This bill, signed by the Governor into law in December 2022 and effective in June of 2023, amends the NYS Real Property Law and adds a required disclosure, by the Seller to the Buyer in the modified Property Condition Disclosure (PCD), of indoor mold history upon the sale of Residential Real Property (generally1-4 unit “Homes” inspected within our license. This does not apply to Condos, Cooperative Apartments, and “Property on a Homeowner’s Association that is not in fee simple by the Seller”). It adds the question: “HAS THE PROPERTY BEEN TESTED FOR INDOOR MOLD? YES NO UNKN (IF YES, ATTACH A COPY OF THE REPORT)”.

It is important to note that detection and reporting of mold is specifically excluded in our NYS Home Inspection Standards of Pracatice. However, many Inspectors offer inspection for mold as Mold Assessors.

Some observations about NY Property Condition Disclosures…

In certain locales (for instance Downstate) a PCD is not commonly available at the time of inspection. In locales that generally require a purchase agreement prior to inspection, the PCD is often part of that paperwork. Some Home Inspectors make it their practice to request a copy of the PCD for review prior to an inspection. By this, Inspectors can be alerted to issues identified by the Seller and also might give their Buyer Client a head’s up where inspection observations differ from the Seller’s statements in the PCD.

While PCD law provisions, along with adding mold to the list of required disclosures, appear to be aimed at consumer protection of a home Buyer, New York’s Caveat Emptor (Buyer Beware) policy in a home sale still reigns. What might have been very effective protection of a Buyer in creating the PCD was substantially weakened by modification of provisions as it was made NYS Law. The Seller’s diclosures in answering the PCD questions had originally been required to be based on constructive knowledge (what they should know). This was changed to actual knowledge (what they actually do know at time of signing). By that change, a Seller is not required to investigate anything to complete the PCD fundamentally changing their level of responsibility. It can be a major challenge to prove what a Seller actually did know at the time of signing to make a case of fraud where a Seller might be held liable for damages for an intentional misrepresentation.

Another weakness of the PCD law is that a Seller can avoid providing a PCD by paying just $500 to the Buyer at closing. $500 is a pittance relative to the value of most homes and the cost of major repairs. The Seller can side-step PCD liability by simply paying that. Failure of a Seller to provide a PCD, however, can be seen in itself as a cue to look even more closely for substantial undisclosed issues.

Various exclusions in the law provide that PCDs are not required in circumstances such as estate sales where the Seller is a fiduciary administrator for the estate, or in a sale due to forclosure, etc. In these cases the Seller would generally not have been in residence and would not be expected to be familiar with a home’s condition.

On the bright side, the PCD can be used by the Seller to move a problem with their home up front in the sale so that it is disclosed and represented as already incorporated into their asking price. This act can build trust between Buyer and Seller and limit Seller liability, easing the sale process. Otherwise a substantial undisclosed issue found in a Home Inspection can become a matter of contention and negotiation that could delay closing or kill the deal.

Whether a PCD is provided or not, this law does not relieve a Buyer from the responsibility of due diligence in making the purchase. Getting a Home Inspection is an essential element of that effort.

New York’s Property Condition Disclosure law was conceived as a strong tool for consumer protection. Adding mold to its list of questions does not do much to correct its enfeeblements.

Home Inspection remains a Home Buyer’s best protection. That is why NYSAHI strongly advocates for a NYS Right to Home Inspection Law.

This article is provided for general information only and to engage the reader in learning more about the subject. It was not written by or reviewed by an attorney and should in no way be considered to be a legal opinion or legal advice or relied on as such. Consult an attorney for any legal opinion or advice.

GOT SNOW?

The New York State Energy Research and Development Authority, NYSERDA, is responsible for the implementation of the NYS Advanced Building Codes - Appliance and Equipment Efficiency Standards Act of 2022. This initiative sets “...minimum energy and water efficiency requirements for residential and commercial products and appliances to help maintain performance and quality while reducing energy and/or water consumption.” The purpose of the Act is to meet our Greenhouse Gas reduction goal and to provide consumers the benefits of product and appliance efficiency. The first standards take effect on June 26, 2023. Some residential products included in this first batch of standards include: Faucets, Toilets, Shower heads, Gas Fireplaces, Ventilation Fans… They are required to be listed in the States Appliances Standards Database (SASD), available on-line, that as of this date has 31,385 individually certified appliances that meet the new standards. “Any manufacturer, distributor, retailer, or installer selling, leasing, or renting non compliant products may be subject to enforcement penalties. “

Receive program updates from NYSERDA:

https://www.nyserda.ny.gov/

Determination of compliance of installed products or appliances is not a requirement under NYS Home Inspection Standards of Practice. But, a knowledgeable Inspector should be familiar with the sweeping Green Energy programs to help keep Clients informed.

