H*3742 Session 110 (1993-1994)
H*3742(Rat #0572, Act #0463) General Bill, By M. McLeod, J.J. Bailey,
J.M. Baxley, J. Brown, A.W. Byrd, Cato, Cooper, Davenport, D.N. Holt,
Littlejohn, Moody-Lawrence, I.K. Rudnick, Scott, J.S. Shissias, Simrill, Stille,
Vaughn and Wilder
A Bill to amend the Code of Laws of South Carolina, 1976, by adding Section
40-59-85 so as to provide that a person making an initial application to the
Residential Builders Commission for licensure as a residential builder or
registration as a residential specialty contractor shall first submit to a
credit report, provide for related matters, provide that 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, and provide that "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 on material bills; to
designate Sections 40-59-10 through 40-59-160 as Article 1 of Chapter 59,
Title 40 and entitled "Residential Home Builders Generally"; to amend the 1976
Code by adding Article 3 to Chapter 59, Title 40, so as to enact provisions
for the licensing of home inspectors, including provisions for, among other
things, exemptions and the imposition of civil penalties; and to amend the
1976 Code by adding Chapter 26 to Title 40 so as to enact provisions governing
commercial inspectors.-amended title
03/18/93 House Introduced and read first time HJ-16
03/18/93 House Referred to Committee on Labor, Commerce and
Industry HJ-17
04/14/93 House Committee report: Favorable with amendment Labor,
Commerce and Industry HJ-2
04/21/93 House Amended HJ-29
04/21/93 House Read second time HJ-29
04/22/93 House Debate adjourned until Tuesday April 27 HJ-19
04/27/93 House Read third time and sent to Senate HJ-19
04/28/93 Senate Introduced and read first time SJ-15
04/28/93 Senate Referred to Committee on Labor, Commerce and
Industry SJ-15
03/29/94 Senate Committee report: Favorable with amendment Labor,
Commerce and Industry SJ-17
03/30/94 Senate Amended SJ-35
03/30/94 Senate Read second time SJ-36
03/30/94 Senate Ordered to third reading with notice of
amendments SJ-36
03/31/94 Senate Read third time and returned to House with
amendments SJ-13
04/06/94 House Debate adjourned on Senate amendments until
Thursday, April 7, 1994 HJ-26
04/21/94 House Senate amendment amended HJ-65
04/21/94 House Returned to Senate with amendments HJ-74
04/28/94 Senate Non-concurrence in House amendment SJ-31
05/03/94 House House insists upon amendment and conference
committee appointed Reps. G. Bailey, Vaughn, &
McLeod HJ-3
05/04/94 Senate Conference committee appointed Sens. McConnell,
Leatherman, Ford SJ-4
05/31/94 Senate Free conference powers granted SJ-20
05/31/94 Senate Free conference committee appointed Sens.
McConnell, Ford, Leatherman SJ-20
05/31/94 Senate Free conference report received and adopted SJ-20
06/01/94 House Free conference powers rejected HJ-17
06/01/94 House Free conference powers granted HJ-279
06/01/94 House Free conference committee appointed Rep. G.
Bailey, Vaughn & McLeod HJ-280
06/01/94 House Free conference report received and adopted HJ-280
06/01/94 Senate Ordered enrolled for ratification SJ-52
06/02/94 Ratified R 572
06/29/94 Signed By Governor
06/29/94 Effective date Act No. 463
06/29/94 See act for exception to or explanation of
effective date
07/14/94 Copies available
(A463, R572, H3742)
AN ACT TO AMEND THE CODE OF LAWS OF SOUTH
CAROLINA, 1976, BY ADDING SECTION 40-59-85 SO AS TO
PROVIDE THAT A PERSON MAKING AN INITIAL APPLICATION
TO THE RESIDENTIAL BUILDERS COMMISSION FOR LICENSURE
AS A RESIDENTIAL BUILDER OR REGISTRATION AS A
RESIDENTIAL SPECIALTY CONTRACTOR SHALL FIRST SUBMIT
TO A CREDIT REPORT, PROVIDE FOR RELATED MATTERS,
PROVIDE THAT 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, AND PROVIDE THAT
"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 ON MATERIAL BILLS; TO
DESIGNATE SECTIONS 40-59-10 THROUGH 40-59-160 AS ARTICLE
1 OF CHAPTER 59, TITLE 40, AND ENTITLED "RESIDENTIAL
HOME BUILDERS GENERALLY"; TO AMEND THE 1976 CODE
BY ADDING ARTICLE 3 TO CHAPTER 59, TITLE 40 SO AS TO
ENACT PROVISIONS FOR THE LICENSING OF HOME
INSPECTORS, INCLUDING PROVISIONS FOR, AMONG OTHER
THINGS, EXEMPTIONS AND THE IMPOSITION OF CIVIL
PENALTIES; AND TO AMEND THE 1976 CODE BY ADDING
CHAPTER 26 TO TITLE 40 SO AS TO ENACT PROVISIONS
GOVERNING COMMERCIAL INSPECTORS.
Be it enacted by the General Assembly of the State of South Carolina:
Credit reports for residential builders, residential specialty contracts,
etc.
SECTION 1. The 1976 Code is amended by adding:
"Section 40-59-85. (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."
