Report Title:

Home Inspectors; Licensing

 

Description:

Requires licensing of professional home inspectors by the department of commerce and consumer affairs.  Establishes licensing board.  Appropriates funds.

 


HOUSE OF REPRESENTATIVES

H.B. NO.

182

TWENTY-FOURTH LEGISLATURE, 2007

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT


 

 

RELATING TO REGULATION OF HOME INSPECTORS.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


     SECTION 1.  The Hawaii Revised Statutes is amended by adding a new chapter to be appropriately designated and to read as follows:

"Chapter

home inspectors

     §   -1  Definitions.  As used in this chapter, unless the context clearly requires otherwise:

     "Board" means the home inspector licensing board.

     "Client" means a person who engages or seeks to engage the services of a home inspector for an inspection assignment.

     "Compensation" means direct or indirect payment, including the expectation of payment, whether or not actually received.

     "Component" means a readily accessible and observable aspect of a system, such as a floor or wall, but does not include individual pieces, such as boards or nails, many of which similar pieces make up a system.

     "Department" means the department of commerce and consumer affairs.

     "Home inspection" means a visual analysis undertaken to render a professional opinion as to the condition of a building, its carports and garages, any reasonably accessible installed components, and operating systems, including the controls normally operated by the owner, for the following components of a residential building of four units or less:  heating system, electrical system, cooling system, plumbing system, structural components, foundation, roof covering, exterior and interior components, and site aspects as they affect the building.

     "Home inspection report" means a written report prepared for compensation and issued after a home inspection that includes:

     (1)  Identification of the systems and components inspected as required or recommended by the standards of practice for home inspectors adopted by the board;

     (2)  Identification of systems and components inspected that, in the home inspector's professional opinion, are significantly deficient or are near the end of their service lives;

     (3)  Recommendations to correct or monitor the reported deficiencies; and

     (4)  Identification of systems or components designated for inspection in the standards of practice that were in existence at the time of the inspection, but that were not inspected, and the reasons for the lack of inspection.

     "Home inspector" means a person licensed under this chapter who engages in the business of performing home inspections and writing home inspection reports.

     "Readily accessible", as it refers to components of a system, means that a component is available for visual inspection without requiring the removal of personal property, dismantling, destructive measures, or any action that likely will involve risk to persons or property.

     "Residential building" means a structure consisting of one to four dwelling units.

     "Significantly deficient", as it refers to a system or component, means a system or component that is unsafe or not functioning.

     "Standards of practice" means recognized standards and codes to be used in a home inspection, as determined by the board and as established by rule.

     "System" means a combination of interactive or interdependent components assembled to carry out one or more functions.

     "Technically exhaustive", as it refers to an inspection, means an inspection that involves dismantling and the extensive use of advanced techniques, measurements, instruments, testing, calculations, or other means.

     §   -2  Home inspector licensing board.  (a)  There is established within the department a home inspector licensing board consisting of seven members who shall be appointed by the governor as provided in section 26-34.  The members shall be residents of the State, of which:

    (l)   Four members shall be licensed home inspectors who:

         (A)  Have been actively engaged in the practice of home inspection for at least five years preceding their appointment; and

         (B)  Have performed a minimum of five hundred home inspections for compensation; and

     (2)  Three members shall be public members with no financial interest in or connection to the home inspection industry.

Industry members appointed under paragraph (1) to serve on the initial licensing board shall be exempt from the licensure requirement, but shall provide proof of passage of an examination administered by a national examination organization that complies with the standards established by the National Commission for Certifying Agencies.

     (b)  Each member shall serve for a term of four years, and until the member's successor is appointed and qualified; provided that the terms of the initial members shall be staggered as provided for in section 26-34.

     (c)  Board members affiliated with any school teaching home inspection shall disclose that affiliation and at all times adhere to chapter 84 and the interpretations of that chapter by the state ethics commission.

     (d)  Members shall serve without compensation, but shall be reimbursed for expenses, including travel expenses, necessary for the performance of their duties.

     §   -3  Powers and duties of board.  In addition to any other powers and duties authorized by law, the board shall:

     (1)  Administer and enforce this chapter;

     (2)  Issue, renew, suspend, revoke, or reinstate licenses;

     (3)  Conduct investigations or hearings regarding complaints for violations of this chapter;

     (4)  Establish standards for home inspector continuing education;

     (5)  Adopt and publish a code of ethics and standards of practice for home inspectors;

     (6)  Prescribe or change the fees charged for examinations, license issuance and renewals, and other services; and

     (7)  Adopt rules pursuant to chapter 91.

     §   -4 License required.  (a)  No person shall provide home inspection services for compensation or represent the person's self as a home inspector unless licensed under this chapter.

     (b)  No business entity shall provide home inspection services for compensation or use any name or title implying that the business entity provides home inspection services, unless each of the inspectors employed by the business entity is licensed under this chapter.

