Pocket An Extra $100, on renewing.  Sale starts now.

                It’s not really a “sale,” of course,  It’s more like reality therapy. 

                For years, the KBHI soaked inspectors for hundreds of thousands of dollars they couldn’t figure out how to spend.  With new regulations, ready to kick in now, the Board is calling it quits.

                New inspectors will get a gift, too — easing their way to an initial license.

                Inquiring minds want to know:  Is the Kentucky Board of Home Inspectors (“KBHI”) admitting it was wrong — 2 or 3 times?

                Those are highpoints of a rewrite of all home inspector regulations.  They now are ready to go live, in days. The new regulations are due to kick in on Friday, April 5, the expected “effective date.”  The price cut applies to all renewal applications received on or affecter the effective, which is spelled out below.

               There’s no price cut for schools or CEW providers.   Call that the “lowlight.”  So home inspectors stay saddled with CE classes costing about 500% as much as real estate CE.  Probably it is just coincidence that a majority of the KBHI is officers/directors of one CE provider with pure old 1990s-style warehouse classes where a frat-boys bar is more attractive than any faculty. Regardless of what they’re doing helping keep home inspectors in business, they’ve done fine helping themselves.  Only, you know…there’s no free lunch.

                Here are the key highlights, now that the legislature has packed up, gone home, and everybody is getting juiced for the November election.

RENEWAL FEES FALL.

                That is when license renewal fees will be cut by $100, dropping from $500 every 2-year cycle, to “just” $400.

                At last. (Let us remember that Indiana’s biennial renewal fee is just $50.)

                It took over a decade. PLI began pushing to roll back fees when the Governor grabbed $125,000 cash sitting in the Board’s unspent checking account. That was 2008.

                Since Day 1, $250/year was the maximum fee Board could charge. It came out of good intentions built on total ignorance. In 2006, the Board’s first full year, no one knew how much it would cost to operate the Board. So they charged the top price the law allowed. Fees were supposed to change as soon as the Board knew its budget numbers.
Counting on government to cut fees is like counting on snow not to melt.  And a budget?  For this Board?  Never happened.  

                A few years later, the Board made the right move, and there was a brief flicker of hope, when the KBHI cut a fees by $100, about half a decade ago. By then, the Governor had snatched more like $300,000 of idle cash from the do-nothing KBHI.  But the KBHI public member that year actually was a CPA.  He knew budgets are the embodiment of policy, and pushed the move to cut fees.  But that was a one renewal cycle chop. And the budget idea fast-faded too. They were right then. 

                The whole $500 Maximum Fee came back to life, like a vampire. So for the last 2 cycles, inspectors have been tossing away the extra $100 each for no particular reason, exce[t, you know….the Board … was … getting … A Round Tuit.   It’s too bad they had to be right a second time, now.

                Here’s hoping this cut actually may last.

                Of course, practically nobody will be renewing this year, in 2019. And starting with 2015, the Board redid the regulations five times (in just 5 years).  

NEW NAT’L EXAM

                A second, entirely new, national exam gets smuggled in with the new regulations.

                New inspectors can consider it their gift.  

                Still, beginning April 5, new inspectors will be able to chose the Inter-NACHI Home Inspector Exam instead of the NHIE (the National Home Inspector Exam).

                For the whole time since July 1, 2006 until now, only the NHIE) was accepted. (A NAHI exam was approved before NAHI went broke.)

                The so-called NACHI Exam was presented – and rejected by the Board– in 2006. It has been rejected by one Board after another, repeatedly since then. Mostly recently, this very Board refused to accept the NACHI exam just a few months ago.

                Courageously protecting the public, this Board never mentioned the new NACHI Exam in the regulation rewrite. It was not mentioned at the public hearing on the new regs. It just appeared, out of the blue, tucked into “Staff Comments” amending the regulations, at the hearing before the General Assembly’s Licensing and Occupations (“LO”) Committee in February. From there, it slithered into the new regulations, flying as low below radar as invisible ink.

                What the stealth reg change did was not mention the name “NACHI Exam.” Instead, the reg just describes it to a “T.” To be approved, the reg says a National Exam has to ask 200 questions, out of a mere 800, etc. Which “just happens” to describe just one exam, from a single profitable vendor, to a “T.”

                Oh, by the way, the KBHI has a settlement offer sitting on the burner, in a lawsuit NACHI fired up a few months ago – which “just happens” to be over the Board’s most recent refusal to OK the NACHI Exam.

                Interestingly, the NACHI Complaint said the KBHI was a “captive” agency and members could be personally liable under a case known as “North Carolina Dentists.” Gov. Bevin cited exactly the same North Carolina Dentists case in his Executive Order setting up the Kentucky Real Estate Authority (KREA). Gov. Bevin said KREA would protect the Board from exactly those problems and liabilities.

                Was the KBHI wrong all those times before? Or wrong now?

