Thread: Texas Commericial Inspections & TREC

An inspector was telling me yesterday that TREC requires a license & insurance for commericial inspections as well as for residential inspections.

I've always thought that we didn't need a license, let alone don't need insurance.

I scoured the TREC website and they only make a vague reference in the FAQs that TREC governs commericial inspections only to the "extent that they apply", which makes no sense to me.

What do you guys think? There isn't a standard for commercial inspections by trec so does TREC require a license for commerical inspections?

Thanks!
Rob

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Robert, we had a thread on this a while back but I can't find it in a search now. Bottom line from my memory (never a good thing to trust) in reading the law there is no distinction between residential and commercial. TREC rules all in real estate transactions that is not covered by another license (pest, a/c, etc.) I thought differently until reading the law. There is a stipulation that the required reporting form is only for 1-4 family dwellings, so you are on your own for report format on anything else. There is also no other SOP to cover commercial, but you are still required to be licensed by TREC. How is that for government at its best? They are going to regulate you but not tell you the rules!

Four years ago when I originally inquired about licensing for home inspectors in Texas I was told that no, there is no separate license for commercial and there are no limits to you inspecting commercial. There is nothing more required to inspect commercial. There are no standards for commercial. There are no particular forms for commercial. If you inspect an apartment building you can write your report anyway you wish. If you inspect a strip mall or office building there are no standards, minimum or max. Obviously to be a home inspector in Texas you have to be insured with E&O so as far as commercial you need E&O. Actually the technical end of things is you don't need E&O until it is time to renew your license.

I am more than likely wrong but If you do not call yourself a home inspector and do not inspect homes one to four family you could probably inspect commercial because you are not a home inspector only if it were not part of a real estate transaction (nothing bought, nothing sold based on your inspection) you are just giving advise (consulting). You do not need to be a home inspector to offer someone advise. You could be a consultant. Of course anything you do for business you must check to see if you need a license for that profession.

If I were to inspect a friends home that was not part of a real estate transaction and I did not use the TREC forms for a home inspection and I was not a home inspector, well, anyone can look at someones home for them and give their opinion as long as you are not passing yourself off as a home inspector. If you are a home inspector and someone wants you to just inspect an HVAC system and nothing else you must inspect it to the SOP for that part of a home inspection but you don't have to fill at the standard TREC formatted inspection form.


If I am wrong on any of this it would be great to know.

Ted

I may have gotten my wording twisted around a bit on the last post but I think to the general gist was correct.

Ted

I would think that it would be spelled out in the TX Home Inspector law. Perhaps somebody can post the section of law that would show the license requirement for a commercial inspection, if in fact one is required at all.

I guess what I was trying to mumble out was.

I guess it is all in the interpretation and or description of what you are performing or passing yourself off as. As a consultant you can inspect to be able to consult but if you are acting as an inspector and it is part of a Real Estate transaction then you must be a licensed home inspector and you must have insurance.

If you are a home inspector and you also inspect commercial then you are already licensed and need insurance. There are no particular forms for the inspection documentation in commercial as Jim stated.

If you wish to advertise as a home inspector and perform home inspections you can not do so until you have your license and you must have insurance.

Ted

Scott go to TREC - Home Page

thanks for the posts but I'm still not clear!

Everytime I've called TREC in the past, I can never get through!

I guess the thinking is that if you are doing a commercial inspection as part of a real estate transaction than you need to have a trec license and E&0?

Here is what TREC posted on the FAQ...I read it to mean that you don't have to have the TREC license but only if you are a TREC licensed inspector than you don't have to use the TREC form.

Q. If a licensed professional inspector is conducting a commercial inspection, is he or she required to use the inspection report form promulgated by TREC? Do the Standards of Practice apply?

A. A licensed TREC inspector is not required to use the promulgated form when inspecting property other than one to four family residential. A TREC licensed inspector may perform inspections on commercial property, as long as no other laws prohibit the inspector from doing so (please check with the Texas Board of Professional Engineering to determine when a Professional Engineer license is required). Yes, the Standards of Practice would apply to commercial property inspections to the extent that they apply.