     §   -5 Licenses; application; issuance.  (a)  An applicant for a home inspector's license shall file with the board a written application on a form prescribed by the board and pay the prescribed application fee.

     (b)  The board may grant a license to an applicant if the applicant provides to the board satisfactory evidence that the applicant:

     (1)  Is of good moral character;

     (2)  Has successfully completed high school or its equivalent;

     (3)  Has completed a board-approved course of study of no less than eighty hours on inspection of the following components of a residential building: heating system, cooling system, plumbing system, electrical system, structural components, foundation, roof covering, exterior and interior components, and site aspects as they affect the building;

     (4)  Has met the training end experience requirements established by rule by the board; and

     (5)  Has passed the National Home Inspector Examination offered by the Examination Board of Professional Home Inspectors or other comparable nationally-recognized licensing examination.

     §   -6  License renewal; continuing education requirement. (a)  All licensee issued by the board shall be renewed triennially, on or before December 31 of the renewal year.

     (b)  Failure to renew a license shall result in a forfeiture of the license.  Licenses that have been forfeited may be restored within one year of the expiration date upon payment of renewal and restoration fees.  Failure to restore a forfeited license within one year of the date of its expiration shall result in the automatic termination of the license.  Persons with terminated licenses shall be required to reapply for licensure as a new applicant.

     (c)  Prior to each license renewal, all licensed home inspectors shall have completed twenty credit hours in board-approved continuing education courses; provided that a licensee who has graduated from a board-approved course of study within one year of the licensee's first license renewal period shall not be subject to the continuing education requirement for the first license renewal.

     (d)  Each licensee shall maintain the licensee's own continuing education records.  At the time of renewal, each licensee shall provide evidence satisfactory to the board that demonstrates compliance with the continuing education requirement of this section.

     §   -7  Persons exempt from licensure.  This chapter shall not apply to:

     (1)  Any person who is employed as a code enforcement official by the State or any of its political subdivisions when acting within the person's scope of government employment;

     (2)  Any person performing a home inspection that will be used solely by a bank, savings and loan association, credit union, or other financial institution to monitor the progress on the construction of a residential structure;

     (3)  Any person employed as a property manager for a residential structure acting within the scope of the person's employment if the person does not receive separate compensation for the inspection work; or

     (4)  Any person licensed by the State in the following professions and performing inspections within the scope of that person's license: architect, contractor, electrician, insurance adjuster, pest control operator, plumber, professional engineer, real estate appraiser, real estate broker, and real estate salesperson.

     §   -8 Fees.  (a)  The board, by rule, shall establish, prescribe, or amend the fees for license issuance, renewal, and restoration, and for other services provided under this chapter; provided that fees shall not exceed amounts necessary to defray the related administrative costs.

     (b)  All fees shall be paid to the credit of the compliance resolution fund established under section 26-9(o) and managed in accordance with section 26-9(l).

     §   -9  General standards and limitations of practice.  (a) A home inspector contracted to perform a home inspection shall inspect readily accessible installed systems and components of residential buildings and provide a signed, written inspection report within five business days of performing an inspection.  A home inspector may:

     (1)  Inspect other systems or components, in addition to those required or requested;

     (2)  Specify recommended repairs, if appropriately qualified; and

     (3)  Exclude systems and components from the inspection if requested by the client.

     (b)  Home inspectors are not required to perform inspections that:

     (1)  Are technically exhaustive; or

     (2)  Identify concealed conditions or latent defects.

     §   -10  Limitations on scope of home inspection.  (a)  This chapter does not require a home inspector to perform any action or make any inspection that is contrary to the standards of practice as adopted by the board, and this section.

     (b)  Home inspectors are not required to determine:

    (l)   The condition of systems or components that are not readily accessible; provided that the home inspection report shall specify which systems or components were not inspected pursuant to this exclusion;

     (2)  The remaining life of any system or component;

     (3)  The strength, adequacy, effectiveness, or efficiency of any system or component;

     (4)  The causes of any condition or deficiency;

     (5)  The methods, materials, or costs of corrective work;

     (6)  Future conditions, including but not limited to the failure of systems and components;

     (7)  The suitability of the property for any specialized use;

     (8)  The property, system, or component's compliance with regulatory requirements;

     (9)  The property's market value or marketability;

    (10)  The advisability of the purchase of the property;

    (11)  The presence of potentially hazardous plants or animals, including but not limited to wood-destroying organisms or diseases harmful to humans;

    (12)  The presence of any environmental hazards, including but not limited to toxins, carcinogens, noise, and contaminants in soil, water, or air;

    (13)  The operating costs of systems or components; or

    (14)  The acoustical properties of any system or component.

