1976 South Carolina Code of Laws
Unannotated
Updated through the end of the 2001 Session

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Title 40 - Professions and Occupations

CHAPTER 59.

RESIDENTIAL HOME BUILDERS

ARTICLE 1.

RESIDENTIAL HOME BUILDERS GENERALLY

SECTION 40-59-10. "Residential builder" defined.

For the purpose of this chapter, a "residential builder" is one who constructs a residential building or structure for sale or who, for a fixed price, commission, fee, or wage, undertakes or offers to undertake the construction or superintending of the construction of any building or structure which is not over three floors in height and which does not have more than sixteen units in the apartment complex, or the repair, improvement, or reimprovement thereof, to be used by another as a residence when the cost of the undertaking exceeds five thousand dollars. Nothing in this chapter prevents any person, or his agents, from performing these acts on his own residence or on his other real estate held for personal or rental, as opposed to speculative, purposes. Anyone who engages or offers to engage in such undertaking in this State is considered to have engaged in the business of residential building.

SECTION 40-59-15. Residential specialty contractors.

A residential specialty contractor is an independent contractor who is not a licensed residential builder, who contracts with a licensed residential builder, general contractor, or individual property owner to do any construction work, repairs, improvement, or reimprovement which requires special skills and involves the use of specialized construction trades or craft, when the undertakings exceed two hundred dollars and are not regulated by the provisions of Chapter 11 of this title.

Residential specialty contractors is limited to:

(a) plumbers;

(b) electricians;

(c) heating and air conditioning installers and repairers;

(d) vinyl and aluminum siding installers;

(e) insulation installers;

(f) roofers;

(g) floor covering installers;

(h) masons;

(i) dry wall installers;

(j) carpenters;

(k) wallpaperers;

(l) painters.

SECTION 40-59-20. South Carolina Residential Builders Commission; membership, terms, vacancies, removal; oath of office.

There is hereby created the South Carolina Residential Builders Commission, hereinafter referred to as the commission. The commission must be composed of seven persons who shall have been residents of the State for at least five years and two of whom must be consumers not engaged in the business of residential building, four of whom have been actively engaged in residential building for a period of at least five years prior to the date of their appointment, and one of whom has been actively engaged in residential specialty contracting for a period of at least five years prior to the date of his appointment. One member must be appointed from each congressional district and one must be appointed from the State at large. Members of the commission must be appointed by the Governor with the advice and consent of the Senate for a term of four years or until their successors are appointed and qualify. Any vacancy occurring by reason of death, resignation, removal for cause, or otherwise must be filled for the remainder of the unexpired term in the same manner as provided for the original appointments. The Governor may remove any member of the commission for misconduct, incompetency, or neglect of duty.

Each member of the commission shall, before entering upon the discharge of the duties of his office, take and file with the Secretary of State, in writing, an oath to perform properly the duties of his office as a member of the commission and to uphold the Constitution of this State and the United States.

SECTION 40-59-30. Compensation of members of Commission.

The members of the Commission shall be compensated for their services at the regular per diem, mileage and subsistence rates as provided by law for members of State boards and commissions and shall be reimbursed for actual and necessary expenses incurred in connection with, and as a result of, their work on such Commission. All such compensation paid and costs and expenses incurred shall be paid only from the fees received by the Commission pursuant to the provisions of this chapter.

SECTION 40-59-40. Officers of Commission; bylaws; seal.

The commission, at its first meeting after appointment, shall organize by electing a chairman and a vice-chairman who shall serve for a term of one year and until their successors are appointed and qualify. The commission shall adopt bylaws for the purpose of governing the proceedings of the commission and shall adopt a commission seal on which shall appear the words "South Carolina Residential Builders Commission".

SECTION 40-59-50. Executive director; duties; other personnel.

The Director of the Department of Labor, Licensing, and Regulation, pursuant to section 40-73-15, may employ an executive director to serve at the discretion of the Director of the Department of Labor, Licensing, and Regulation. The duties of the executive director must be prescribed by the Director of the Department of Labor, Licensing, and Regulation and shall include, but not be limited to, the following:

(a) keep a record of the proceedings of the commission;

(b) receive and account for all monies received by the commission;

(c) keep a register of all applicants for licenses showing for each the date of application, name, qualifications, place of business, place of residence, and whether the license was granted or refused; and

(d) keep a register of all residential specialty contractors doing business in this State showing for each the date of registration, name, place of business, place of residence, and office telephone number. A residential specialty contractor must notify the commission in writing within thirty days of any change in the information required to be on file with the commission.

The executive director shall execute a bond, payable to the commission, for the proper performance of his duties in that sum as the director may require.