OCCUPATIONS CODE CHAPTER 1102. REAL ESTATE INSPECTORS
CHAPTER 1102. REAL ESTATE INSPECTORS
(6) "Inspector" means a person who holds a license
under this chapter.

(9) "Real estate inspection" means a written or oral
opinion as to the condition of the improvements to real property,
including structural items, electrical items, mechanical systems,
plumbing systems, or equipment.

§ 1102.002. APPLICABILITY OF CHAPTER. (a) This
chapter does not apply to a person who repairs, maintains, or
inspects improvements to real property, including an electrician,
plumber, carpenter, or person in the business of structural pest
control in compliance with Chapter 1951, if the person does not
represent to the public through personal solicitation or public
advertising that the person is in the business of inspecting those
improvements.
(b) This chapter does not prevent a person from performing
an act the person is authorized to perform under a license or
registration issued by this state or a governmental subdivision of
this state under a law other than this chapter.

§ 1102.103. PROFESSIONAL INSPECTOR LICENSE REQUIRED. A
person may not act as a professional inspector in this state for a
buyer or seller of real property unless the person holds a
professional inspector license under this chapter.

§ 1102.407. CRIMINAL PENALTY FOR PRACTICING WITHOUT
LICENSE. (a) A person commits an offense if the person does not
hold a license under this chapter and knowingly engages in the
business of real estate inspecting, including performing an
inspection while the person's license is revoked or suspended.
(b) An offense under this section is a Class A misdemeanor.


The above is taken directly from the Occupations code from the Texas
Legislature web site.
The way I read it is ALL persons engaging in the business of real estate inspecting have to be licensed. There is no exception for commercial.
The only exception is for those people holding another valid license while practicing under that license.

Originally Posted by Jim Luttrall

person may not act as a professional inspector in this state for a
buyer or seller of real property

There is no exception for commercial.
The only exception is for those people holding another valid license while practicing under that license.

.
Unless there is not a buyer or seller of real property. ( no transaction no license required.)

Unless there is not a buyer or seller of real property. ( no transaction no license required.)

Except for this:

§ 1102.407. CRIMINAL PENALTY FOR PRACTICING WITHOUT
LICENSE. (a) A person commits an offense if the person does not
hold a license under this chapter and knowingly engages in the
business of real estate inspecting, including performing an
inspection while the person's license is revoked or suspended.
(b) An offense under this section is a Class A misdemeanor.

An individual that is not in the business of real estate inspecting can skirt the law, but if you are holding yourself out to be an inspector, then all bets are off, TREC rules apply.

Underlining is mine

1102.002. APPLICABILITY OF CHAPTER. (a) This chapter does not apply to a person who repairs, maintains, or inspects improvements to real property, including an electrician, plumber, carpenter, or person in the business of structural pest control in compliance with Chapter 1951, if the person does not represent to the public through personal solicitation or public advertising that the person is in the business of inspecting those
improvements.

If your business was strictly through word of mouth referrals, you do not have a web site (that would be considered soliciting to the public), no truck signs, no business phone listed in the phone book, etc., and you only had person-to-person contact regarding your business and getting work, then "This chapter does not apply to" you.

§ 1102.103. PROFESSIONAL INSPECTOR LICENSE REQUIRED. A
person may not act as a professional inspector in this state for a
buyer or seller of real property unless the person holds a
professional inspector license under this chapter.




Like I said, no buy, sell, don't advertise as Professional home inspector, do act as a consultant, do not inspect homes, advertise as consultant. I guess there is almost always some technicality to get by. I think those out clauses ear for the good. I do not think any state could possibly shut out any kind of inspection/evaluations by any individual under certain conditions.


Ted

This is a short series of memo's sent to me from another Inspector here. I have left out the Inspectors name out of respect for his privacy.

