Legislature(2003 - 2004)

03/27/2003 01:35 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
          CSHB 9(FIN)am - HOME INSPECTORS/CONTRACTORS                                                                       
CHAIR BUNDE announced CSHB 9(FIN)am to be up for consideration.                                                                 
MS. HEATHER  NOBREGA, staff to Representative  Rokeberg, sponsor,                                                               
said she would answer questions, but there were none.                                                                           
SENATOR  DAVIS  moved to  adopt  the  Senate Labor  and  Commerce                                                               
committee substitute to  CSHB 9(FIN)am, version U.  There were no                                                               
objections and it was so ordered.                                                                                               
SENATOR  STEVENS moved  to pass  SCS CSHB  9(L&C) from  committee                                                               
with individual recommendations.                                                                                                
SENATORS SEEKINS and FRENCH arrived at 1:44 p.m.                                                                                
CHAIR  BUNDE  announced that  he  had  been notified  that  other                                                               
people wanted to testify.                                                                                                       
MR.  TERRY DUSZYNSKI,  Fairbanks building  inspector since  1978,                                                               
said  when  this bill  was  introduced,  it was  about  providing                                                               
proper   qualifications  for   home  inspectors,   insurance  and                                                               
continuing  education. However,  this bill  seems to  have gotten                                                               
way out of  control as far as what it's  trying to accomplish. It                                                               
is  tying to  dictate how  an  inspection is  to be  done it  but                                                               
doesn't provide  everything that is  necessary. On page  6, under                                                               
existing  homes, the  provisions do  not specify  what code  they                                                               
refer  to. Another  concern is  subsection (d)  on page  6, which                                                               
specifies that  the inspection  is valid for  180 days  after the                                                               
date the home  inspector signs and dates the  report. However, it                                                               
doesn't keep home inspectors from being sued after six months.                                                                  
On page 10 the  home inspector is held liable for  two years on a                                                               
new construction,  yet the builder  has only a  one-year warranty                                                               
on the house. He thought that was a little out of line.                                                                         
Page 18  contains a list  of components  of a residence  that the                                                               
inspector is  liable for and  includes built-in  appliances, such                                                               
as dishwashers  and built-in ranges.  He thought it goes  too far                                                               
in defining what inspectors are supposed to do.                                                                                 
He said  the language on  page 20 is of  most concern as  it says                                                               
that   inspectors  shall   determine  whether   the  construction                                                               
conforms to relevant provisions of  the construction codes of the                                                               
municipality or  of the  state building  code, as  applicable, at                                                               
each of the  following stages of construction. There  is no state                                                               
building code  for residential construction. The  State of Alaska                                                               
has adopted uniform building codes,  but only for four-plexes and                                                               
above.  Now, home  inspectors are  going  to be  held liable  for                                                               
something  that there  is  no state  law to  follow.  All of  the                                                               
cities  have  different  codes.  Inspectors  need  to  know  what                                                               
standards they will be held to when doing an inspection.                                                                        
MR.  DAVE  OWENS,  Owens  Inspection Service,  said  he  has  not                                                               
supported the bill in the past,  but he could if three amendments                                                               
were adopted.  One would be  to consolidate and create  an Alaska                                                               
state residential  building code  and regulations  for commercial                                                               
building  inspectors. He  said  this bill  does  not address  the                                                               
relationship   between  real   estate   agents  and   third-party                                                               
inspectors.   Liability  is   the  biggest   problem  that   most                                                               
inspectors  have.  If  this  bill   passes  with  this  level  of                                                               
liability,  a good  percentage of  the inspectors  on the  Alaska                                                               
housing  roster that  perform  new construction  will  go out  of                                                               
MS. CAROL PERKINS, Active Inspections,  stated opposition to HB 9                                                               
and  said  the  bill  would  open  inspectors  up  to  a  lot  of                                                               
"lawyering."  She  pointed  out  the building  department  has  a                                                               
grievance  process and  the  authority to  adopt  codes and  make                                                               
amendments  so  that   the  codes  are  adjustable   to  a  local                                                               
MS. NOBREGA said  the first concern is addressed on  page 6, (b).                                                               
She explained that the bill  allows for a preinspection document,                                                               
which talks  about the expectations  and what the  home inspector                                                               
will be doing,  which can vary. This also  applies to appliances.                                                               
A home  inspector might not  look at appliances according  to the                                                               
preinspection document.  She pointed out the  180-day validity of                                                               
the report means that its accuracy  is valid only for that period                                                               
of time. She told members the  provisions on page 10 for bringing                                                               
a claim,  one-year for an existing  home and two-years for  a new                                                               
home, are from  the statute of limitations of when  a lawsuit can                                                               
be  brought. On  page 20,  the state  building code  language was                                                               
inserted to cover the possible eventuality of getting one.                                                                      
MS.  NOBREGA  said  Mr.  Owens'   concerns  about  liability  are                                                               
partially covered in  a compromise. Because the  bill repeals the                                                               
AHFC  provision, section  41, other  provisions were  inserted to                                                               
limit  inspectors'  liability.  One  limits  the  length  of  the                                                               
report's validity,  another limits the  one and two  year period,                                                               
and another limits who can sue them.                                                                                            
Repealing section  41 does  not open  inspectors up  to frivolous                                                               
lawsuits. Now, a  homeowner can only sue for  gross negligence or                                                               
intentional misconduct. Section 41 will  allow a homeowner to sue                                                               
for  regular  negligence  and damage.  The  standard  under  that                                                               
provision is very, very high.                                                                                                   
CHAIR  BUNDE thanked  her for  her explanation  and noted  that a                                                               
motion was pending. He asked for  the roll to be called. SENATORS                                                               
FRENCH, SEEKINS, STEVENS, DAVIS and  BUNDE voted yea and SCS CSHB                                                               
9 (L&C) moved out of committee.                                                                                                 

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