The director may also employ clerical and stenographic assistance and other personnel as may be necessary to effectuate the provisions of this chapter. The compensation of all employees of the commission must be fixed by the Director of the Department of Labor, Licensing, and Regulation and paid from the fees received by the commission pursuant to the provisions of this chapter.

SECTION 40-59-60. Meetings of Commission; quorum; records.

The commission shall meet quarterly and at such other times as the chairman may designate; provided, however, that the commission shall meet within thirty days after appointment for the purpose of organizing and transacting such business as may properly come before it. Four members of the commission shall constitute a quorum at all meetings. The executive director shall keep such records of each meeting as shall be required by the commission.

SECTION 40-59-70. Licensing of residential builders; fees; renewal.

(A) All residential builders are required to be licensed by the commission annually under the provisions of this chapter.

(B) The commission shall issue a license upon the applicant's payment of the examination fee and annual license fee, if the commission, as a result of examining the applicant, has determined that he is qualified to engage in residential building and has obtained an executed bond with a surety approved by the commission in the sum of fifteen thousand dollars, or proof of financial responsibility acceptable to the commission.

(C) Unless otherwise provided under the provisions of this chapter, the commission shall renew all licenses upon the applicant's submission to the commission of the renewal application, proof of financial responsibility or bond, and payment of the annual license fee. The annual license fees for residential builders must be set by the commission based on its cost of operation. The annual fees may be increased or decreased by the commission but in no event may the commission set the annual fees at an amount which would not provide sufficient revenues to pay all the salaries, costs, and expenses incurred by the commission in enforcing the provisions of this chapter.

(D) All fees must be set by regulation of the commission. Until regulations are promulgated by the commission and approved by the General Assembly, the following fee schedule is in effect:

(1) Residential Builders:

(a) an application/examination fee of one hundred dollars;

(b) a special examination fee of two hundred dollars;

(c) a license fee of one hundred dollars;

(d) an annual renewal fee of one hundred dollars;

(e) a late fee of fifty dollars for renewals received after July thirty-first;

(f) an additional renewal fee of one hundred dollars will be required when a renewal is received more than twelve months after expiration of the license;

(g) an oral examination fee of two hundred dollars.

(2) Residential Specialty Contractors:

(a) a registration fee of twenty dollars;

(b) an annual renewal fee of twenty dollars;

(c) a late fee of ten dollars for renewals received after July thirty-first;

(d) an additional renewal fee of twenty dollars will be required when a renewal is received more than twelve months after expiration of the registration.

(3) Other Fees and Penalties:

(a) a replacement fee of ten dollars for replacing any lost, destroyed, or mutilated licenses or registration cards;

(b) a fee of five dollars for furnishing an examinee with a certified copy of the record of his examination grades;

(c) a fee of twenty dollars for a duplicate copy of a license when any change is requested by the licensee to the information printed on the license;

(d) a fee of ten dollars for a duplicate copy of a registration card when any change is requested by the holder to the information printed on the card.

(E) The annual license fees are for the period of twelve months beginning July first of each year. All license fees collected by the commission must be paid into the State Treasury as provided by law for payment into the State Treasury of other taxes.

SECTION 40-59-75. Registration of residential specialty contractors; fees; surety bonds for work exceeding certain dollar amount.

(A) Any person who engages in residential specialty contracting within the meaning of this chapter must register with the commission and pay an annual registration fee. It is unlawful for any person to engage in residential specialty contracting without being registered with the commission.

(B) When the cost of an undertaking performed by a residential specialty contractor for an individual property owner exceeds five thousand dollars, the residential specialty contractor must obtain an executed bond with a surety in an amount approved by the commission.

(C) All assessments and registration fees must be set by regulation of the commission.

SECTION 40-59-77. Classification of residential specialty contractors; county and municipal requirements.

(A) The commission shall, by regulation, classify residential specialty contractors in a manner consistent with established usage and procedure in the construction business, and may limit the field and scope of the operations of a residential specialty contractor to those in which he is to be registered. All residential specialty contractor registrations issued by the commission must be for one or more of the classifications adopted pursuant to this chapter.

(B) Residential specialty contractors must be qualified and experienced in the particular branches or fields of the contracting vocation in which they intend to, and do, engage.

Residential specialty contractors are not exempt from complying with county and municipal business license ordinances or other regulatory ordinances. Any county or municipality may require a residential specialty contractor to be examined and licensed in accordance with standards adopted by the county or municipality. However, a county or municipality may not adopt requirements that would require that a residential specialty contractor abide by commercial construction licensing requirements unless he is engaged in commercial construction.

