April, 2005
Legislative News
Inspection News and Views from the American Society of Home Inspectors



New Bills and Updates on Key Bills

BOB KOCIOLEK

Statewise will report on bills of interest to the profession as they are introduced. We will update the most important bills monthly. Space considerations may preclude an update on every bill. Please refer to last month’s Statewise to get a complete history of any bill.

Arizona Bill Introduction —
HB 2673 states that a home inspector may receive a referral fee from an entity, including a home security company, operating in an area outside the scope of the home inspection. The Committee on Commerce held a hearing for HB 2673 on February 16, 2005. The bill failed to pass out of the committee, with five “no” votes and three “yes” votes.

California Bill Introduction —
AB 886 Existing law specifies what actions are considered unfair business practices by home inspectors, companies employing home inspectors, or companies with a financial interest in a company employing a home inspector. This bill would exempt roofing contractors that perform repairs as a result of a roof inspection from complying with these standards. AB 886 was introduced by the Committee on Business and Professions and read for the first time on February 18, 2005.

Hawaii Legislation Update — SB 109 As reported earlier, Senator Ron Menor has introduced legislation that may affect home inspectors. The bill relates to real estate brokers and salespersons. SB 109 states that a real estate salesperson is not responsible for independently verifying the accuracy or completeness of any statement made by any qualified third-party inspector. SB 109 also states that a real estate licensee is not required to disclose to any party of the transaction information regarding the physical condition of the property if a qualified third party has prepared a written report on the physical condition. However, the licensee shall disclose to all parties any facts actually known by the licensee that were omitted from or that contradict any information included in such report. If the licensee fails to perform any of these duties, the licensee would not be held liable for punitive or exemplary damages unless evidence shows that the licensee acted toward the plaintiff with “willful or wanton conduct, fraud or malice.”  

The Consumer Protection and Housing Committee held a hearing for SB 109 on February 14, 2005. The committee recommended that the bill be “held,” meaning the committee decided not to return SB 109 to the full Senate for further consideration.
Indiana Bill Introduction — SB 139 relates to the licensing of various professions. In specific reference to home inspectors, the bill removes the provision that the Home Inspector Licensing Board shall establish a fee for each hour of continual education that is required after a license is issued or renewed. The bill also states that the Indiana Professional Licensing Agency shall establish a date that home inspector licenses shall be renewed biennially upon payment of the required renewal fees. This would change current Indiana law, which states home inspector licenses expire two years after date of issuance.

SB 139 was referred to the Committee on Government Affairs and Interstate Cooperation. The committee recommended amending the bill and passed it unanimously. The bill was read for a second time and ordered engrossed. On February 15, the bill was read for a third time and passed 47 to 1. The bill then was referred to the House, with Representative Alderman as sponsor.

Kansas Legislation Introduction — HB 2269 defines “home inspection,” “home inspection report,” and “home inspector.” “Home inspection” is defined as a noninvasive visual examination of the mechanical, electrical and plumbing systems, and the essential and structural components of a residential dwelling. Home inspection does not include inspections for wood-destroying insects, underground tanks and wells, septic systems, swimming pools and spas, alarm systems, air and water quality, tennis courts and playground equipment, pollutants, toxic chemicals and environmental hazards.

The bill also states that any provision in an agreement or contract issued by a home inspector for a home inspector report that contains language limiting the home inspector’s liability as to any system or component of the residential dwelling covered by such report is against public policy and void. HB 2269 is similar to legislation that was introduced last session.

On February 2, 2005, the Judiciary Committee introduced HB 2269. The bill was referred to the Judiciary Committee on February 3, 2005.

Michigan Bill Introduction — HB 4134 and HB 4135 were introduced by Representatives Lemmons III and Lemmons Jr. These two bills are similar to the bills Representative Accavitti introduced recently, HB 4076 and HB 4077.