The purchase of a home is for most the greatest or among the greatest investment(s) they may make in their lifetime. Few Home Buyers have the knowledge and experience to realistically evaluate a house to determine its condition and safety, or to project substantial expenses for repair or replacement that are likely to be required in the near term. This is why the profession of Home Inspector exists. New York’s business policy of Buyer Beware substantially relieves the Seller of the burden of revealing issues with a home and a Buyer is expected to perform due diligence in evaluating a home prior to closing. Almost all Buyers have to rely on professional evaluation of a home to responsibly do that.

Recent Market trends have increasingly led to situations where Buyers are discouraged from getting a Home Inspection. Realtors may advise that to have any chance of being accepted in a very competitive market an offer should be higher than the asking price and with no contingencies. Sellers may even advertise that offers with a Home Inspection or other contingencies will not be considered. Buyers, desperate to find a home when there is limited supply and high demand, often have no choice but to take the big chance that the house for which they put in a high/no-contingency offer is OK. Sellers in this market can get top dollar for substandard / unsafe / very needy homes.

NYSAHI’s position is that no Buyer should EVER be forced into this position and that their right to a professional and regulated Home Inspection, with typical associated tests, must be established in NYS Law so that noone buys a home without the opportunity for essential due diligence. Without an undeniable legal right to a Home Inspection, Buyers can, without viable options, find themselves burdened with unsafe/money pit homes that put their/their family’s health, safety and economic security in jeopardy. The overall result is added strain on an already struggling health system, bankruptcy, foreclosure, homelessness, ...and none of that is good for our society or economy. This is why NYSAHI is calling on the NYS Legislature to create a strong Right to Home Inspection law.

The Perils of Walk-n-talks

Walk-n-talks, also known as "walkthough consultations", are characterized by short duration (perhaps only 30 minutes), usually no contract, no written report and substantially reduced fee, as compared to a full home inspection done per NYS minimum standards. These are often performed by a contractor, but sometimes a licensed home inspector, who walks through a home with a buyer client and discusses various conditions observed.

Walk-n-talks have become more frequent, due to market pressure with limited housing supply. Some involved in selling a home have favored this practice to reach closing quicker in a strong seller’s market. Buyers are attracted to the reduced cost of the “inspection” and because a walk-n-talk can be done at a showing before making an offer. Also, relying on a walk-n-talk, buyers often waive a full home inspection, making their purchase offer more attractive in a competitive environment. Sellers may specifically encourage this in their offers for sale. We were advised that in some places in New York State the practice has become common and is encouraged by real estate industry professionals.

In response to our inquiry to the Department of State, the NYSAHI Board was advised that since there is no written report produced, walk-n-talks are not home inspections under the professional licensing law and thus are not regulated. They also advised that licensed home inspectors are accordingly not prohibited in that law from engaging in walk-n-talks.

After further exploring the practice, we have concluded that walk-n-talks are contrary to the public interest that the NYS Home Inspection Professional Licensing Law was enacted to protect, and that all parties who engage in the practice do so at great risk, especially licensed home inspectors. Following are considerations that have led us to this conclusion:

Buyers

• There are no professional standards. Licensing does not apply. Any unqualified person may engage in the practice.
• Buyers have limited legal recourse against any unlicensed consultant.
• Even if performed by a licensed home inspector, a walk-n-talk is by far substandard to a State-regulated home inspection. It is not possible to properly evaluate all of the systems of a home in a short walk through. Undisclosed issues and unanticipated expenses are sure to arise after sale.
• Without a written home inspection report a buyer has no professionally documented tool to use as a reliable basis for negotiation and no written documentation of the conversation that happened during the walkthrough.
• There is no Code of Ethics to protect a buyer from from conflicts of interest or collusion among their walk-n-talk consultant and others on the seller's side.
• Walk-n-talks fast-track the home buying process, shorting due diligence at a time when it is most needed for a life-changing major investment.

