A bill that would have required licenses for Colorado home inspectors — the only piece of the home-buying process not regulated in some way — was narrowly defeated in a state Senate committee Wednesday.
The 5-4 vote by the Senate Business, Labor and Technology committee came despite repeated references to the alleged sexual assault of a 14-year-old girl by a home inspector last year.
The senators also heard testimony in favor of the regulation from home-inspection associations that certify practitioners, from real estate brokers who work with them, and a state agency that recommended the oversight.
“They are the only party in a real-estate transaction that is unregulated and given unfettered access to a person’s home,” said Ed Hardey, chairman of the Aurora Association of Realtors. “There are no requirements to be one. If you can print a business card, you can be a home inspector, no matter your prison record.”
Senators said the “free market” could better regulate home inspectors than the state.
“There’s only been one criminal prosecution,” committee chairman Sen. David Balmer, R-Centennial, said. “The free market is already regulating home inspectors and I think can continue to regulate them.”
Bill included exam
Sen. Nancy Todd, D-Aurora, sponsored SB-140 following a three-year process that included an official advance review by the state Department of Regulatory Agencies.
“The evidence of harm identified during the course of research for this sunrise review demonstrates financial, emotional and physical harm to consumers in Colorado,” the 22-page DORA report concludes.
The bill would have required home inspectors to pass an exam and criminal background checks and complete continuing education. They would have answered to a seven-member board made up largely of other inspectors.
It is unclear how many home inspectors work in Colorado today, although the nation’s three primary certification associations say it’s at least 800 and as many as 1,000.
More than 96,000 homes were sold in Colorado in 2013, of which as many as 88 percent likely had a home inspection done.
The weight of a home inspection in a real estate deal is huge. Home buyers can cancel a contract based on the outcome of a home inspection or can use it to demand certain repairs by the sellers prior to closing.
A previous effort to regulate the profession came in 2001, but DORA did not endorse the idea then, concluding there was an “appropriate mechanism for the public to be made whole through the small-claims courts rather than licensure.”
DORA’s latest review found a number of instances in which homeowners were harmed because of incompetency, such as missed faults or incorrect calculation of repair costs.
And there was the sexual assault.
Child assaulted
Arapahoe County prosecutors charged Guillermo Figueroa Diaz, 42, with sexually assaulting a child and obscenity, both felonies. A warrant for his arrest has been outstanding since March, when he failed to appear in court.
Diaz ran Morningstar Home Inspection out of his Denver home, court records show, although a website shows an Aurora post office box.
The assault allegedly happened in February 2014 while he was inspecting an Aurora home and followed the child to the home’s upper floor, court records show.
The buyers hired Diaz believing his name was William Fernandez, which prosecutors said was the alias he used for his business. A person who answered the telephone number listed said it was a wrong number.
Morning Star’s website said he is certified by at least two national home inspector associations, although neither organization lists him under either name.
A licensing board, Todd said, would have ensured Diaz could no longer work as a home inspector in Colorado if convicted and could have caught others with criminal pasts.
Sen. Tim Neville, R-Littleton, disagreed.
“Licensure does not provide protection in most cases,” Neville said. Protection of a profession is “based on the good faith of the people who are in it.”
