1857 DOS 07
STATE OF NEW YORK
DEPARTMENT OF STATE
OFFICE OF ADMINISTRATIVE HEARINGS
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In the Matter of the Complaint of
DEPARTMENT OF STATE
DIVISION OF LICENSING SERVICES,
Complainant, DECISION
-against-
JOSEF NEUBAUER,
Respondent.
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The above noted matter came on for hearing before the undersigned, Scott NeJame, on September 5, 2007 at the office of the Department of State located at 333 East Washington Street, Syracuse, New York.
The respondent was represented by Janice Robinson, Esq., 102 North Main Street, P.O. Box 728, Naples, New York 14512.
The complainant was represented by Senior Attorney Kenneth L. Golden, Esq.
COMPLAINT
The complaint alleges that the respondent acted as a home inspector without a license.
FINDINGS OF FACT
1) The notice of hearing initially scheduling the hearing for March 8, 2007 together with a copy of the complaint was served on the respondent by certified mail delivered on February 16, 2007 (State’s Ex. 1). Based on requests made either by the complainant or respondent, the matter was adjourned to May 10, 2007, August 21, 2007 and lastly, September 5, 2007.
2) The respondent has never been licensed with the Department of State as a home inspector (State’s Ex. 2).
3) For the past thirty-five years, respondent has worked as a general contractor, a plumbing and heating contractor and a house builder. The respondent provides free estimates to his customers, but if the estimate takes longer than one hour, he charges $50 per hour. The respondent primarily gives oral estimates, but provides written ones if he is hired to do the work.
4) On May 27, 2006, Arthur and Patti Coles (“the Coles”) signed a purchase and sale agreement agreeing to purchase the property located at 9160 Route 53, Naples, New York (“the property”) from owners Martin and Jessica Kane (“the Kanes”) (State’s Ex. 5). The purchase and sale contract contained a number of contingencies, one of which concerned the Coles’ intended use of the property as a pasture for horses and to breed show dogs.
5) Based on a recommendation of real estate agent Cynthia Cole (no relation to the Coles) and on Patti Coles having previously hired the respondent to do contracting work for her, the Coles contacted the respondent to address their concerns about the property and give them an assessment of it related to their intended use of it.
6) The respondent conducted an inspection of the property and addressed the concerns that the Coles had with the property. The respondent took five hours to inspect the property and charged the Coles $250 for his inspection (State’s Ex. 7).
7) Based, in part, on respondent’s inspection finding a number of deficiencies with the property, the Coles declined to proceed with the purchase. On June 16, 2006, the respondent provided Arthur Coles with a one page written report on his inspection, which he termed “home evaluation” (State’s Ex. 4).
OPINION AND CONCLUSIONS OF LAW
I- As the party which initiated the hearing, the burden is on the complainant to prove, by substantial evidence, the truth of the charges set forth in the complaint. State Administrative Procedure Act §306(1). Substantial evidence “means such relevant proof as a reasonable mind may accept as adequate to support a conclusion or ultimate fact... More than seeming or imaginary, it is less than a preponderance of the evidence, overwhelming evidence or evidence beyond a reasonable doubt (citations omitted).” 300 Gramatan Avenue Associates v. State Div. of Human Rights, 45 NY2d 176, 408 NYS2d 54, 56-57 (1978); Tutuianu v. New York State, 22 AD3d 503, 802 NYS2d 465 (2nd Dept. 2005). “The question...is whether a ‘conclusion or ultimate fact may be extracted reasonably--probatively and logically’” City of Utica Board of Water Supply v New York State Health Department, 96 AD2d 719, 465 NYS2d 365, 366 (1983), quoting 300 Gramatan Avenue Associates, supra, 408 NYS2d at 57.
II- Effective December 31, 2005, the Real Property Law was amended by adding a new Article 12-B, “The Home Inspection Professional Licensing Act.” Pursuant to this Act, Real Property Law §444-d provides that it is unlawful for anyone1 to conduct a home inspection for compensation without being licensed as a home inspector. A “home inspector” can be defined simply as someone engaged in performing home inspections of residential buildings for compensation.2 A “home inspection” is
...the process by which a home inspector observes and provides a written report of the systems and components of a residential building including but not limited to heating system, cooling system, plumbing system, electrical system, structural components, foundation, roof, masonry structure, exterior and interior components...to provide a client with objective information about the condition of the residential building. The home inspector shall clearly identify in the written report which systems and components of the residential building were observed. A home inspection shall not include an inspection for radon or pests. Real Property Law §444-b(5).
Since The Home Inspection Professional Licensing Act was recently enacted, there is no judicial precedent drawing a distinction between a person acting as a home inspector as opposed to a person acting similar to one but in some other capacity. It is therefore helpful to look at the intention of the Legislature in enacting the Home Inspection Professional Licensing Act. 97 NY Jur2d, Statutes §101.