SECTION 40-59-80. Applications for and issuance of license; records.

Any residential builder who desires to be licensed under the provisions of this chapter shall make and file with the commission thirty days prior to the next meeting of the commission a written application on such form as may be prescribed by the commission. The application must be accompanied by the payment of the annual license fee required by the commission and an examination fee as set by the commission. A prerequisite for the taking of an examination for a residential builder's license is a minimum of one year of actual experience under the supervision of a licensed residential builder who is engaged in residential building construction involving the trades or crafts for which the license is desired. The commission, in examining an applicant, shall consider the following qualifications of the applicant:

(a) experience;

(b) ability;

(c) character;

(d) financial condition;

(e) equipment;

(f) ability and willingness to conserve the public health and safety; and

(g) other pertinent information the commission may require.

If, as a result of the examination, the commission finds that the applicant is qualified to engage in residential building in South Carolina, and if the applicant submits an executed bond in the form and with a surety approved by the commission, or proof of financial responsibility acceptable to the commission, the commission shall issue the license for which the applicant is qualified. Any applicant rejected by the commission must be given the opportunity to be reexamined after he has paid an additional examination fee, except that if the applicant fails the examination three times he shall wait twelve months before being examined again.

A residential builder's license may be granted without examination to those builders who are licensed in good standing in other states which are deemed by the commission to have comparable exams.

A record must be made and preserved by the commission of each examination of an applicant and the findings of the commission pertaining to the examination. A certified copy of the record shall be furnished to any applicant requesting the record upon the payment of a fee to the commission that reasonably reflects the cost of furnishing the record to the applicant.

SECTION 40-59-85. Credit reports, etc. to be part of license application for residential builders and specialty contractors.

(A) Any person making an initial application to the commission for licensure as a residential builder or registration as a residential specialty contractor shall first submit to a credit report. In addition to the information provided by the credit report, the commission may determine from the written application, the personal references provided by the applicant, written communications or complaints to the commission, and from any other reliable, documented sources whether an applicant for licensure as a residential builder or an applicant for registration as a residential specialty contractor has a reputation for the prompt payment of his labor or material bills and for the timely completion of other contracts into which the applicant may have entered.

(B) The application and renewal forms for all licenses and registrations issued by the commission shall require the applicant to list any outstanding judgments issued against him for the past five years.

(C) The term "misconduct" as used in Section 40-59-90 includes a pattern of repeated failure by a residential builder or residential specialty contractor to pay his labor or material bills.

SECTION 40-59-90. Revocation of builders' licenses and contractors' registrations; reissuance.

The commission may revoke, suspend, or restrict for a period not to exceed one year the license of a residential builder or registration of a residential specialty contractor who, in the opinion of the commission, has committed fraud or deceit in obtaining a license or in registering as required by the provisions of this chapter or has been guilty of gross negligence, incompetence, or misconduct in the practice of home building or residential specialty contracting. A person, including the commission, may prefer charges of fraud, deceit, negligence, incompetence, or misconduct against a residential builder licensed under this chapter or a residential specialty contractor registered under this chapter. The charges must be made to the commission in writing and sworn to by the person so charging and must be submitted to the director of the commission.

The charges, unless dismissed without hearing by the commission as unfounded or trivial, must be heard by the commission in an open hearing within three months after the date on which they were preferred. A copy of the charges, together with notice of the time and place of the hearing, must be served legally on the residential builder or residential specialty contractor charged at least thirty days before the fixed date for the hearing. At the hearing the residential builder or residential specialty contractor charged may appear personally or be represented by counsel and may cross-examine witnesses against him and produce evidence and witnesses in his defense. If, after the hearing, a majority of the commission votes in favor of revoking, suspending, or restricting for a period not to exceed one year, the license of the residential builder or registration of the residential specialty contractor charged on the basis of fraud or deceit in obtaining his license or in registering with the commission or gross negligence, incompetence, or misconduct in the performance of home building or residential specialty contracting, the commission shall order the license of the residential builder or the registration of the residential specialty contractor revoked, suspended, or restricted for a period not to exceed one year. After the commission revokes, suspends, or restricts for a period not to exceed one year the license of the residential builder or the registration of the residential specialty contractor, he has ten days to file with the commission written notice of his intention to appeal to an administrative law judge as provided under Article 5 of Chapter 23 of Title 1 from the order of the commission. All appeals from the order of the commission are governed by the provisions of Article 3, Chapter 23 of Title 1 (the Administrative Procedures Act).

The commission may reissue a license to a residential builder of a residential specialty contractor whose license was previously revoked if a majority of the members of the commission vote in favor of the reissuance.

