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The Ky Board of Home Inspectors was “abolished” Dec. 1 – along with three more real estate licensing agencies – by Executive Order of Gov. Matt Bevin.

A new board, called the Ky Real Estate Authority, was created to manage their operations.  The Authority blends together the Ky Real Estate Commission (“KREC”), the Real Estate Appraisers Board, and the Board of auctioneers – along with the Ky Board of Home Inspectors.  All four were abolished and “recreated” as part of the Authority.

Home inspectors who began licensing with a fear they would be under the same umbrella as real estate agents now have that reality to deal with.

The Ky Board of Home Inspectors was “recreated” within the Authority, under the new name of the “Board of Home Inspectors.”

The “recreated” Board of Home Inspectors was stripped of key powers, and two-thirds of the members no longer can vote.  They’ll soon be gone.

The Ky Bd of Home Inspectors also gets its teeth pulled when it comes to punishing home inspectors and handling complaints.

Punishments will be “recommended” – not applied – by the new board.  Any recommended penalties must be “ratified” by the Executive Director of the new Authority.  Appeals now will go the Commissioner of the Department of Professional Licensing.

If the Executive Director approves any denial, suspension, or revocation of a license, or any penalty, it can be appealed to the Commissioner of the Department of Professional Licensing – within 30 days of the action.  The Commissioner then schedules an administrative hearing under KRS Chapter 13B, the Uniform Administrative Procedures Act, as is the case essentially now.  The Commissioner, not the 13B administrative law judge or the new board, has the power to issue any final order.  From there, any appeals go to the Franklin Circuit Court.

If you have a license application or renewal application set to be heard Dec. 13. the Order does not spell out exactly what will happen.  Our best guess is that applications will come up, and be granted or renewed, as usual at the Dec. 13 meeting.  As always Steve will be there to keep you posted.  However, the Order clearly removes the Board of Home Inspectors power to deny licenses or renewals by itself. “Any decision of the Board of Home Inspectors to deny, suspend, or revoke a license…shall be subject to the approval of the Executive Director of the Ky Real Estate Authority,” under the Order.

We are unwilling to take a guess so early in the process, but it will bear watching, since any claim that the key decision-makers, the Executive Director or the Commissioner, knows home inspecting will be gone.

The new “Board of Home Inspectors” also loses any authority to write and promulgate regulations.  It has made enough of a mess of them in the last two years already.  The new Board is limited to making “regulatory recommendations.”

Instead, the new Board of Home Inspectors will “be given thirty (30) days to review and comment on a proposed regulation – before the regulation is “promulgated, amended or repealed.”  Authority to promulgate regulations from now on will be in the hands of the Commissioner of the Dept. of Professional Licensing.

Here’s our vote for the first new consolidated regulation:  Bring all the licensees under the real estate board’s E&O (professional liability) insurance.  That’s a win-win for the Authority, the public, and the licensees.

Last, all the existing full-time staff for all four outfits are “consolidated” in the new Authority to “eliminate duplication.”  Again, exactly how that works out is due to get pinned down a little more in the weeks ahead.  We’re crossing our fingers that it will mean somebody answers the phones and returns home inspectors call/emails in the months ahead.  That would be a refreshing change.

Between now and Jan. 31, 2017, the new board, the Public Protection Cabinet, the Department of Professional Licensing, and the Kentucky Real Estate Authority will “study and plan for the efficient consolidation of resources, including office space, contracts, professional services, records, and other administrative functions so as to promote efficiency, improve administration, and save costs.” Expect cuts — in budgets and in regulations.  You can send in suggestions at the Governor’s “red tape reduction” hotline site, http://redtapereduction.com.  The more tips and ideas, the better.  You’ve seen the problems — the good, the bad, and the ugly.  Now’s your best shot to fix ’em!

A “study to propose greater efficiencies and consolidation” is due Jan. 31, 2017.  Meanwhile, all existing regulations will remain in place pending the study and review.

Here’s hoping that one result in “cost saving” will be lower license fees for home inspectors – with one-third the former number of members on the surviving Board of Home Inspectors buying themselves hotel rooms, meals and goodies, in addition to having very little left to do.   Steve already sent that one in.  You can too.  The surviving skeleton Board of Home Inspectors would be smart to switch to quarterly meetings, consistent with the statute, KRS 198B.704(13), instead of the current monthly meal plan.

The chair of the new “Board of Home Inspectors” will be one of five “ex officio, voting members” of the new Ky Real Estate Authority.  That’s a little weird.  “Ex officio” and “voting?”  We’ll see.

At the same time, the Office of Occupations and Professions was “altered” to become the Department of Professional Licensing, within the Public Protection Cabinet, as before.  The Commissioner is authorized to “hear the administrative appeal of any action” taken by the Board of Home Inspectors and any of the other recreated boards/commissions.

