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Setback to the powerful real estate industry
Saturday, 10 November 2007

Home inspection limits scuttled
Plan to stop inspectors from suggesting repairs in their reports had support of real estate industry.
State regulators on Friday reversed a decision to streamline home inspection reports, dealing a rare setback to the powerful real estate industry.The about-face followed increasingly vocal outcry from home inspectors and Gov. Mike Easley, who warned that the rule change could harm consumers.

Home inspection limits scuttled

Plan to stop inspectors from suggesting repairs in their reports had support of real estate industry

State regulators on Friday reversed a decision to streamline home inspection reports, dealing a rare setback to the powerful real estate industry.

The about-face followed increasingly vocal outcry from home inspectors and Gov. Mike Easley, who warned that the rule change could harm consumers.
       Home inspectors from across the state, including
         John Farnum of Raleigh, protested in Raleigh
         before the N.C. Home Inspector Licensure Board 
         meeting Friday. Staff photo by Corey Lowenstein

It is unclear whether real estate professionals will continue to push for the change. But experts say their organization, money and influence helped to get the proposal this far in the first place. The group has been traditionally successful at using political clout to get its way. Just this week, the real estate industry helped defeat proposals across the state that would have added a transfer tax to home sales.

Members of the state board that licenses home inspectors voted Friday to reject, for now, a rule change that would have prevented home inspectors from recommending upgrades and safety repairs for homes in the summary section of their reports. Opponents say the real estate industry wanted the change to reduce home inspectors' potential to delay or derail home-sale closings amid a nationwide housing slump.

"The proposed change caused a lot of concern," said James Liles, board vice chairman, who originally supported the measure. "Any time enough information comes to us that generates enough concern, it's important."

The board's decision Friday came one month after it tentatively approved the rule change. The initial ruling fueled fierce opposition from home inspectors statewide -- more than two dozen picketed the N.C. Home Inspector Licensure Board's meeting Friday morning.

A muzzled mouth

One inspector, John Farnum of Raleigh, protested with his hands tied in rope and mouth muzzled to express his outrage.

"This is a victory for homeowners and home buyers in North Carolina," said Frank Moore, a home inspector from Wake Forest who was among those picketing.

The board received dozens of letters from inspectors opposing the change and none in favor.

This week, Easley sent a stern letter to the board asking members to back off the measure, which he said would hurt consumers. Seth Effron, Easley's spokesman, said Friday the governor was pleased, but Effron declined to comment further.

The board voted 4 to 2 to send the proposal back to a committee, which has until March to recommend a new alteration or abandon the effort. Jim Long, the state insurance commissioner who sits on the board, voted in favor of tabling the rule change, a reversal from his support of the rule a day earlier.

Supporters of the measure, led by real estate agent John Hamrick, who began the effort two years ago when he was chairman of the board, said the change would benefit consumers by standardizing all reports and making information uniform and readable throughout.

Opponents argued that it would jeopardize safety by burying important problems or needed repairs in the often-detailed inspection reports.

Several opponents said they were confident that the real estate agents' effort would fade before the board's March deadline to revisit it, despite powerful real estate interests in support of the change.

'Whimpering death'

"I think this may die a quiet, whimpering death," said Marion Peeples, an inspector from Oak Ridge who helped organize the protest.

Board member Liles voted to send it to committee Friday. "It might not come up again," Liles said when asked about the proposed rule's chances of survival.

Liles could have a conflict of his own: He's a licensed real estate broker. The licensure board has, by statute, only one slot for a real estate appointee, and that seat is filled by Hamrick. Easley appointed Liles to the board specifically as a home inspector, a profession in which he is licensed but inactive.   

"There's no inherent conflict because I don't really deal in real estate, I just keep up with it to see what's going on," Liles said.

The N.C. Association of Realtors supports the change but did not initiate the effort, according to statements last month by Tim Kent, executive director of the association. Kent didn't return calls seeking comment Friday, and association spokesman Kevin Bradford declined to comment.

The Realtors' lobby is a national network that has made headlines in recent years over efforts to discourage homeowners to act as their own agents and prevent buyers from using discount services.

This week, real estate professionals helped defeat property transfer-tax proposals in 16 counties statewide, including Chatham and Johnston.

Big donors

The industry has strengthened its political clout in recent years through campaign contributions and other efforts.

According to Durham electoral watchdog Democracy North Carolina, the N.C. Association of Realtors was the state's top political-campaign contributor during the 2006 campaign cycle, giving $615,000 to legislative candidates. That was nearly three times the amount given four years earlier.

The latest annual total included $16,000 to N.C. Senate President Pro Tem Marc Basnight, whose legislative title grants him two of eight appointees to the N.C. Home Inspector Licensure Board.

"They're still a powerful and potent lobby," said Bob Hall, research director of Democracy North Carolina.

"They're trying to influence who gets appointed to various boards and commissions, and one way they do that is by making political donations."

(Staff writer Ryan Teague Beckwith contributed to this report.) 

Staff writer Ryan Teague Beckwith contributed to this report.
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