SECTION 40-59-95. Director's powers relative to violations; penalties; distribution of penalty revenues.

(A) In addition to all other remedies provided by law, when it appears to the director, either upon complaint or otherwise, that any person or combination of persons has engaged, or is engaging, in any act of contracting, practice, or transaction which constitutes a violation of this chapter or any regulation or order of the commission, whether or not the person is properly licensed or registered with the commission, the director may either:

(1) serve upon the person not licensed or registered under the chapter, by certified mail or by personal service, a cease and desist order requiring the person to cease and desist immediately, upon receipt of the notice, from engaging in the act, practice, or transaction. If the person fails to comply with the order, the director may file an action with an administrative law judge as provided under Article 5 of Chapter 23 of Title 1 for enforcement of the cease and desist order or file an action pursuant to item (2) of this subsection in the court of common pleas to restrain and enjoin the person from engaging in the act, practice, or transaction and for wilful violation of the order. If the administrative law judge finds that the person wilfully failed to obey a valid cease and desist order, the court shall impose a civil penalty of not less than two hundred fifty dollars nor more than two thousand dollars for each violation. Any amount collected as a civil penalty must be remitted pursuant to subsection (B) of this section;

(2) apply through the Attorney General, the administrator of the Department of Consumer Affairs, the county attorney, or solicitor of the county in which the act, practice, or transaction is alleged to have been committed, to the court of common pleas of that county for an injunction restraining the person from engaging in the act, practice, or transaction or doing any act in furtherance of the act, practice, or transaction. Upon a proper showing, a temporary restraining order, a preliminary injunction, or a permanent injunction may be granted without bond. Process in the action may be served upon the defendant in any county of this State where he transacts business or is found.

(B) In actions brought under item (2) of subsection (A), each violation of this chapter or regulation or order of the director constitutes a separate offense and the court may impose a civil penalty not to exceed two thousand dollars for each violation which is in addition to all other penalties provided by law. Fifty percent of the penalty must be remitted to the general fund of the county where the case was tried and fifty percent must be deposited in the state general fund if the violation is prosecuted by the county attorney or solicitor. Seventy-five percent of the penalty must be deposited in the state general fund if the violation is prosecuted by the Attorney General or the administrator of the Department of Consumer Affairs, and twenty-five percent must be remitted to the prosecuting agency for expenses in trying the case.

SECTION 40-59-100. Roster of residential builders and specialty contractors.

A complete roster that shows all the names and places of business of the residential builders and residential specialty contractors licensed or registered by the commission during the preceding year must be prepared annually by the commission and forwarded to and filed with the clerks of court for the several counties.

SECTION 40-59-110. Annual report of Commission.

The commission shall annually submit to the Governor and the General Assembly a report of its transactions for the preceding year, including a complete statement of the receipts and expenditures of the commission, a roster of all the residential builders licensed for that year, all the residential specialty contractors registered for that year, and a list of the residential builders and residential specialty contractors whose license was revoked, suspended, or restricted by the commission during the preceding year. The commission shall also annually file with the Secretary of State a certified copy of the report at the same time the report is submitted to the Governor and the General Assembly.

SECTION 40-59-120. Promulgation of rules and regulations.

The commission may promulgate reasonable regulations as may be necessary to effectuate the provisions of this chapter.

SECTION 40-59-130. Penalties; injunctions.

Any residential builder or residential specialty contractor who undertakes or attempts to undertake the business of residential building or residential specialty contracting without first having procured a valid license or registered with the commission as required in Section 40-59-50 which has neither expired nor been revoked, or who knowingly presents to, or files with, the commission false information for the purpose of obtaining a license or becoming registered is guilty of a misdemeanor and, upon conviction, must be fined not less than one hundred dollars or imprisoned for not less than thirty days.

A residential builder who does not have a license or residential specialty contractor who is not registered as required may not bring any action either at law or in equity to enforce the provisions of any contract for residential building or residential specialty contracting which he entered into in violation of this chapter.

Whenever it appears to the commission that any residential builder or residential specialty contractor has violated, or is about to violate, the provisions of this chapter, the commission may in its own name petition an administrative law judge as provided under Article 5 of Chapter 23 of Title 1 to issue a temporary restraining order enjoining the violation of this chapter, pending a full hearing to determine whether or not the injunction must be made permanent.

SECTION 40-59-140. General and mechanical contractors exempt from provisions of this chapter; residential builders exempt from contractor licensing provisions.

