Is Governor Rick Perry responsible for what is going on over at the Texas Real Estate Commission (TREC)? If the governor appoints commission members, is he responsible for the outcome?
With so much activity involving real estate inspectors over the last few years, it is hard to keep up. So, imagine trying to keep up with everything the Commission and the Administrator are doing.
How many ways can a state agency manipulate the system to lower consumer protection standards and create a ‘back-door’ tax for consumers to bear?
How is the hard-working real estate agent supposed to be able to rely on competent, consistent and quality inspections with the commission working to lower the standards for inspectors?
Here are just a few of the shenanigans that have gone on over the last few years. By themselves, they might seem benign. However, watch as this unfolds.
At the 11th hour, poorly written legislation is introduced that mandates ‘Errors & Omissions’ (E&O) insurance for inspectors. TREC asks for an AG’s opinion for help with understanding the hastily prepared legislation, but moves forward anyway.
TREC lobbies for a change in the law that will allow TREC to become an autonomous, self-funded agency. Simply put, employees and appointees of a state agency lobby for laws that will impact the very same agency they work for. How convenient.
The legislature passes legislation that allows TREC to a become self-funded state agency. Wait, there is a catch… TREC owes the state $1,000,000 for the privilege of becoming self-funded.
TREC structures and formalizes a ‘Penalty Matrix’ for inspectors allowing for fines that reach 10 times what an inspector earns in a day.
As a reminder, these financial impact of these fines is passed forward to the consumer.
TREC lowers the required passing score for the exams inspectors must take to become licensed. Schools that teach inspectors the materials to pass the tests stand to benefit.
TREC Commissioners task the Inspector’s Committee to develop standards that alter the Inspection Standards from one in which reporting the condition of the property and systems is replaced with allowing the Inspector to arbitrarily decide that improper conditions aren’t posing a problem (I.e. improper drainage, improper ventilation).
TREC touts the idea of dissolving the Inspector Recovery Fund. The Recovery Fund has approximately $600,000 that Inspectors have paid into the fund. As a reminder, this $600,000 is meant for aiding consumers who have been harmed by incomplete and inaccurate inspections.
Legislation is introduced to Texas Lawmakers that will allow TREC to use those monies to pay off part of the $1,000,000 debt TREC owes the state.
TREC touts a ‘Bond’ for Inspectors, testifying that ‘other states impose a bond on Inspectors. The problem with this testimony is that no other state has a bond anywhere near what TREC has testified to.
This same proposed legislation allows TREC to use fines garnered and gathered by TREC to help pay for the TREC debt.
As a part of this ‘behind the scenes’, at least a couple of things happen.
At least one Commissioner and the Administrator call, text and e-mail Inspectors (licensees of TREC) ‘asking’ them to support this proposed legislation.
(As a reminder, there is nothing like having the person who, ultimately, has control over your license, calling you to influence your support for legislation.)
The potential for an Inspector Committee appointment is discussed with a licensee who is being asked to support this latest legislation.
Several questions and issues should be at the forefront:
• Who is pushing for this legislation?
• Who actually wrote the language in the proposed legislation?
• Are the TREC Commissioners and the Administrator allowed, by law, to lobby for legislation that impacts their agency?
• Is it legal for TREC to lower the test scores that Inspectors must score to become licensed, benefiting schools that teach the Inspectors the test material and then have one or more of those schools lobby lawmakers for this latest TREC legislation?
Over the next few weeks, look for articles that illustrate why the Real Estate Inspection Industry has no business being under the control of the real estate sales profession. The ‘fox guarding the henhouse’ is what should be on everyone’s mind.
Is Governor Perry going to let the Texas Real Estate Commission operate unfettered, as they put into place ‘dumbed down’ Inspection Standards that allow consumers to be harmed? Is he going to let TREC manipulate the Inspector’s exam scoring requirements and then allow the beneficiaries of those lowered required scores to lobby for legislation that financially benefits the Commission, at the expense of consumers?
Are lawmakers going to continue to allow lobbying by appointees and employees of a state agency, that benefits that agency?
The preceding comments and ‘fact patterns’ are my opinion, supported by others in the real estate inspection industry and the real estate sales industry.
There’s more.