                All that was then. This is now.

NEW BUSINESS CE COURSES

                The new regs ditch the old restriction that CE courses “relate to the technical skills” need for home inspecting. 815 KAR 6:040 Sec. 4(3)(a).

                This silently opens the door for business CE courses. That’s something former Board member Mark Oerther vehemently opposed. The Board, ever visionary and mindful of protecting Kentuckians, followed Oerther – prohibiting business CEs for years. Home inspectors probably were one of the last licenses where business CE courses were off limits. (This Board would never know. It never asked such things, until Realtor Paul Ogden got on the Board.)

                No Kentuckian is protected when a home inspection business folds and turns out the lights.  You might think that goes without saying.  Instead, “going broke” and tanking the business actually was a fairly common result when a serious complaint reared its ugly head.  Result?  The consumer got stiffed and the KBHI had nothing to say with the license gone.

                So business courses might, now, at last get their due.  It is tempting to use the expression “At last” – again.

                PLI, of course, had the first CE business courses approved, over a decade ago. Count on PLI to ramp up those offerings now that the coast has been cleared – at long last.

                This is the same Board, it is worth remembering, that spent years showing it was incapable of figuring out how to provide group E&O (Errors & Omissions) insurance for home inspectors. Group E&O is a “win-win” home inspectors and the public. That’s why the vast majority of Ky Real Estate Authority (KREA) licensees – tens of thousands of real estate agents and brokers — have group E&O coverage Mere mortals surely think that adding 485 home inspectors to a group of 17,000-20,000 would be child’s play, if any grown-up actually wanted to do it.

                A successful business, with consumer risk counted in, is not the whole story.

                Removing the “technical skills” requirement opens more doors.

                For example, CE courses jointly credited for home inspectors, agents, brokers, and other real estate professionals are years overdue.               

                What, you might ask, does “technical skills” actually mean? You’re gonna love this: The answer is in the brand new (but mainly recycled) regulation.

                (c)1.[3.] 3. Technical courses include identification and determination, as applicable within the standards of practice.” 815 KAR 6:040 Sec. 11(3)(c)3. Say what? “Identification” and “determination” are not even defined in either SOP.

                All votes on what that might possibly mean should be sent to PLI c/o Dumpen, Stumpem & Unowear, Flatulance Gulch, KY.

                The so-called “nontechnical courses” (now that you know what they are) were meant to be limited. But the Board managed to even muff that.

                So the new reg then helpfully adds:

                “4. For a licensee satisfying the education requirement in Section 10(2)(a), nontechnical courses shall be limited to three (3) hours of instruction for credit.

5. For a licensee satisfying the education requirement in Section 10(2)(b), nontechnical courses shall be limited to six (6) hours of instruction for credit.”

                Small minor detail: OOOPs! There is no “Section 10(2)(a)” or “Section 10(2)(b).” Let that cross the mind when you’re told how many months or years of careful work went into this re-write.

                (Steve will teach that the Board probably meant the limits to be 3 “nontechnical” CE hours for odd year renewals, and 6 for even numbered year renewals. But it definitely does not say that.)

                The new regulations were heard by the General Assembly (ARRS committee) on February 11, 2019. Steve testified at the hearing. The regs came out and were referred to LRC (the Legislative Research Commission) on March 6. Neither standing committee of the General Assembly took them up. There still is an extremely long shot something might happen on Thursday, March 28, the last day of the General Assembly session. Unless that black swam happens, in the normal course of things, the new home inspector regulations automatic become effective 30 days after the LRC referral.

                The effective date is April 5, if that all follows the usual course.

                This will be the seventh – count ‘em – 7 – time that the KBHI, in its infinite wisdom, and hunger for free lunch and rooms, has rewritten Kentucky home inspector regulations. (The effective dates are 10-6-2006; 7-6-2012; not once but twice in 2015 — 2-6-2015 and 9-4-2015; 7- 1-2016; and now April 5, 2019.)

                Aren’t you curious? Were they right then? Or whenever? Or now?

                Whatever the best answer, you might say “At last….”

                At least until the next round of rewrites and free lunches.

NEW LAWS OF NOTE:

                 HB 436  was the Realtors Big Bill.  Around the Capitol, it was called their 2019 Christmas Tree. It’s been passed, but at press time, it had not been signed into law by the Governor (though it is expected to have no problem).

                The Big Deal was shortening the statute of limitations for real estate agents. HB 436 amended KRS 413.140 to include real estate licensees in the one-year statute of limitations for professional liability. It also amended KRS 324.420 to reduce the statute of limitations for filing complaints with the Real Estate Commission from two years to one.

                They were heartbroken that they had to give additional CE requirements to get the statute of limitations shortened from the current 5 years to 1 year, like home inspectors.

HB178   was supposed to be the Ky Real Estate Authority’s Big Bill. It sank like the Titanic. There wasn’t even anybody on board.