The provisions of this chapter do not apply to any person licensed as a general contractor under the provisions of Chapter 11 of Title 40 for the purpose of undertaking the construction, or superintending of construction, of any building, or the improvement, reimprovement, or repair of any building. No residential builder who is licensed pursuant to the provisions of this chapter is also required to be licensed as a general contractor or mechanical contractor under the provisions of Chapter 11 of Title 40 in order to engage in residential building as defined in Section 40-59-10. A mechanical contractor is exempt from the provisions of this chapter relating to residential specialty contractors when engaged in contracting in the classification in which he is licensed to perform mechanical contracting. The Residential Builders Commission is the sole licensing and registration board for persons who engage solely in residential building as defined in Section 40-59-10 and in residential specialty contracting as defined in Section 40-59-15.

SECTION 40-59-150. Exemption of agricultural and community-constructed buildings.

The provisions of this chapter shall not apply to agricultural buildings or buildings used for agricultural purposes or buildings constructed as a community effort.

SECTION 40-59-160. Duty of building official.

It is the duty of the building official, or other authority charged with the duty of issuing building or similar permits, of any incorporated municipality or subdivision of the municipality or county to refuse to issue a permit for any undertaking which would classify the applicant as a residential builder or residential specialty contractor under the provisions of this chapter unless the applicant has furnished evidence that he is either licensed or registered as required by this chapter or exempt from the requirements of this chapter. It is also the duty of the building official, or other authority charged with the duty of issuing building or similar permits, to report to the state licensing board the name and address of any person who, in his opinion, has violated this chapter by accepting or contracting to accomplish work which would classify the person as a residential builder or residential specialty contractor under the provisions of this chapter.

ARTICLE 3.

LICENSING OF HOME INSPECTORS

SECTION 40-59-200. Definitions.

When used in this article:

(1) "Administrator" means the executive director for the South Carolina Residential Builders Commission provided for under Section 40-59-50.

(2) "Commission" means the South Carolina Residential Builders Commission.

(3) "Director" means the Director of the Department of Labor, Licensing, and Regulation.

(4) "Home Inspection" means the rendering of a written or oral report in exchange for compensation of any sort, regarding the condition of the construction or improvements to a residence, including, but not limited to, structural problems or conditions, damage, safety problems or deterioration, equipment, and systems that are visible and readily accessible. Home inspection does not include a contract or proposal for repair, renovation, or remodeling of the improvements to a residence. The parties to a home inspection may limit or expand the scope of the inspection by agreement.

(5) "Home inspector" means a natural person who, for compensation of any sort, engages in the business of home inspection.

(6) "Residence" means a structure, including, but not limited to, condominiums and town houses, intended to be used or in fact used primarily for living quarters which is not over three floors in height and which does not have more than sixteen units.

SECTION 40-59-210. Authority and duties of administrator.

The administrator is authorized to administer the provisions of this article. The administrator shall keep a register of all applicants for a license, including the date of application, the name, qualifications, place of business, and place of residence of the applicant, and the status of the license application. The administrator also shall maintain a roster listing the name, place of business, residence, and business telephone number of each licensed home inspector. A copy of the roster must be available to anyone upon a written request to the commission. The commission may charge a reasonable fee for complying with a request for a roster. The amount of the fee must be established by regulation of the commission.

SECTION 40-59-220. Licensing requirement for individual home inspectors.

(A) No person may engage in or transact any home inspection business, or hold himself out to the public as a home inspector, or offer to engage in or transact any home inspection business in this State unless the person is licensed by the commission.

(B) A person already engaged in the business of performing home inspections on the date this article becomes effective is allowed ninety days from such effective date to comply with the provisions of this article for the purpose of qualifying to perform home inspections.

(C) No license shall be issued under the provisions of this article to a partnership, association, corporation, firm, or group. However, nothing in this article precludes a licensed home inspector from performing home inspections for or on behalf of a partnership, association, corporation, firm, or group or from entering into contracts or enforcing contracts as a partnership, association, corporation, firm, or group.

SECTION 40-59-230. Exceptions to licensing requirement.

The provisions of this article do not apply to:

(A) a person employed by the State of South Carolina or any political subdivision of the State as a code enforcement official when acting within the scope of that employment;

(B) a person inspecting a home exclusively for the use of a bank, savings and loan association, or credit union, unless otherwise required by federal law or regulation;

(C) a person duly licensed, registered, or certified pursuant to Chapter 3 of this title or a person duly licensed as a general contractor pursuant to Chapter 11 of this title or a person duly licensed pursuant to Article 1 of Chapter 59 of this title or a person duly licensed or registered as a professional engineer pursuant to Chapter 22 of this title. Notwithstanding the exemption from licensure under this article, the provisions of this article relating to the conduct of the person in the performance of a home inspection shall apply to such person. Any violation of this article is considered a violation against the person's license and subjects the person to disciplinary action by the licensing board under which the person is duly licensed.