----Original Message-----
From: Devon Bijansky [mailtoevonB@trec.state.tx.us]
Sent: Tuesday, December 04, 2007 9:38 AM
To:
Subject:

You are correct that a license is required in order to inspect all types of properties; however, you should note that the Standards of Practice as they are written apply to all types of properties (obviously, many departures would be appropriate for commercial inspections). I believe some of the confusion comes from the fact that the standard report form is only required for 1-4 family residential properties.

Devon V. Bijansky
Staff Attorney
Enforcement Division
(512) 465-3960
fax (512) 465-3962



-----Original Message-----
From:
Sent: Tuesday, December 04, 2007 8:55 AM
To: Devon Bijansky
Subject:

Hi Devon,



There was a post at NACHI that said TREC does not regulate commercial inspections. It also states that TREC only regulates 1 through 4 family. That would exclude condos. I thought TREC regulated all property condition matters between buyers and sellers but that there was only a SoP for 1 - 4 residential. Can you educate me on that? I have been thinking I must keep my TREC license to do commercial work.



Thanks

Originally Posted by Ted Menelly

§ 1102.103. PROFESSIONAL INSPECTOR LICENSE REQUIRED. A
person may not act as a professional inspector in this state for a
buyer or seller of real property unless the person holds a
professional inspector license under this chapter.




Like I said, no buy, sell, don't advertise as Professional home inspector, do act as a consultant, do not inspect homes, advertise as consultant. I guess there is almost always some technicality to get by. I think those out clauses ear for the good. I do not think any state could possibly shut out any kind of inspection/evaluations by any individual under certain conditions.


Ted

Ted,

Previous memo's to TREC for clarification led to TREC making a ruling that any property condition inspection for a "Buyer", "Seller" or a person considering "Buying" or "Selling" a piece of real property (even though a contract has not been written) is controlled by TREC. TREC assumes responsibility for residential and commercial inspections for any individual that is not licensed by another agency.

I had also asked for clarification from TREC regarding any type of oral consultations and (in the case of this memo) an energy efficiency inspection and below is TREC's response.

From: Devon Bijansky [mailtoevonB@trec.state.tx.us]
Sent: Tuesday, November 13, 2007 7:17 AM
To: 'escanlan'
Subject: RE: Issue with Home Tune-Up and TREC regulations


Mr. Scanlan:

I apologize for my delay in responding. I was unexpectedly out of the office yesterday.

As a licensed professional inspector, any sort of inspection or property condition consultation performed for a buyer or seller is considered an "inspection" if you are providing a written or oral opinion as to the condition of improvements to real property, regardless of what you call it. Therefore, any such service is subject to Chapter 1102 of the Texas Occupations Code and the TREC Rules.

Inspections of one-to-four-family residential property (for a buyer or seller) must be reported on the TREC REI 7A-0 form, even if you do not intend to do a "typical" Standards of Practice inspection. (As you know, there is no required form for other types of properties.) However, that does not mean that you must always provide the full Standards of Practice-type service every time someone wants to hire you to provide energy efficiency inspection services. Section 535.227(c)(2)-(4) of the TREC Rules (the departure provision) clarifies that you may provide a more specific type of inspection by agreement with your client. By agreement with your client, you may depart from the Standards of Practice in full. However, there is no provision for "departing" from the standard form, so the REI 7A-0 must still be used even if you depart wholly from the Standards of Practice. It would be fine to note in the Additional Information section of the standard form that the energy audit is a part of that report but in a separate computer file.

Please feel free to forward this information to anyone else who may find it helpful.


