’t drop a dime when a dues-paying “member” is put upon. If you find out, drop us an email. We’ll pass it along. It was expensive and time consuming for PLI, not to mention Ricardo, to cope with the Fed Pac “reprimand” problem. But we did. We didn’t have to, but it was the right thing to do. So we did, free of charge, free of “dues.”
Still, from day one, PLI always contributed what it could to help the profession and the Board. (We do not want PLI staff to be on the Board, since it would be an unethical conflict to regulate our own courses and such.) PLI is the first and only CE Provider the KBHI “recognized and thanked” (Aug. 11, 2009 Minutes) for donating class materials for the Board’s use. And everybody knows PLI’s Steve Keeney, the inspector and attorney who teaches PLI’s Law & Regulation courses, is the only Law & Regs instructor who attends every KBHI meeting. Check the KBHI’s minutes (bhi.ky.gov) to see the last time any other Law & Reg instructor was there. If you’re not there, you can’t know first-hand or help.
The Apologies
To its credit, the KBHI owned up to its “advisory bulletin” mess.
It did not have to.
“Are you saying take them away because they were illegal to start with?” outgoing Board member Bill Welty asked at the meeting.
“Basically yes,” Chairman Green answered. You got the feeling Mr. Welty wanted it said out loud at the November meeting.
Still, no one had to admit they were wrong and PLI was right when it called the action illegal all along. They could have just buttoned their lips and wiped the slate clean without a word of explanation. (The one thing it could not do was discipline another inspector on an “advisory bulletin.”)
Chairman Green also apologized to the Board earlier, and a group of home inspectors at an October CE seminar, for a number of the Board’s other illegal activities, even before the “advisory bulletins” were “trashed.”
He didn’t have to do that either. But our hat’s off to the man.
Those October apologies came out of the board’s illegal ethics “investigation” of its own members who were also KREIA leaders – the same board members who voted for the FedPac “reprimand.” When the board hid it in secret meetings, Steve gave them a heads-up that was unlawful. The board did it anyway. Finally, the Attorney General issued a written ruling that each and every point PLI raised about the illegal actions was correct. The board had violated around a dozen of those open meeting law rules too. (The board never went back to do a for-real investigation and get it right. Instead, it shifted investigating ethics to the Executive Branch Ethics Commission. That’s another step in the right direction. No matter how straight up anyone is, investigating yourself never passes the smell test.)
The apologies were the right thing to do. Not the easy thing, but the right thing. PLI does not take sides; it neither supports nor opposes any causes. It does not matter whether the Board’s right or the inspector is right or someone else is right. All PLI cares about is what’s right. We don’t support or oppose Chairman Green (or any other Board member), but when he’s right, he right.
When the Board gets it right, we’ve consistently been the first to say so. In fact, this PLI newsletter has reported KBHI actions longer than anyone anywhere – and every inspector gets it free for the asking. (PLI alums also get a special second bulletin with more info.)
With the intestinal fortitude it takes to publicly apologize to the KBHI and to a gathering of home inspectors, Chairman Green surely did the right thing.
What counts, of course, from now on, is walking the walk, not just talking the talk. We’re rooting for him, and all of ’em – and we’ll be there to help with our dos pesos worth.
When you’ve been teaching this as long as PLI and its faculty, it’s not the first time you’ve seen a spankin’ new, green board goof up. And, you guessed it, nobody has been teaching this stuff longer than PLI in Kentucky.
Maybe this growing experience will lead the Board now to be a little less self-righteous and a little more understanding of inspectors who work hard but trip over some technicality.
This Is How Boards Grow and Mature
Really, all this is just part of the natural evolution of rookie boards growing into seasoned, skilled boards. Every new board matures and develops in each licensing board state, as Texas and Connecticut did starting years earlier. Like our kids, when they’re young, boards think they know it all. As they mature, they learn how much they have to learn – about everything, from being a state agency, to licensing, to pontificating, and even to budgeting. (Believe it or not, the KBHI never even had a budget, and now barely has a draft! But it had about $180,000 of your money sitting around looking for something to do.) Growth does not have to be this hard, or involve serial law-breaking, though. Boards avoid mistakes by learning to tap what other older boards learned, like their state Real Estate Commission and finance boards and home inspector licensing boards in other states. That hasn’t really started happening here yet. But we’re really looking forward to it.