Sellers

• Accepting a purchase offer where a home inspection is waived, especially if in any way encouraged by the seller, can expose the seller to a claim for damages resulting from undocumented defects and/or those not detected in a walk-n-talk. Did the seller prevent the buyer from exercising due diligence? Did the seller imply that waiving the inspection contingency was a requirement of sale? A full home inspection protects both buyer and seller.

Realtors, Lawyers, Mortgage Brokers

• Professionals practicing within a real estate transaction can be named in legal actions if they in any way recommend a walk-n-talk in lieu of a full home inspection or encourage a buyer to waive a home inspection. Realtors especially have a duty to both buyer and seller to recommend a home inspection prior to sale.

Licensed Home Inspectors

• Any inspection you perform without a written report is very likely not covered by your insurance. Without a report, that service is not considered a home inspection, which is your insured business. Your company and perhaps all your personal assets are on the line.
• As a licensed professional you are held to a higher standard under the law. Regardless of anything you say or agree to, a buyer has a rightful expectation to trust you to protect them from buying a house with undisclosed defects. Will you find them all in a half-hour?
• Without a written Home Inspection report, any legal action against you may be based on hearsay. This can place you at a considerable disadvantage and in an indefensible position in court.
• Providing a walk-n-talk could be tantamount to encouraging the buyer to purchase a home without a proper home inspection exposing you to substantial liability.
• A walk-n-talk performed without a contract further increases liability.
• Lawsuits against home inspectors involved in walk-n-talks are reportedly on the rise...

We have come to believe that the practice of walk-n-talks is contrary to the public interest and the spirit of the law that established our profession which recognizes that "A home inspection has a direct and vital impact on the quality of life for all home buyers"*. We also believe that licensed home inspectors engaging in such practice undermine the credibility of our profession by offering an unreliable and far inferior service as compared to a home inspection conducted in accordance within the NYS Standards of Practice. We remind you all that "In performing home inspection services, home inspectors shall adhere to the highest principles of ethical conduct."* We do not believe it is ethical for a home inspector to engage in this questionable practice because buyers may reasonably, but in ignorance, rely on a walk-n-talk conducted by a licensed home inspector to be equivalent to a true full home inspection.

* As per NYS Home Inspection Code of Ethics

Licensing for home inspectors in New York State came into being in 2006. For years after that, against the grindingly slow halls of congress, NYSAHI sponsored a bill amending the licensing law to require that the original, absurdly easy, State-offered exam, which did not meet the State's own requirements for a psychoimetrically valid exam, be replaced by the National Home Inspector Exam (NHIE). In November of 2019, our bill was finally signed into law (the first change to the licensing law since it took effect).

A mere 4 months later, language was inserted into the 2020 budget proposal to amend the law once more to allow the DOS to accept either exam, much to our chagrin. Our lobbtist contacted members in the senate delegation to oppose this 180-degree change in the governor's position and the line item was subsequently changed to read as follows (underlined is new text):


(See the new law on nysenate.gov here: https://www.nysenate.gov/legislation/laws/RPP/444-E, paragraph (c) )

So NYSAHI is memorialized in the NYS home inspector licensing law.

The DOS hired a point person with a background in education and exam psychometrics to spearhead the creation of a new exam. In her own words regarding the original exam: "This exam sucks". To that end, three NYSAHI board members served as subject matter experts to help with the development of a new test, which is now being offered. The new test is psychometrically valid and is continually updated. For example, if everyone gets a particular question right or wrong, the question is tossed. License applicants can still take the NHIE (the exam required by ASHI) if they prefer, although the main complaint about the NHIE is that it is not NYS-specific.

Low standards for attaining and maintaining a Home Inspector license are a disservice to individual inspectors, the profession, and consumers of inspection services. NYSAHI has performed various surveys and has found that the majority of home inspectors agree that harm to the public perception of this profession could result from weak standards.