     (c)  Home inspectors are not required to:

     (1)  Offer or perform any act or service contrary to law;

     (2)  Offer or perform engineering or architectural services;

     (3)  Offer or perform work in any trade or professional service, other than home inspection; or

     (4)  Offer any warranties or guarantees.

     (d)  Home inspectors are not required to operate:

     (1)  Any system or component that is shut down or otherwise inoperable;

     (2)  Any system or component that does respond to normal operating controls; or

     (3)  Shut-off valves; provided that the home inspection report shall specify which system or component was not inspected pursuant to this exclusion.

     (e)  Home inspectors are not required to enter:

     (1)  Any area that, in the home inspector's opinion, is likely to be dangerous to the home inspector or other persons, or the inspection of which is likely to damage the property, its systems, or its components; or

     (2)  Under-floor crawl spaces or attics that are not readily accessible; provided that the home inspection report shall specify which areas were not inspected pursuant to this exclusion.

     (f)  Home inspectors are not required to inspect:

     (1)  Underground items, including but not limited to underground storage tanks or other underground indications of their presence, whether abandoned or active;

     (2)  Systems or components that are not installed;

     (3)  Decorative items;

     (4)  Systems or components that are not entered;

     (5)  Detached structures, other than garages and carports; or

     (6)  Common elements or common areas in multi-unit housing projects, such as condominiums or cooperative housing developments.

     (g)  Home inspectors are not required to:

     (1)  Perform any procedure or operation that, in the home inspector's opinion, is likely to be dangerous to the home inspector or other persons, or the inspection of which is likely to damage the property, its systems, or its components;

     (2)  Move suspended ceiling tiles, personal property, furniture, equipment, plants, soil, snow, ice, or debris; or

     (3)  Dismantle any system or component, except as explicitly required by the standards of practice.

     §   -11  Denial, suspension, or revocation of license; conditions for reinstatement.  (a)  The board may refuse to issue or renew, or suspend or revoke a license on any of the following grounds:

     (1)  Performing, or offering to perform, for an additional fee, any repairs to a structure for which the applicant or licensee or the applicant's or licensee's employer has performed a home inspection within the preceding twelve month; provided that repairs performed pursuant to a claim under a home protection contract are not prohibited under this paragraph;

     (2)  Inspect for a fee any property in which the applicant or licensee or applicant's or licensee's employer has a financial interest, or any interest in the transfer of the property;

     (3)  Offering or paying any compensation, inducement, or reward to the owner, broker, or agent of the inspected property, for the referral of any business to the applicant or licensee or the applicant's or licensee's employer; or

     (4)  Accepting an engagement to inspect or to prepare an inspection report if the engagement or compensation is contingent upon either the conclusions in the report, pre-established findings, or the close of escrow.

     (b)  The board, as a condition of removing a limitation on a license or reinstating a suspended or revoked license, may require a licensee to:

     (1)  Obtain insurance against loss, expense, and liability resulting from error and omissions or neglect in the performance of services as a home inspector; or

     (2)  File with the board a bond furnished by a surety company authorized to do business in the State and in an amount approved by the board.

     §   -12 Complaints registry.  Notwithstanding any other law to the contrary, in lieu of investigating a complaint for an alleged violation of this chapter, the board may place in a registry a complaint against a licensee, the licensee's response, and any records concerning the complaint; provided that:

     (1)  The board shall provide the licensee with a copy of the complaint no late than thirty days after receipt of the complaint;

     (2)  The licensee may have placed in the registry the licensee's statement concerning the accuracy or relevance of the information contained in the complaint;

     (3)  The complaint and licensee's statement in response shall be available to the public;

     (4)  All records relating to a complaint filed against a licensee shall be removed from the registry if no further complaints have been filed against the licensee within two years from the filing of the complaint; and

     (5)  Unworthy or frivolous complaints shall be removed from the registry.

     §   -13  Home inspector liability.  No party, other than a client of a home inspector, may bring an action to recover damages for the home inspector's acts or omissions in performing the inspection.  An action shall be filed no later than one year from the date of the inspection."

     SECTION 2.  There is appropriated out of the general revenues of the State of Hawaii the sum of $       , or so much thereof as may be necessary for fiscal year 2007-2008, to implement a home inspector licensing program.

     The sum appropriated shall be expended by the department of commerce and consumer affairs for the purposes of this Act.

     SECTION 3.  The department of commerce and consumer affairs may appoint an administrative assistant and secretary, without regard to chapter 76, Hawaii Revised Statutes, to assist with the home inspector licensing program.

     SECTION 4.  This Act shall take effect on July 1, 2008; provided that:

     (1)  Sections    -2 and    -3 of section 1 of this Act and section 3 of this Act shall take effect upon approval; and

     (2)  Section 2 of this Act shall take effect on July 1, 2007.

 

INTRODUCED BY:

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