William “Larry” Brown was named Commissioner of the new Department of Professional Licensing.

The new Department of Professional Learning gets the really handy power to “charge” the Ky Real Estate Authority and “any other authority or board organized within the Department of Professional Learning a reasonable amount for administrative services.”  Not incidentally, “budgetary authority” over the Board of Home Inspector money will now be out of the Board of Home Inspectors hands and turned over to the Executive Director of the Ky Real Estate Authority.  That’s just about the only duty of the new Executive Director of the new Authority that is clear in the Executive Order.

Beneath the new Authority, each of the abolished agencies, including the Ky Bd of Home Inspectors, was “recreated” “within” the Ky Real Estate Authority.

As with the Board of Home Inspectors, KREC was renamed the “Board of Realtors,” in a surprising adoption of a trademarked word guarded by the National Association of Realtors (“NAR”).  The two other “abolished” and “recreated” boards likewise were renamed.

One result of the reorganization is expected to be the creation of “a single forum that will allow individuals in related real estate professions to meet as a unified group.”  Every graduate of PLI’s Law & Regs class has heard Steve urge the Board of Home Inspectors to at least meet with the Ky Real Estate Commission and other boards — but in 10 years, it never has.  Not once.  This is one way to force them all out of their silos!  It also may give the Board of Home Inspectors the benefit of the Real Estate Commission’s three full-time lawyers.  Those lawyers live and breathe real estate, unlike the part-time rental lawyers the Board of Home Inspectors has been saddled with for the last five years.

On the other hand, this may very well mean that the Board of Home Inspectors will not be reunited with the Department of Housing, Buildings, and Construction any time soon, if ever.  The board’s prior chairman, Jim Chandler, swore he was going to get than done.  His successor, Mark Orther, said he meant to finish the job.  Too little, too late.  (That’s part of the downside of working in a silo.)

The new “Board of Home Inspectors” has three members, compared to the current nine members set out at KRS 198B.704.  All are appointed by the Governor, as before.  The Secretary of the Public Protection Cabinet will “appoint all personal” for the Board of Home Inspections.

Gov. Bevin’s Executive Order 2016-289 also provides that no more than two members of the same political party shall serve at the same time and no two members will reside in the same county, a new restraint.

Home Inspectors board members get a 300% raise – from today’s $100 per day to a max $300 per day, not to exceed $6,000 a year.  But their red-haired step-children, the existing board members who did not get reappointed (Jim Chandler, Mark Oerther, and Robb Johnson) do not get the raise.  They’re stuck with the current $100 per day, as non-voting members, until their terms expire.  (At that time, those seats are done away with.)  But the basic new twist is that compensation will be set by the Governor from now on.  The last time the Ky Bd of Home Inspectors members got a raise, they gave it to themselves.  The changes are expected to result in more than $85,000 of savings per year — not from the home inspectors, but from the former Ky. Real Estate Commission (members got $15,000/yr.) and the Board of Auctioneers (paid $12,000/yr.).

The first members for the Board of Home Inspectors are appointed on staggered terms.  After than, it will become three-year terms, as has been the case.

Reappointed to the new Board of Home Inspectors are Mitch Buchanon, a Frankfort-area home inspector nearing the end of his term; Bud Wenke, a green Hopkinsville-area home inspector just beginning his term; and Neal Tong, an Owensboro-area Homebuiders representative, about halfway through his term.

Wenke was appointed to a three-year term, expiring Oct. 31, 2019.  He also was appointed chair of the new Board of Home Inspectors.

Edward C. “Neal” Tong was appointed to the two-year term, expiring Oct. 31, 2018.

Mitch Buchanon was appointed to the one-year term, expiring Oct. 31, 2017.

The other existing Ky Board of Home Inspector members become “non-voting ex officio” members of the new Board.  They serve – if they bother to show up at all, without a vote – until the end of each member’s respective term.  Then their seats disappear.

Interestingly, in an add-on to existing law, board members forfeit office and are “automatically removed” if they miss three consecutive meetings or more than one-fourth (25%) of meetings in any 12 months.

Read the Ky Bd of Home Inspectors Executive Order: http://ppc.ky.gov/Documents/EO2016859.pdf

The Board of Home Inspectors nee “Ky Real Estate Authority” Executive Order followed, by just days, an Executive Order abolishing and then rolling up most of the boards at the Dept. of Buildings, Housing, and Construction.  It created a Housing, Buildings, and Construction “Advisory Committee” and abolished eight boards there, including the Manufactured Home Certification and Licensure Board, the Electrical Advisory Committee, and the State Plumbing Code Advisory Committee.  We’re talking a new world here!

Read the DHBC Executive Order

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