SECTION 40-59-240. Application requirements; fee; examination; issuance of license; regulations.

(A) A person desiring to be licensed as a home inspector shall make a written application to the commission on forms as the commission prescribes. Upon the submission of a completed application form and the payment of the fee required by the commission, the applicant is entitled to take the home inspector licensing examination as prescribed by the commission. Upon successful completion of the examination, the commission shall issue the applicant a license authorizing the applicant to engage in the business of home inspection in this State. The issuance of a license is evidence that the person named therein is entitled to all the rights and privileges of a licensed home inspector while the license remains active.

(B) The commission shall promulgate regulations to establish the minimum qualifications and uniform criteria for the granting of a home inspector license.

SECTION 40-59-250. Display of license; change of address; renewal; inactive status.

(A) The licensee shall display the license in the manner prescribed by the commission.

(B) The licensee shall inform the commission of any change in his business or home address.

(C) The license must be renewed before July first of each year for a period of one year upon payment of the renewal fee and upon compliance with the provisions of this article. If the home inspector has not complied with any provisions of this article during the year, the licensee shall make a new application as in the case of the issuance of an original license.

(D) The commission may provide for the late renewal of a license upon payment of a late fee in an amount established by regulation of the commission.

(E) A licensee who does not intend to engage in the business of home inspection for at least one year may request upon written notice to the commission that his license be placed in inactive status. While in inactive status, the person is not subject to payment of any renewal fees and shall not perform home inspections in this State. When the person desires to resume the performance of home inspections, he shall file an application for license renewal, pay the renewal fee, and demonstrate continuing competence as defined by regulation of the commission. If a license has been in inactive status for more than three years, the person is required to make a new application as in the case of the issuance of an original license and is required to take and successfully complete the examination.

SECTION 40-59-255. Requirements for home inspection reports.

(A) An inspection report issued by a licensed home inspector under this chapter must be on a form approved by the commission. For purposes of this section, a form that contains the same information as the commission-approved form is considered to have met the requirements of this section.

(B) Nothing in this section may require a home inspector to inspect every item contained in the commission-approved form, nor may it limit a home inspector from performing a home inspection whose scope goes beyond the information contained in the commission-approved form. A home inspector shall indicate on the inspection report which items, if any, were not inspected.

(C) A home inspector shall disclose the scope and limitations, if any, of each inspection before performing a home inspection.

SECTION 40-59-257. Requirements for advertisements by home inspectors.

"Advertisement" means any form of public notice, however disseminated. An advertisement by a licensed home inspector shall include the name, business name, address, and license number of the licensee. The use of any false, misleading, unfair, or deceptive practice in any advertisement is grounds for disciplinary action as provided for under this chapter.

SECTION 40-59-260. Nonrenewal, suspension, or revocation of license; grounds; violations; penalties; review by administrative law judge; reinstatement of revoked license.

(A) The commission may deny, refuse to renew, or temporarily suspend or revoke a license, or issue a civil penalty under this section, if the licensee or applicant for licensure engages in any of the following conduct:

(1) making a false or misleading statement in that portion of a written report that deals with professional qualification or in any testimony concerning professional qualifications;

(2) any act or omission involving dishonesty, fraud, or misrepresentation with the intent to substantially benefit a home inspector or other person or with the intent to substantially injure another person;

(3) any act of fraud, misrepresentation, or deceit in the making of a home inspection;

(4) payment of a finder's fee or a referral fee to any person in connection with an inspection of a residence;

(5) failure or refusal without good cause to exercise reasonable diligence in developing a home inspection report, preparing a report, or communicating a report;

(6) accepting a home inspection assignment when the employment itself is contingent upon the home inspector reporting a predetermined estimate, analysis, or opinion or when the fee to be paid is contingent upon the opinion, the conclusions, analysis, or report reached or upon the consequences resulting from such assignment;

(7) the performing of any work or improvement to a residence upon which the home inspector performed a home inspection within the previous twelve months;

(8) employment of fraud, deceit, or misrepresentation in obtaining or attempting to obtain a license, or renewal of it;

(9) committing an act or acts of malpractice, gross negligence, or incompetence in the performance of home inspections;

(10) practicing as a licensed home inspector without a current license;

(11) engaging in conduct that could result in harm or injury to the public;

(12) engaging in any act or practice violative of any of the provisions of this article or any regulation promulgated by the commission under this article, or aiding, abetting, or assisting a person in such violation.

