A new state law that would allow property and business owners to hire private, third-party building inspectors is prompting towns across the state to review their existing policies on third-party inspectors.

“We reached out to town counsel specifically to review the third-party town inspection policy,” said Peterborough Town Administrator Nicole MacStay.

According to the NH Municipal Association, SB 188, which was signed into effect in July 2025, “was introduced to accelerate the development process in New Hampshire by allowing licensed or certified third-party professionals – referred to as ‘approved agencies’ – to conduct building inspections and construction document reviews in place of local building officials.”

The bill requires that “approved agencies be objective, independent, and properly credentialed (e.g., licensed engineers, architects, or ICC-certified building officials).”

MacStay presented a draft of the town’s updated Building Permit and Third-Party Inspection Policy to the Select Board on August 4.

Select Board Member Bonnie Tucker said that after reviewing the draft of the policy and reading the law, she had concerns about language in the draft stating that a town inspector would have the right to re-inspect a project even after a third-party inspector had signed off on it.

“The law says that the municipal inspector can audit among third-party inspectors to check the work of a specific inspector. The law does not require that the town inspector be able to do an inspection on every project. That is not in there,” Tucker said. “Physically double-inspecting is not in there. It goes against the intent of the policy or the law.”

Several members of the public in attendance questioned how many building permits are currently in the “backlog” with the Town of Peterborough and asked how long it typically takes for a residence or business to receive a Peterborough building permit.

Select Board member Bill Kennedy said that the number of permits in the queue at any given time depends on the volume of permits received and the types of projects underway.

“It is all about the volume. It differs from day to day,” Kennedy said. “In the past two years, Tim (building inspector Tim Herlihy) has been really overwhelmed.”

In response to additional questions about potential delays in permitting, Kennedy said some delays are caused by applicants not submitting complete information or failing to remit payment.

“Incomplete permit applications are a big hold up. Collecting the check is also a big hold up. Those are things we need to streamline. We are trying to streamline the permitting process, and to automate it, so that when you’re filling out the permitting process, you’ll have to step through it electronically, and you can’t go to the next step until you complete the one before it,” Kennedy said.

Carol Nelson, a member of the public, pointed out that the third-party building inspector policy indemnifies the town against any liability.

“If the third-party inspector messes up, the town is indemnified,” she said.

Tucker said she is putting forward language for the draft regarding time delays caused by disagreements in the permitting process.

“One thing I have put forward, that I didn’t see in here, is that one thing I do know that can really hold things up is when there are differences of opinion about a situation; it can fester. One of the things that I am advocating for is a formal escalating process, with time frames, so that if something is being contested, that it will either get quickly resolved, or it goes up (to the next level of the process). There will be a pre-set time for how long something can stay at any level before it moves up, so that is something we will be moving forward with,” Tucker said.

MacStay said there is currently a Peterborough developer who is “very interested” in using the third-party inspection process permitted by SB 188.

“It is important that we have something in place, so that everyone has an understanding of what the process will be,” MacStay said.

According to MacStay, the draft of the policy is in the first stage of review, will return to town counsel, and will then be reviewed again at the next meeting of the Peterborough Select Board.

MacStay said that SB 188 is not explicit on who has the final say on the policy.

“The law is not completely clear on who has the authority to adopt the policy, whether it is the Select Board, Town Meeting, or the state Building Review Board, so we are going to put it through all three processes,” she said.

MacStay added that developers currently wanting to utilize third-party inspectors “will not have to wait for Town Meeting in May.”

“So long as they agree to it and understand this is the process, they can go through and use this policy,” she said. “It will have to go to town meeting as well to be sure it has been approved by all parties involved.”