During the regulatory development period following enactment of the Home Inspection Professional License law, the New York Department of State (DOS) consistently expressed and acted upon a concern that certain provisions of the law could unfairly limit individuals from being able to attain licensure. This continues to be a guiding concern for the DOS and has resulted in weak initial educational requirements, minimal continuing education requirements, and a Mod 5 (field training) that clearly does not meet the requirements of the law for true on-site, and real-life training. The facts show that this concern on the part of the DOS is totally without basis. At least 10 other states have requirements more stringent than New York, including New Jersey, where reciprocity would be out of the question. New York inspectors who wish to work in New Jersey currently have to obtain a separate license under more stringent conditions.

Consumers believe that a New York State license is their assurance of a properly trained and knowledgeable professional. Under the present law, nothing could be further from the truth. Despite the massive, multidisciplinary knowledge base required to perform a proper residential inspection for the most important and expensive purchase that most people make in their lifetimes, and despite the many life threatening safety concerns that can exist in homes, the hours of training to become a home inspector are a small fraction of those required by cosmetologists, barbers or hearing aid dispensers. The 140 hours of education and training pale by comparison with the 2,000 hours of training required of real estate appraisers, whose base of required technical knowledge is minimal compared to the home inspection profession. Unfortunately for the consumer, the minimal requirements for a home inspector license are incongruous with the responsibilities of a professional home inspector.

It is clear to those of us in the profession that the present 140 hours of training are woefully inadequate to provide the knowledge necessary to properly evaluate all the structural, mechanical systems, as well as safety concerns found in homes. Ultimately a two-year degree focusing on the proper evaluation of these systems should be required, as well as significant supervised on-the-job training. Through our interviews with many individuals who teach home inspection licensing courses, all have expressed concerns that the current training requirements do not allow for sufficient time necessary to cover the intended subject matter, especailly Module 5, the field training section.

It is NYSAHI's position that the required hours of training should be raised from 140 to a minimum of 200 (30 hours each for Mods 1 through 4; 80 hours for Mod 5).

This need for additional training hours is also important for another reason: Many NYS licensed inspectors in the downstate area need to be able to practice in New Jersey as well as New York, in order to have viable businesses. Because of insufficient training requirements in New York State, New Jersey does not recognize our regulations as sufficient to allow our inspectors to practice in their state. Reciprocity with New Jersey is important to many of our members. We have asked the DOS to negotiate with New Jersey to determine and enact those requirements that would make reciprocity possible.

(Similar to HUD's - "For Your Protection: Get a Home Inspection")

In most cases, purchasing a home is the most important and expensive decision people make. Purchasing a home with serious defects could financially cripple a family's finances, and lead to foreclosure. For this reason, several years ago, the Federal Department of Housing and Urban Development (HUD) required all purchasers who were buying a house with a federally insured mortgage to read and sign a rider included with the purchase contract. Although we feel that a home inspection should be encouraged for all home purchases, we do not want the purchasers to incur any additional expenses, especially during tough economic times. Including this rider will incur no additional costs. It is highly important that potential home purchasers know the difference between an appraisal, which is a determination of the home value in relation to comparable, recently sold, nearby, properties, and a home inspection, which details major defects that can cost the unsuspecting purchaser thousands of dollars of necessary repairs. The purchasers also need to be protected form unethical players in the transaction who may conflate an appraisal with a home inspection, or attempt to dissuade them altogether from a home inspection.

A member asked about home inspectors being able to be qualified to perform windstorm certificate inspections, which is an inspection done on behalf of insurance companies for their insured clients in high-wind (coastal) areas. Windstorm certificates are currently provided by Professional Engineers. Therefore, we would need to change the insurance company requirements, as well as justify to the engineering community that home inspectors could be qualified to perform this inspection. Since windstorm certificates would be a sideline at best for only a limited amount of home inspectors, the Board decided that the limited resources of NYSAHI be allocated for more important efforts.

A member asked about making home inspections mandatory for real estate transactions in New York State. It was discussed by the Board. The best system to compare this to is the property appraisal system, which is already in use. Appraisal reports must be in a uniform format. Although New York State has a Standard of Practice set forth for home inspections, reporting formats actually vary widely among home inspectors, with many exceeding the Standard to provide more in-depth service. Like appraisals, mandating a home inspection report would essentially reduce it to filling out a form, similar to the HUD forms used for property condition / compliance inspections. Along with the variation in home inspection reporting formats comes variation in pricing. If reports were to be delivered in a standardized format, this would lead to "apples-to-apples" comparison shopping for consumers and ultimately end up driving down the market price of a home inspection. This is exactly what occurs in the appraisal industry, not to mention that banks have changed the way appraisers are hired, making it very difficult for appraisers to maintain client lists and living wage pricing for their work. NYSAHI resources would be stretched in an attempt to change the rules of the NYS mortgage industry as well as dealing with the real estate lobby, who would likely oppose any measure to make home inspections mandatory. The board duly decided that it was not worthwhile to pursue this measure.