Boards also start protecting the public by getting serious about protecting home inspector licenses. They stop trying to interpret other license laws and start doing what they’re good at – enforcing their own license. All those reports that look like and act like home inspection reports, but get churned out by cheap, unlicensed writers, get checked to see if a home inspection license is required. There are plenty. HUD, FHA and the Kentucky Housing Finance Authority, as examples, all use long reports that look like and quack like home inspection reports – but are not done by licensed home inspectors. Home buyers get the idea they really are home inspection reports, so they never get their home inspected, often with sad consequences. The KBHI took a look at a HUD one in May, and a Kentucky Housing Corporation Assessment Form way back in Oct., 2006. Both times, the Board decided they sure looked like a home inspection report; normal people probably got misled into thinking so, even though it was cranked out by unlicensed writers; and … then did nothing. It’s a problem with which every board sooner or later has to come to grips.
Mature boards also protect the integrity of their own processes, like making sure inspectors get their money’s worth (whether the money is called tuition, dues, membership or anything else) for their CE courses, instead of just clocking time. Green board excuses about wanting “choice” gets a new chapter – choice is good, for the public and the profession, only if you actually learn something. They weed out junk “distance learning” CE courses that are basically fake, “pay your money and get your credit” courses. Accredited online courses take their place, as they have at the mature Kentucky Real Estate Commission, the U.S. Department of Education and most businesses. This board is clueless there still. Mature boards build disciplinary systems designed to protect all parties and hold everyone involved accountable, including themselves, first by operating like courts, in public for all to see, and publishing full accounts of cases to guide the public and the profession. This board does not even have a disciplinary procedure beyond “we’ll take a complaint and if you don’t like the decision you can appeal.” Seriously. No right to be heard, no complainant notice of a defense or chance to reply, no right to have a lawyer or a witnesses. Nothing. This too will come. This board is trying to work on it, but in a vacuum. It still has no clue what other home inspector boards do, what’s worked or not, and why.
That’s why it’s so important for inspectors and the public to speak up, help and participate, no matter how much it seems a waste of time sometimes.
That’s when things really get better. More mature home inspection boards start joint projects with realtor boards, mortgage finance boards, and public housing agencies to better inform and protect the public. They do things like co-authored brochures explaining why home inspections are important to buyers and sellers. They write rules to make sure the public get the same, straight message about the need for home inspections, and to boost public awareness. They start looking for public input and ideas instead of resenting them. They make sure the public really gets a genuine home inspection report when they think they are. They set up funds to protect the public from abuses. They get unlicensed fly-by-nights off the streets. They stop trying to beat up their own licensees or competitors. They start learning from other boards’ mistakes. It only gets better from there. Here’s hoping this opens the board to the next steps ahead.
Admitting mistakes is the first step toward making amends and doing the next right thing. That’s how boards mature and get it right.
That’s Over! But is it The End?
So ends the sorry tale of “advisory bulletins” confusing the public and rigging land mines for Kentucky inspectors to trip over. (The trip wire in the FedPac “advisory” was the word “removal.” Inspectors supposedly were not to say that “kryptonite” word when they saw a FedPac, despite KRS 198B700(6)(b), which requires inspectors to “recommend” clients “repair” or monitor deficiencies. The “advisory bulletin” admonished inspectors to tell clients some facts about FedPac breakers, but be afraid to use the radioactive word “remove,” a word the Board claimed “only” licensed electricians could say.) It was a misadventure best put behind us. Now it is.
That leaves only one possible land mine word still hanging around – the word “termites.”
We hope it won’t gnaw its way into the progress the KBHI has made at last. The KBHI has no more legal authority to interpret or administer another board’s licensing statute, such as the pest control statute, than it had to interpret KRS Chapter 411. The idea that only a licensed pest control operator can utter the word “termite” is as silly and baseless as the idea that only an electrician can say a FedPac panel should be repaired or “removed.” Your neighbor is free to say either word; so are you. That’s the small, minor detail called “free speech” that protects every American’s right to express his opinions. Absolutely no license is required to name a bug when you see one.
But now the word has become an issue in a lawsuit against a Kentucky home inspector. (As you might expect, PLI is helping the inspector’s defense. The inspector did a good job, just as Ricardo did. And, you guessed it, no “dues” collecting “association” has pitched in to help that inspector, either – again.)
Chances are good that the court will decide the termite question in the months ahead. PLI will keep you posted. And we’ll do our level best to help it turn out right.
Meanwhile, we hope the KBHI will start to tune in too. For years, PLI has urged the board to stay on top of Kentucky court cases and survey laws in other licensing states at least annually. But it never has. The KBHI would not have to start from scratch every single time, and keep reinventing wheels, if it just made an effort to keep posted, at least on Kentucky cases, and better yet on the laws and cases involving home inspectors in all 30+ licensing states.
The Board has a new lawyer now. Maybe the time has come that it will put its lawyer to work keeping it on top of inspection law where the rubber hits the road.
We’re looking forward to 2010!