HB 4134 defines home inspection and home inspection services. The bill creates the Home Inspectors Board, which will issue licenses to home inspectors. Beginning the effective date of the bill, an individual cannot provide inspection services unless licensed as a home inspector. Representative Accavitti’s proposed bill would have the

Home Inspector Board promulgate rules to set minimum standards for home inspector education, experience and examinations. HB 4076, however, would adopt the National Association of Home Inspector’s license qualifications, educational standards and examinations. Under HB 4076, the governing department, upon advice of the Home Inspectors Board, would determine whether applicants not affiliated with NAHI otherwise meet the adopted standards. The bill would also allow the department to set examination standards for applicants not meeting NAHI’s education and experience standards.

HB 4134 requires a home inspector to furnish a “disclosure statement” and provides criteria for the statement. The bill also outlines contract provisions that a home inspector is required to provide.

The bill was referred to the Committee on Regulatory Reform on February 1, 2005.
Representatives Lemmons III and Lemmons Jr. also introduced HB 4135, which sets the fees for home inspectors seeking licensure. The following fees would be enacted: $15 application processing fee; $50 examination fee; $20 examination review fee; and $40 annual license fee. Representative Accavitti’s proposed legislation on licensing fees, HB 4077, would enact the same examination fees, but a $40 application-processing fee and a $210 annual license fee. Last session, Representative Accavitti proposed legislation with the same fee structure as HB 4135.

HB 4135 also was referred to the Committee on Regulatory Reform on February 1, 2005.

As reported last month, Nebraska LB 660 was introduced to create licensing. The bill was referred to the Judiciary Committee and a hearing was scheduled for March 2, 2005.

New Hampshire Bill Introduction — HB 642 requires the State Building Code Review Board to develop state standards for home inspections. The bill permits municipalities to register home inspectors, supervise home inspections, and to hear complaints about home inspectors before the Zoning Board of Adjustment. The bill also states that municipalities may establish fees to defray the costs of administration, implementation and enforcement of home inspection standards. HB 642 would take effect 60 days after its passage. HB 642 was introduced by Representative Harry Gale, a real estate broker, on January 26, 2005, and referred to the Municipal and
County Government Committee. A hearing was scheduled for March 16, 2005.

New York Bill Introduction — A05537 amends requirements under the Property Condition Disclosure Act. The bill states that when a buyer elects to retain the services of a licensed home inspector, architect or engineer to inspect the residential property prior to or as a condition of the sales contract, a property disclosure form is unnecessary.

On February 23, A05537 was introduced by Representative Cohen and referred to the Judiciary Committee.

As reported in last month’s Reporter, North Dakota HB 1507 states the requirements for registration. On February 14, 2005, the Committee on Government and Veteran Affairs passed an amended version of the bill that removed the provision that the Secretary of State would adopt rules requiring errors and omission insurance as a registration condition. It also states that to become a licensed home inspector, one must have errors and omissions insurance in the amount of $50,000. Finally, it states that an applicant shall submit proof of completion of an examination offered by the American Society of Home Inspectors, the National Association of Certified Home Inspectors, the Examination Board of Professional Home Inspectors or the International Code Council.

On February 16, 2005, the Appropriations Committee recommended the bill be amended a second time and passed it out of committee by a vote of 15 to 7. The amendment required errors and omissions insurance in the amount of $100,000 rather than $50,000. The House voted on the amended HB 1507 on February 17, 2005, where it passed 59 to 29. The bill was then referred to the Senate. On February 23, 2005, the bill was read in the Senate for the first time and referred to the Industry, Business and Labor Committee.

Oregon Legislation Introduction — SB 514 relates to insurance requirements for contractors which, under Oregon law, encompasses home inspectors. The bill eliminates the obligation that contractors licensed by the Construction Contractors Board have public liability, personal injury and property damage insurance covering the work of the contractor. SB 514 was introduced by Senator Atkinson on February 9, 2005, and was referred to the Business and Economic Development Committee on February 11, 2005.