As the Court of Appeals stated in People v. Santi, 3 NY3d 234, at 243, 785 NYS2d 405 (2004), “[i]t is equally well settled that, ‘[i]n implementing a statute, the courts must of necessity examine the purpose of the statute and determine the intention of the Legislature’ (Williams, 23 NY2d at 598, 298 NYS2nd 473, 246 NE2d 333). Indeed, ‘[t]he primary consideration of the courts in the construction of statutes is to ascertain and give effect to the intention of the Legislature’ (McKinney's Cons Laws of NY, Book 1, Statutes §92[a], at 177).” Further, in construing the statute, the tribunal should “consider the mischief sought to be remedied by the new legislation, and [it] should construe the act in question so as to suppress the evil and advance the remedy.” McKinney's Cons. Laws of NY, Book 1, Statutes §95; Westchester County Dept. of Social Services ex rel. Melissa B. v. Robert W.R., 25 AD3d 62, 69, 803 NYS2d 672 (2nd Dept. 2005).
As set forth in the legislative memorandum submitted in support of the bill, the justification for the bill reads as follows:
This bill will assure home buyers who pay someone to inspect a home that they will receive competent, professional and accountable services. The bill establishes realistic qualifications for home inspectors, requires a written report about the inspection and sets up public oversight of the home inspection profession. Licensure will identify for consumers those home inspectors who meet minimum requirements and thereby backup a home inspection with credibility. It will give home buyers the assurance that a professional who can be held accountable to the home owner and the profession of home inspectors is doing their inspection.
At this time, there are no requirements or qualifications for home inspectors in New York State. Anyone can offer to inspect a home for a fee and advise a prospective buyer, renter, lessor, lessee or seller about the physical condition of that home. In recent years, people without any credentials or qualifications have presented themselves as qualified professionals who inspect homes. Consumers today have no way of knowing who can do a home inspection or who is doing a good job.
Many purchasers opt for home inspection. The Federal Housing Administration loan program encourages them to do so by allowing a prospective home buyer to finance the cost of a home inspection in their mortgage. Home buyers pay for an inspection to get peace of mind and assurance about the condition of a home. There is, however, no assurance or peace of mind if the person who inspects the home is not qualified to do so and is not held accountable for the inspection on which the buyer relies in purchasing a home.
The purpose of this bill is to protect the public. A home is the biggest purchase that many people will make during their lives. They need to know that the person whom they hire to inspect a home has, at the very least, the background, qualifications and experience to inspect the home.
In this case, the respondent was not providing the Coles with an estimate for repairs or renovations to the property they were contracting to purchase. The respondent was observing and assessing several external and internal components of the property in order to provide the Coles with objective information about those components. The respondent conducted his inspection for compensation and provided the Coles with a written report (which he described as a “home evaluation”) identifying which systems and components of the property he observed along with his findings.
Although the respondent may have innocently believed he was appearing for the Coles solely as a contractor, his actions and representations spoke otherwise. To hold that he was not acting as a home inspector would permit any contractor to provide occasional home inspections without being licensed. More importantly, it would lead to the respondent (and other contractors) not being held accountable if his inspection was incompetently or negligently performed. Had the Coles not been satisfied with the respondent’s evaluation or had they purchased the property based on respondent’s assessment and then realized that respondent had committed errors, they would not have had any recourse against him.
Clearly, the intent of the Legislature in enacting The Home Inspection Professional Licensing Act is so that home buyers such as the Coles are assured that the person they hire to evaluate and address their concerns about their prospective new home is a professional, qualified home inspector who will be held accountable for that inspection. Simply because Patti Coles knew the respondent from having previously hired him to do contracting work for her, does not necessarily mean that he had the necessary background, qualifications and experience to inspect the property.
DETERMINATION
WHEREFORE, IT IS HEREBY DETERMINED THAT Josef Neubauer has acted as a home inspector without a license in violation of Real Property Law §444-n, and accordingly, pursuant to Real Property Law §444-n, he is ordered to cease and desist from acting as a home inspector without a license. Pursuant to Real Property Law §444-n, respondent is further ordered to, by no later than October 31, 2007, pay restitution to Arthur and Patti Coles in the amount of $250 plus interest at the legal rate for judgments (currently 9%) from June 16, 2006. The respondent is directed to submit proof of payment in full of the ordered restitution, by certified mail, to Kathy Scarcella, Customer Service Unit, Department of State, Division of Licensing Services, Alfred E. Smith Building, 80 South Swan Street, 10th Floor, Albany, NY 12201. If respondent submits an application for a license as a home inspector to the Department of State, no action shall be taken on such application until respondent submits proof of payment of the above-ordered restitution.
Scott NeJame
Administrative Law Judge
Dated: September 20, 2007
1The statute has carved out exceptions for certain individuals, such as engineers, architects and code enforcement officials, as well as for persons seeking to qualify for licensure as a home inspector, but none of those exceptions apply to this case.
2Real Property Law §444-b(4) redundantly defines a “home inspector as “a person licensed as a home inspector pursuant to the provisions of this article.”