From the Code of Ethics for Home Inspectors for the State of New York, Title 19 NYCRR: 197-4.7 Conflicts of Interest:



The Code of Ethics for Home Inspectors in the State of New York clearly includes a provision prohibiting paying for referrals. This is obvious to most inspectors, but can become muddied when hidden within a “preferred vendor” marketing program. The Code of Ethics sets forth the position that payment to be placed on a list of “preferred providers” is payment for referrals.

Professionals have a duty to act in good faith toward their clients. Paying for referrals and participating in preferred vendor programs, as interpreted by the Code of Ethics, violates our responsibility to act in good faith toward our clients. The home inspection client should be able to have a reasonable expectation that when a home inspector is being recommended, the referral is based on merit, experience, and knowledgabilty, not on the payment of what could be interpreted as a bribe to the referring party.

A major part of all ethical codes involves the avoidance of conflicts of interest that can compromise, or appear to compromise, professional independence, objectivity, and integrity. Referring individuals whose interests lie in the successful sale of real estate, and home inspectors, acting in good faith toward their clients, may well have conflicting interests.

Placement on a list of “preferred providers” constitutes a referral. There is no real difference between being recommended verbally or in writing, singly or as part of a small group, such as a short list of “preferred inspectors”. When placement on such a list is contingent upon payment of a fee, it represents a payment for referral. It is misleading to the client, who does not know that the home inspector paid for the privilege of being placed on that list.

The State of New York, under the enforcement division of the Department of State, is pursuing legal action against inspectors who participate in these pay-to-play schemes. In addition, disgruntled clients may use the existence of a contractual arrangement between an inspector and a real estate agency in a lawsuit against the inspector. Conflicts of interest aren’t just ethical violations, they are a source of potentially significant liability. Home inspectors should be very cautious about developing business relationships with realty agents or brokers that might compromise, or appear to compromise, the integrity of the inspectors, or the profession, and increase their liability. Any financial arrangement with a real estate agency constitutes a slippery slope toward a clear conflict of interest. Many home inspectors welcome and appreciate the referral of business from real estate agents, believing that such referrals represent a genuine expression, on the part of the agent, of confidence in the knowledge, competence, and integrity of the inspector. We strongly believe that, in the long run, adherence on the part of home inspectors to the strong ethical principles embodied in the Code of Ethics, and the avoidance of potential conflicts of interest, will encourage rather than reduce future referrals and recommendations, and will work to the benefit of the profession as a whole.

SUAS Used In Home Inspections

Massachusetts Right to Home Inspection Bill

This bill, if it should become law, will provide every homebuyer, regardless of other conditions of sale, with the right to a state regulated home inspection by a licensed Home Inspector. NYSAHI hardily supports and applauds this initiative and is investigating its politics including how it came to be raised in the legislature, the factions calling for it, those that may oppose it, and the chances for its success in becoming law. This is clearly an essential protection for consumers in perhaps the most expensive and complex purchase of their life. Homes purchased without a proper home inspection can cause the new homeowners life-changing problems including: serious threats to the health of them and their families; money pit situations that can drain limited financial resources; foreclosures by lenders when maintenance and repair demands on new homeowners exceed what they could reasonably anticipate without professional guidance; associated mental and familial distress; etc.

NYSAHI has been greatly concerned about trends in the real estate industry that force home buyers into situations where they must waive state-regulated home inspections to be competitive in their purchase offers. No home should ever be purchased without a proper home inspection. We intend to learn what we can from the Massachusetts initiative and lobby our legislature to begin the process of creating a similar bill in New York State.

This matter is well described in a January 31st, 2023 article by Jim Morrison in the Boston Globe, “Mass. legislators file bill to preserve right to home inspections”.

NYSAHI will keep you posted on developments.