Oregon Legislation Introduction — SB 554 relates to insurance requirements for contractors which, under Oregon law, encompasses home inspectors. The bill states that the Construction Contractors Board may issue a certificate of self-insurance to a general contractor or specialty contractor if the contractor: is a residential-only contractor, has filed the appropriate application, has established that he or she possesses the ability to pay and discharge judgments, and has agreed to pay the same amounts with respect to judgments that an insurer would be obligated to pay if he or she had the required insurance of a non-self-insured contractor. SB 514 was introduced on February 14, 2005. The bill was then assigned to the Business and Economic Development Committee on February 15, 2005.

Rhode Island Bill Introduction — S 468 amends the Home Inspector Licensure Law. The bill would provide that home inspectors would be eligible for licensure upon engaging in the practice of home inspections for compensation for not less than one year prior to July 1, 2004, and upon performing not less than 100 home inspections for compensation prior to July 1, 2004. Current law states July 1, 2003. S 468 was introduced on February 10. The bill has been referred to the Senate Financial, Technology and Regulatory Issues Committee.

South Dakota HB 1147 states that no person may transfer any residential building for any valuable consideration unless the buyer has retained the services of a home inspector. The licensed home inspector shall conduct an inspection and make a written evaluation to be given to the buyer, seller and real estate broker prior to closing.

The bill also states that the buyer must initiate any civil action against the seller based on discovery of defect within one year of entry. The buyer cannot initiate any action against the seller if the buyer and seller mutually agree in writing to waive the inspection and written evaluation, or if the terms of the contract provide for the supersession of any or all of the provisions of HB 1147. The buyer, however, cannot bring cause of action against the home inspector.

Representatives Lange, Bradford, Dennert and Elliot introduced HB 1147 on January 26, 2005. The bill then was referred to the House Commerce Committee. At a February 3, 2005, hearing, the committee amended Section 2 of the bill by replacing the word “shall” with “may.” The amended text now reads:  “In the transfer of any residential building to which the provisions of Section 1 of this act apply, the buyer may initiate any civil action against the seller based on discovery of defect or warrantability within one year of entry.” The amended bill was deferred until the 41st day of the legislative session. Since South Dakota only has a 40-day session, the bill is “dead.”

As reported last month, Tennessee HB 0006 sets new licensing requirements for inspectors. It was referred to the Commerce Committee and the Committee on Government Operations for review. The bill then was referred to the Commerce Committee and the Committee on Government Operations for review. A hearing on the bill was held February 16, 2005, in the Committee on Government Operations. The committee recommended the bill for passage and referred it to the Commerce Committee.

HB 0006 then was assigned to the Commerce Committee’s Small Business Subcommittee. The Commerce Committee’s Small Business Subcommittee held a hearing for HB 0006 on March 1, 2005.

On March 1, the committee recommended the bill for passage with amendments. The bill then was referred to the Commerce Committee. The amendments included redefining “home inspection report” by deleting the requirement that a home inspector estimate the remaining service life of a system or component. The amended bill also deleted the requirement that a home inspector recommend how to remedy a system or component deficiency. The list of environmental hazards not included in a home inspection report was altered, with the word “mold” being replaced with “fungus.”  In addition, the subsection that exempts persons with a contractor’s license from pre-license education was deleted. In the list of prohibited acts, the amended bill would change “Using a home inspection to deliberately obtain work in another field or profession” to “Using a home inspection with the intention to obtain work in another field or profession.”

The amended bill also made changes in relation to the Commissioner of Commerce and Insurance. First, the word “experts” was replaced with “persons with at least five years’ experience” when referring to the commissioner’s advisory panel. The amended bill also directs the commissioner to appoint at least one member from each of the various home inspector trade groups, and adds language allowing the commissioner to accept a bond in lieu of a certificate of errors and omissions insurance. A new section was added, which authorizes the commissioner to promulgate the necessary rules, and the effective date was changed from January 1, 2006, to July 1, 2006.