Bills affect realty issues

Assembly passage of home-inspector licensing a victory

`A kind of odd session'

Real estate panel is re-authorized for 10 more years

April 29, 2001|By Robert Nusgart | Robert Nusgart,SUN REAL ESTATE EDITOR

Unlike in recent years, when the fight to register new-home builders was finally passed and the change to semiannual property tax collection helped cut Maryland's high closing costs, this year's General Assembly session turned out to be a rather calm, workmanlike session as far as industry trade groups were concerned.

"It was a kind of odd session," said Mary Antoun, executive vice president of the Maryland Association of Realtors. "We really didn't have a huge agenda this year going into it, and I really didn't anticipate it being a huge year."

Overall, the session, which ended this month, touched on several issues. They included the reauthorization of the Maryland Real Estate Commission for another 10 years and granting the commission the power to impose civil penalties on people who sell real estate without a license.

There was also a budding dialogue between the Home Builders Association of Maryland and legislators about redefining Smart Growth in terms of creating a statewide formula for defining "buildable lots."

Perhaps the most significant legislation to be passed, however, was the licensing of home inspectors, which gives consumers a way to file complaints against incompetent inspectors and provides the state with some knowledge of who's working the business.

It was a triumph for Del. Dan Morhaim, a Baltimore County Democrat, who for five years had been trying to get some sort of registration for home inspectors on the books. But it wasn't until he teamed with Del. Brian Moe, a fellow Democrat representing Prince George's and Montgomery counties, that the legislation sailed through the House and Senate.

"It made sense. It was balanced. I think it was very pro-consumer, which is the important thing," Morhaim said. "It is not about accommodating home inspectors. When consumers have problems there is some place to turn, and without this legislation there is no place to turn, except to call your attorney - and how many people will do that.

"It was a long-term project, but anybody who buys or sells a home, this helps bring some real integrity to that part of the process."

The legislation, which had wide support from the home inspection industry and the Department of Labor, Licensing and Regulation, revamps the state board that governs real estate appraisers. It adds four members from the home inspection industry as well as two additional consumer members to create the State Commission of Real Estate Appraisers and Home Inspectors.

If the legislation is signed by the governor, it will take effect Oct. 1

Consumers usually use a home inspector when purchasing a home and rely on them for information about its condition. Most real estate contracts have a clause that calls for a home inspection and makes the sale contingent on an inspection that satisfies both buyer and seller.

Current law

Under current law, the only thing a home inspector is required to do is give each customer a disclosure that details the value and limitations of a home inspection. There were no specific qualifications that a home inspector must have.

The new legislation will grandfather in existing home inspectors - by July 1, 2002 - who are members either of the American Society of Home Inspectors or the National Association of Home Inspectors or who have conducted at least 100 fee-paid home inspections.

Those wanting to enter the business must complete at least 48 hours of a nationally or commission-approved off-site training course; have a high school diploma; carry general liability insurance of $50,000; submit a completed commission application; and pay the $50 application fee.

The license, which will cost $400, is good for two years.

The board will hear consumer complaints and is authorized to charge an inspector who works without a license with a criminal misdemeanor and to fine that person up to $5,000 with one year in prison.

"The state doesn't even really know under the current system how many home inspectors there are," MAR's Antoun added. "And so many people rely on home inspections that even the industry itself understands and wants a good inspection law."

Civil penalties

Legislators also passed legislation giving the state's real estate commission the power to impose civil penalties on people who sell real estate without a license.

Antoun said this happens mostly with out-of-state real estate agents who cross the state line to conduct a transaction in Maryland.

Since the real estate commission had power over only those licensed in Maryland, it had no authority to punish agents not licensed by the state.

"Up until now, if you practiced real estate without a license, the commission doesn't have any authority over you, because you are not licensed," Antoun said. "All they could do when they got a complaint is forward it to the attorney general. And unless you are doing something so extremely egregious, it has a hard time moving up the [prosecution] list."

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