(B) The commission may impose a civil penalty for violations of any provision of this article, or the regulations promulgated by the board, as follows: for a first violation, a penalty in an amount not to exceed one hundred dollars; for a second violation, a penalty in an amount not to exceed two hundred dollars; and for a third and any subsequent violation, a penalty in an amount not to exceed one thousand dollars. Any civil penalties collected by the commission must be remitted to the State Treasurer for deposit by him in the State's general fund.

(C) The denial, refusal to renew, or temporary suspension or revocation of a license, or the issuance of a civil penalty under this section, may be ordered by a decision of a majority of the commission after a hearing held in accordance with Article 3, Chapter 23, of Title 1, the Administrative Procedures Act. A decision of the commission to deny, refuse to renew, temporarily suspend a license, revoke a license, or impose a civil penalty is subject to review by an administrative law judge as provided under Article 5, Chapter 23, of Title 1.

(D) An application may be made to the commission for reinstatement of a revoked license if the revocation has been in effect for at least one year. The license may be granted upon an affirmative vote by a majority of the commission.

SECTION 40-59-265. Home inspectors prohibited from engaging in certain real estate activities; exceptions.

A home inspector is prohibited from engaging in real estate appraisal activity unless the inspector meets the requirements of Chapter 60 of this title. Further, a home inspector is prohibited from engaging in any real estate activity regulated under Chapter 57 of this title unless the inspector meets the requirements of that chapter.

SECTION 40-59-270. Enforcement of provisions of this article; home inspection without license is a misdemeanor; penalties; unlicensed inspector prohibited from enforcing contract; enjoining expected violation.

The administrator is authorized to use the powers granted to him pursuant to this chapter to enforce the provisions of this article. A home inspector who is not otherwise exempt from this article who undertakes or attempts to undertake the business of home inspection without first obtaining a valid license or who knowingly presents to, or files with, the commission false information for the purpose of obtaining a license is guilty of a misdemeanor and for the first offense, upon conviction, must be fined not more than one hundred dollars or imprisoned for not more than thirty days, or both. For a second offense, the person, upon conviction, must be fined not more than two hundred dollars or imprisoned for not more than ninety days, or both. For a third and subsequent offense, upon conviction, the person must be fined not more than one thousand dollars or imprisoned not more than one hundred eighty days, or both.

A home inspector who does not have a license as required by this article may not bring any action either at law or in equity to enforce the provisions of any contract for home inspection which he entered into in violation of this article.

Whenever it appears to the commission that any home inspector has violated, or is about to violate, the provisions of this article, the commission may in its own name petition an administrative law judge as provided under Article 5 of Chapter 23 of Title 1 to issue a temporary restraining order enjoining the violation of this article, pending a full hearing to determine whether or not the injunction must be made permanent.

SECTION 40-59-280. Promulgation of regulations and establishment of fees.

The commission is authorized to promulgate regulations to administer the provisions of this article and to establish fees reasonably necessary to cover the costs of administering this article.

SECTION 40-59-290. Determination of applicable building code provisions for alleged code violations.

When an inspection report includes a deficiency that is alleged to be a building codes violation, the inspector is responsible for determining the construction dates and building codes in effect at the time of construction and must conduct the inspection using the building codes in effect at the time of construction.

ARTICLE 4.

CERTIFICATES OF AUTHORIZATION

SECTION 40-59-400. Definitions.

For purposes of this article:

(1) "Branch office" means a place of business separate from the principal place of business where building services are offered or provided. A specific project or construction site office is not a branch office.

(2) "Commission" means the South Carolina Residential Builders Commission established in Article 1.

(3) "Firm" means a business entity functioning as a sole proprietorship, partnership, limited liability partnership, professional association, professional corporation, business corporation, limited liability company, joint venture, or other legally constituted organization which offers or provides building services through licensed residential builders, residential specialty contractors, or home inspectors.

(4) "Private practice firm" means a firm through which the practice of residential building, residential specialty contracting, or home inspecting requires a residential business certificate of authorization as described in this chapter.

(5) "Resident licensee" means a licensed practitioner who spends a majority of each normal workday working out of a principal or branch office and who is in responsible charge of the office and the building services provided from that office including, but not limited to, responsibility for applying for permits for the firm.

(6) "Responsible charge" means the direction of building services by a residential builder, residential specialty contractor, or home inspector to the extent that successful completion of the building services is dependent on the personal supervision, direct control, and final decisions by the qualified registrant to the extent that the qualified registrant assumes professional responsibility for the building services.

SECTION 40-59-410. Residential business certificate of authorization as requirement for firm to engage in residential home building, residential specialty contracting, and home inspecting.