NEW SELLER FORM for SURVEILLANCE DISCLOSURE

Eavesdropping on Home Inspection can be a Felony!
The New York State Association of Realtors (NYSAR) has developed a new disclosure form regarding audio & visual recording device use during real estate activities. Owners/Landlords/Property Managers are advised that if they are not a party to a conversation, it is felony criminal violation of NYS Law to eavesdrop on that conversation using any device, streaming or otherwise, that records or remotely plays the conversation of those involved, such as in real estate-related activities at a subject property (open houses, showings, etc. … home inspections included). This is important for home inspectors and our clients to know, as it relates directly to maintaining client confidentiality during a home inspection.

We understand that NYSAR’s Surveillance Disclosure form should now be in common use in NYS home real estate transactions. NYSAHI highly recommends that you ask your client for a copy of that form at the same time you ask them for a copy of the Property Condition Disclosure. In this way you will help ensure that the new form is used by the listing agent, that it is completed by the seller, and that you and your buyer client are aware of the Surveillance status of the home you inspect for them.

Check the NYSAR website (https://www.nysar.com/) for more information. You may need to login to get access to their notice and the form. Contact us at NYSAHI with any questions or concerns.

A8889
2024
Establishes the right to inspection of residential real properties, condominium units, and cooperative apartments.

Status: ACTIVE: 01/26/2024 referred to judiciary

NYSAHI STRONGLY SUPPORTS a RTHI bill and is active in enlisting sponsorship in the Legislature.

See Document: (NYSAHI Right To Home Inspection Summary)

A10086 / S09430
2023 - 2024
Establishes radon measurement license and radon mitigation license requirements; defines terms; establishes powers and duties of the department of labor and of licensees with regards to such licenses; establishes penalties; establishes the radon mitigation and control fund.

Status: ACTIVE: 05/03/2024 referred to labor

While NYSAHI is in favor of reasonable and right-sized regulation of radon services, we STRONGLY OPPOSE this bill in its current form.

See Document: NYSAHI Memorandum of Opposition to Bill A10086 S9430

A1194A
2019-2020 and related Bills
Creates the well water and water supply education act; requires the department of health to establish and maintain a public education program on the potential hazards of private water supplies; requires home inspectors, licensed real estate agents and brokers to provide private water supply education materials to prospective buyers of property where such property is serviced by a private water supply and contact information for relevant local health organizations.

Status: ACTIVE: Referred to Ways & Means Committee (01/08/2020)
Versions Introduced in Other Legislative Sessions:

A09533 / S00048
2021 - 2022 and related Bills
Enacts the "private well testing act". Authorizes the department of health to promulgate rules and regulations to establish standards for the testing of drinking water from privately owned wells.

Status: ACTIVE: In Committee - Amended and printed as S00048A
Versions Introduced in Other Legislative Sessions:


* NYSAHI is following this legislation but has “back-burnered” it because the Board decided that it is unlikely to become law due to substantial added expense in home sales.

A5054
2023-2024
Enacts the "Lead Free Homes Act"; requires the department of health to promulgate standards for lead remediation and abatement of exemption; provides tax credits to class A multiple dwelling owners who undertake a successful lead remediation or abatement; requires lead testing on drinking water prior to the sale of residential property; requires owners of class A multiple dwellings to perform lead testing and provides for fines for violations.

Status: ACTIVE - Referred to health committee as of 8 Apr 2023

A01967 / S05400
Signed into Law by Governor 9/22/2023 (Effective March 2024, 180 days after 9/22/23)

Amends the real property law, in relation to requiring disclosure of information concerning flood insurance on property condition disclosure statements and repeals section 467 of the real property law relating to liability with respect to property disclosures (Sellers can no longer avoid providing the required Property Condition Disclosure by paying a $500 fine.)

A09135 / S8890
Signed by GOV Aug 2022
Extends the date allowable for tax exemptions for first-time homebuyers of newly constructed homes to December 31, 2028.

(Exemption from property tax cannot be for more than 5 years and must be legally adopted as local law by a municipality or by school board resolution, after public hearing.)

A3714 / S5097
Signed by GOV 12/16/22
Requires the disclosure of indoor mold history upon the sale of certain real property.

New York Property disclosure form DOS 1614 (REV 8/06) has not been updated; Law Effective June 2023