Devon V. Bijansky
Staff Attorney
Enforcement Division
(512) 465-3960
fax (512) 465-3962

Emanuel

As a licensed professional inspector, any sort of inspection or property condition consultation performed for a buyer or seller is considered an "inspection" if you are providing a written or oral opinion as to the condition of improvements to real property, regardless of what you call it. Therefore, any such service is subject to Chapter 1102 of the Texas Occupations Code and the TREC Rules.
-----------------------------------------------------------------------
Previous memo's to TREC for clarification led to TREC making a ruling that any property condition inspection for a "Buyer", "Seller" or a person considering "Buying" or "Selling" a piece of real property (even though a contract has not been written) is controlled by TREC. TREC assumes responsibility for residential and commercial inspections for any individual that is not licensed by another agency.
-----------------------------------------------------------------------

First paragraph

"As a licensed professional inspector"

Like I said, if you were not a "Home Inspector"

Second Paragraph

"any property condition inspection for a "Buyer", "Seller" or a person considering "Buying" or "Selling" a piece of real property (even though a contract has not been written)"

Like I said not buying or selling. Not part of a transaction and not going to be considered at this time. They just want to know the condition of the property for no one else but them self. (commercial, not home)

Not that any of this matters to me because I am a licensed professional home inspector in Texas. I was not defending anyones action. I was just stating the same case that keeps being made.

For that matter, Elmer Fudd could come an give me an opinion on my home and I thank him by giving him a couple hundred. I just wanted to know a few things about my home for my own good. Elmer seemed like the best bet

Ted

Originally Posted by Ted Menelly

Emanuel

As a licensed professional inspector, any sort of inspection or property condition consultation performed for a buyer or seller is considered an "inspection" if you are providing a written or oral opinion as to the condition of improvements to real property, regardless of what you call it. Therefore, any such service is subject to Chapter 1102 of the Texas Occupations Code and the TREC Rules.
-----------------------------------------------------------------------
Previous memo's to TREC for clarification led to TREC making a ruling that any property condition inspection for a "Buyer", "Seller" or a person considering "Buying" or "Selling" a piece of real property (even though a contract has not been written) is controlled by TREC. TREC assumes responsibility for residential and commercial inspections for any individual that is not licensed by another agency.
-----------------------------------------------------------------------

First paragraph

"As a licensed professional inspector"

Like I said, if you were not a "Home Inspector"

Second Paragraph

"any property condition inspection for a "Buyer", "Seller" or a person considering "Buying" or "Selling" a piece of real property (even though a contract has not been written)"

Like I said not buying or selling. Not part of a transaction and not going to be considered at this time. They just want to know the condition of the property for no one else but them self. (commercial, not home)

Not that any of this matters to me because I am a licensed professional home inspector in Texas. I was not defending anyones action. I was just stating the same case that keeps being made.

For that matter, Elmer Fudd could come an give me an opinion on my home and I thank him by giving him a couple hundred. I just wanted to know a few things about my home for my own good. Elmer seemed like the best bet

Ted

Ted,

Relax, the post was meant to inform and not attack anyone. The problem that we face,you, I and every other Texas licensed Inspector, is that the Occupational Code is definitely in need of revision. There have been so many calls for opinion from TREC legal counsel that are not even made public. That means we don't fully understand the intentions of the OC until a complaint is filed against us, and TREC Legal Counsel makes a determination of what the OC meant.

It does not really matter how we, the Inspectors, interpret the OC. It only matters when it comes time to take administrative action against us and TREC interprets the OC. It would certainly be nice if there were a single repository of these requests that all Texas Inspectors could contribute to and view.

Whaaaaaaaaaaaaaaaaat? You don't like Elmer Fudd???

Just kidding.

I am one of those walking contradictions.

I do believe in rules but I am one that also hates rules.

I like governing myself and have my own set of rules and guidelines but do understand the needs for outer rules and guidelines.


Look at this quote below


"By agreement with your client, depart from the Standards of Practice in full. However, there is no provision for "departing" from the standard form, so the REI 7A-0 must still be used even if you depart wholly from the Standards of Practice."

"you may depart from the standards of practice in full", but?????????????????

Just a little off don't you think.

Calm, I could not be calmer. Just me

Thanks
Mr calm

Ted