(A) The practice or offer to practice residential building, residential specialty contracting, or home inspecting through a firm is authorized only through entities holding a residential business certificate of authorization issued by the commission. For the purposes of this section, a residential business certificate of authorization is also required for any firm practicing in this State under a fictitious name. However, when an individual is practicing residential home building, residential specialty contracting, or home inspecting in his name as individually licensed, or if an individual has at least fifty-one percent of the ownership interest and is the sole resident licensee for the firm, that person or entity is not required to be issued a residential business certificate of authorization.

(B) The practice or offer to practice residential home building, residential specialty contracting, or home inspecting as defined in this chapter by an individual residential home builder, residential specialty contractor, or home inspector licensed or registered under this chapter through a firm offering residential building, residential specialty contracting, or home inspecting services to the public is authorized if:

(1) one or more of the corporate officers in the case of a corporation, or one or more of the principal owners in the case of a firm, or one or more employees are designated as the resident licensee in responsible charge of each principal or branch office for the building services regulated by the commission and are licensed under the provisions of this chapter;

(2) the firm has obtained an executed surety bond approved by the commission in the sum of fifteen thousand dollars initially and as subsequently provided by regulation; and

(3) the firm has been issued a residential business certificate of authorization by the commission. Nothing in this section may be construed to mean that a license or registration to practice residential home building, residential specialty contracting, or home inspecting may be held by a firm.

(C) Approval of firms seeking to incorporate or register to do business in this State under this section must be conditioned upon proper filing with the Secretary of State of the articles of incorporation and revisions to the articles, as certified by the Secretary of State. This section may not be construed to require an additional filing with the Secretary of State not otherwise required by law.

(D) A firm desiring a residential business certificate of authorization shall file with the department an application on forms provided by the department accompanied by all applicable fees. Each residential business certificate of authorization must be renewed by July first of the licensing period. A renewal form provided by the department must be completed and submitted with all applicable fees. The initial application fee and annual renewal fee are one hundred dollars and as subsequently provided by regulation. Information to be provided on the application and renewal forms shall include the names and addresses of all officers and directors of the firm or officers and partners of the partnership who are licensed or registered to practice residential home building, residential specialty contracting, or home inspecting in this State, including those in responsible charge of all principal and branch offices providing building services in the State.

(E) Disciplinary action against a firm must be administered in the same manner and on the same grounds as disciplinary action against an individual under this chapter and Section 40-1-110. No firm is relieved of responsibility for conduct or acts of its agents, officers, or employees by reason of its compliance with this section, and no individual practicing residential home building, residential specialty contracting, or home inspecting is relieved of responsibility for professional services performed by reason of his employment or relationship with the firm.

(F) Nothing in this section may be construed to prohibit firms from joining together to offer residential home building, residential specialty contracting, or home inspecting services to the public, if each separate entity providing the services in this State otherwise meets the requirements of this section. For firms practicing as a professional corporation under the laws of this State, the joint practice of residential home building, residential specialty contracting, or home inspecting with other professions is approved by the commission.

(G) If the requirements of this section are met, the commission shall issue a residential business certificate of authorization to the firm, and the firm may engage or offer to engage in the business of residential home building, residential specialty contracting, or home inspecting. The commission, however, may refuse to issue a certificate or may suspend or revoke an existing certificate for due cause. A person or organization aggrieved by an adverse determination of the commission may seek judicial review in accordance with this chapter.

(H) Residential home builders, residential specialty contractors, or home inspectors engaged in practice through firms involving the practice of residential building, residential specialty contracting, or home inspecting may maintain branch offices as well as a principal place of business.

Each principal place of business as well as each branch office must have a resident residential builder, residential specialty contractor, or home inspector in responsible charge of the field and office building work or services provided. A residential home builder must supervise the residential home building aspects of the principal or branch office and may also supervise the residential specialty contracting from that location. A residential specialty contractor may supervise residential specialty contracting services of the principal or branch office as long as the services are within the scope of residential specialty contracting in the classifications for which the individual is authorized to engage. A home inspector may supervise home inspecting services of the principal or branch office as long as the services are within the scope of home inspecting for which the individual is authorized to engage. The resident residential home builder, residential specialty contractor, or home inspector is considered in responsible charge of only one place of business at a given time.

For purposes of this subsection,"engaged in practice" means holding oneself out generally to the public as qualified and available to perform residential building, residential specialty contracting, or home inspecting services.

(I) Nothing contained in this chapter prevents an authorized residential builder or residential specialty contractor from undertaking a residential building project anywhere in the State.





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