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The Kansas License Law: My take and open letter to the Senate Commerce Committee  XML
Forum Index » Legislation, Licensing, Ethics, and Legal Issues
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Nathan
King
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Joined: 06/17/2014 09:32 PM EDT
Messages: 5236
Location: Carmel, IN
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Good Afternoon Committee Members:

My name is P. Nathan Thornberry and I am the CEO of Residential Warranty Services, Inc., as registered with your Secretary of State as a foreign entity, and the founder/manager of the Inspector Services Group, Home Inspection University, and InspectorLab, and I’m involved in over 20% of all residential real estate transactions in the fine state of Kansas and I regularly visit and speak there on matters of real estate and risk management. Our partners in the space, local Kansas businesses, include all of the largest participants in the home inspection space and some of the most influential in the space as well – small business owners that have been in the home inspection industry for the nearly 20 years I have been and in some cases longer.


Here's what you need to know as you consider the proposals in front of you for home inspector licensing:


1. The license law, as proposed, is damaging to consumers.

As a participant in the industry throughout the U.S. and Canada and having dealt with parties in both licensed and unlicensed states and being the only industry player with a full time legal and compliance department I can tell you without question that the proposed Kansas law has something in common with the previous license requirements that has not been the case in any other state: A provision strictly restricting consumer protection through an arbitrarily low limit of liability. The last time around this amount was $2000.00, which hardly covers any substantial home repair that would be required in the case of negligence on behalf of a licensed home inspector. On this basis alone, the license law proposed is not beneficial for the citizens of Kansas.

2. Home Inspectors are already regulated.

Home inspectors generally have registered businesses in the State of Kansas already and the Consumer Protection Division of the Attorney General’s Office is available for those that are unwilling or unable to seek civil legal means of pursuing any wrongdoing. The consumers in the State of Kansas know this, the Attorney General’s Office is a strong consumer advocate, and when you look at the number of complaints regarding home inspections (either during previous licensure or before or after) the number of complaints registered against home inspectors is virtually zero.

3. There are no special skills, tools, equipment, chemicals, education, or excessive risk to the participant or recipient to justify licensure.

When you look at professions that generally need licensing, which almost always costs the State money, you will find the participants in the field and the recipients of their respective service are in need of some level of protection due to one of the issues above. For instance, Lawyers are licensed because we want to make sure they are duly qualified. Those applying potentially harmful chemicals (like pest control) generally need to be licensed in order to ensure those chemicals are accounted for and don’t harm the public and are handled correctly. Those dealing with large pieces of potentially dangerous equipment are licensed to ensure that all participants are qualified, unlikely to cause harm, and insured for when they do. A home inspector simply has none of these markers. The equipment for inspecting is regularly available on the shelves of home stores and available to the public, they specifically in their Standards of Practice (including the one being proposed for licensing) require no access of dangerous equipment or areas, and the ability to inspect homes for a living requires no college degree or scientific nor legal training. Nearly 70% of all inspectors nationwide at this point are taught online in systems like ours (Home Inspection University) and then supplement that training with ongoing continuing education. Most of the industry participates in such regardless of whether there is any State level requirement to do so, largely due to item #4.

4. Inspectors already have the incentive to deliver. Kansas’ law disincentivizes protection.

If an inspector misses something substantial, he/she knows that they will have to deal with a complaint, a claim on their insurance, or damages. The incentive is already there and most inspectors outside the State of Kansas have E&O Policies. Within the State of Kansas, the number of insured inspectors is lower compared to the rest of the country due to the reduced requirements (the lowest of any licensed State in history) and option for a bond. The number of insured inspectors has actually gone up since licensing went away, which will reverse to the detriment of consumers once again if passed. If we continue to have the current situation where an arbitrarily low limit of liability is not in place, inspectors will continue to improve their processes and be duly insured to prevent liability on them (the liability the license law erases to the detriment of consumers).


5. Consider the Source.

I would encourage you to look at the source of the proposed licensing very closely. In the vacuum of licensing, consumers have had to ensure their inspectors were qualified. They look for good marketing, insurance policies, experience, and referrals. This system has virtually eliminated in the free market any issues for consumers in Kansas. The winners are responsible business owners that take care of their clients. The losers are those that need a “level playing field” that can only be sought through unnecessary legislation and this is what you have in the proponents of the law. Compared to their competition, they do a fraction the number of inspections. Compared to their competition, their inspection product lacks any of the features consumers desire. I generally promote issues based on merit and the positives of my arguments, but in this case you have 3 inspectors that are asking you to legislate them into some level of success in a profession they can’t compete in and they’re doing so blatantly. On that note, the Kansas license laws both prior and proposed make home inspections virtually worthless to the consumer and harm not only consumers but the industry in a big way. This is, in every sense, not just a business killing proposal but rather an industry killing proposal.



In Kansas, the weakest licensing for home inspectors in the world’s history was passed and protected virtually zero consumers while harming all consumers and inspectors in all the years it was active. While other states are also considering dropping licensing for this niche industry, even the States that have the desire to keep a licensing program in place openly admit they do not have consumer complaints coming in and that the license laws’ intended outcome has not been what was attained. Kansas is for a second time considering a license law that is virtually the same as the last license law that was proposed and from the same source. It is my position that the State of Kansas, Kansas taxpayers (including myself), real estate industry participants, and the State Senate was already fooled once and should not be fooled again.

I offer my services and information, in an open forum at a time you see fit, to show you stats and figures over not just Kansas but the entire country that show in great detail the lack of need for the State of Kansas to spend its resources on a home inspection licensing program. Feel free to email me here at any time to arrange such.


Sincerely yours,


P. Nathan Thornberry
CEO
Residential Warranty Services, Inc.

P. Nathan Thornberry
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