Code sections designated as article, etc.
SECTION 2. Sections 40-59-10 through 40-59-160 of the 1976 Code are
designated as Article 1 of Chapter 59, Title 40, and entitled
"Residential Home Builders Generally".
Licensing of home inspectors
SECTION 3. Chapter 59 of Title 40 of the 1976 Code is amended by
adding:
"Article 3
Licensing of Home Inspectors
Section 40-59-200. 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. 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. (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. 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. (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. (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 40-59-260. (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. 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. 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. 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. 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."
Commercial inspectors
SECTION 4. Title 40 of the 1976 Code is amended by adding:
"Chapter 26
Commercial Inspectors
Section 40-26-10. When used in this chapter:
(1) `Board' means the State Licensing Board for Contractors (excluding
mechanical contractors), the State Board of Architectural Examiners, or the
State Board of Registration for Professional Engineers (excluding land
surveyors), as is applicable to the person performing a commercial
inspection.
(2) `Commercial inspection' means the rendering of a written or oral
report, for compensation of any sort, as to the condition of the construction
or improvements to a commercial structure, including, but not limited to,
structural problems and conditions, visible damage, safety problems or
deterioration, and equipment and systems that are visible and readily
accessible. Commercial inspection does not include a contract or proposal
for design, repair, renovation, or remodeling of the improvements to a
commercial structure. The parties to an agreement for a commercial
inspection may limit or expand the scope of the inspection by
agreement.
(3) `Commercial inspector' means a natural person licensed, registered,
or certified pursuant to Chapter 3 of this title or a natural person licensed as
a general contractor pursuant to Chapter 11 of this title or a natural person
licensed or registered as a professional engineer pursuant to Chapter 22 of
this title, and who, for compensation of any sort, performs a commercial
inspection.
(4) `Commercial structure' means a building, highway, sewer,
improvement, reimprovement, or structure, or part thereof, which is not a
residence as defined in Article 3 of Chapter 59 of Title 40.
Section 40-26-20. (A) No person may engage in or transact any
commercial inspection business, or hold himself out to the public as a
commercial inspector, or offer to engage in or transact any commercial
inspection business in this State, unless the person is licensed, registered, or
certified pursuant to Chapter 3 of this title or is licensed as a general
contractor pursuant to Chapter 11 of this title or is licensed or registered as
a professional engineer pursuant to Chapter 22 of this title.
(B) A person engaged in the business of performing commercial
inspections on the date this chapter becomes effective who is not, on that
date, qualified under the terms of this chapter to perform commercial
inspections is allowed ninety days from such effective date to comply with
the provisions of this chapter for the purpose of qualifying to perform
commercial inspections.
(C) No license shall be issued under the provisions of this chapter to a
partnership, association, corporation, firm, or group. However, nothing in
this chapter precludes a person licensed pursuant to Chapter 3 of this title
or licensed as a general contractor pursuant to Chapter 11 of this title or
licensed or registered as a professional engineer pursuant to Chapter 22 of
this title from performing commercial 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 40-26-30. The provisions of this chapter 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 commercial structure exclusively for the use
of a bank, savings and loan association, or credit union, unless otherwise
required by federal law or regulation.
Section 40-26-40. A violation of this chapter is considered a violation
against the person's license, registration, or certification and subjects the
person to disciplinary action by the board under which the person is
licensed, registered, or certified.
Section 40-26-50. (A) Any person who is licensed, registered, or
certified pursuant to Chapter 3 of this title or who is licensed as a general
contractor pursuant to Chapter 11 of this title or who is licensed or
registered as a professional engineer pursuant to Chapter 22 of this title and
who performs a commercial inspection is prohibited from engaging in any
of the following conduct:
(1) making a false or misleading statement in that portion of a written
report that deals with professional qualifications or in any testimony
concerning professional qualifications;
(2) any act or omission involving dishonesty, fraud, or
misrepresentation with the intent to substantially benefit a commercial
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
commercial inspection;
(4) payment of a finder's fee or a referral fee to any person in
connection with an inspection of a commercial structure;
(5) failure or refusal without good cause to exercise reasonable
diligence in developing a commercial inspection report, preparing a report,
or communicating a report;
(6) accepting a commercial inspection assignment when the
employment itself is contingent upon the commercial 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 improvement to a commercial structure
upon which the commercial inspector performed a commercial inspection
within the previous twelve months;
(8) committing an act, or acts, of malpractice, gross negligence, or
incompetence in the performance of commercial inspections; (9) practicing as a commercial inspector without a current license,
registration, or certification issued pursuant to Chapter 3 of this title or
issued pursuant to Chapter 11 of this title for a general contractor or issued
pursuant to Chapter 22 of this title for a professional engineer;
(10) engaging in conduct that could result in harm or injury to the
public.
(B) A commercial inspector who is not duly licensed, certified, or
registered as required by this chapter may not bring any action either at law
or in equity to enforce the provisions of any contract for a commercial
inspection which he entered into in violation of this chapter.
Section 40-26-60. 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."
Time effective
SECTION 5. Section 1 of this act takes effect upon approval by the
Governor. Sections 2, 3, and 4 of this act take effect one hundred eighty
days after approval by the Governor.
Approved the 29th day of June, 1994. |