Download This Bill in Microsoft Word format
Indicates Matter Stricken
Indicates New Matter
H. 4246
STATUS INFORMATION
General Bill
Sponsors: Rep. Edge
Document Path: l:\council\bills\bbm\9819sl03.doc
Introduced in the House on May 21, 2003
Currently residing in the House Committee on Labor, Commerce and Industry
Summary: Licensing of home inspectors
HISTORY OF LEGISLATIVE ACTIONS
Date Body Action Description with journal page number
-------------------------------------------------------------------------------
5/21/2003 House Introduced and read first time HJ-6
5/21/2003 House Referred to Committee on Labor, Commerce and Industry
HJ-7
View the latest legislative information at the LPITS web site
VERSIONS OF THIS BILL
TO AMEND ARTICLE 3, CHAPTER 59, TITLE 40, AS AMENDED, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO LICENSING OF HOME INSPECTORS, SO AS TO CONFORM THE ARTICLE TO THE AMERICAN SOCIETY OF HOME INSPECTORS MODEL HOME INSPECTOR LICENSING LEGISLATION, DEFINE CERTAIN TERMS, CREATE THE HOME INSPECTOR LICENSING BOARD AND PROVIDE FOR ITS POWERS AND DUTIES, PROVIDE THE CRITERIA TO BE LICENSED AS A HOME INSPECTOR AND WHAT MUST BE INCLUDED IN A HOME INSPECTION, PROVIDE DUTIES A HOME INSPECTOR IS REQUIRED TO PERFORM AND IS NOT REQUIRED PERFORM, ALLOW FOR RECIPROCITY OF LICENSURE, ALLOW THE BOARD TO PROMULGATE REGULATIONS, PROVIDE A FEE FOR LICENSURE, PROVIDE THE PROCEDURE FOR HANDLING A COMPLAINT AGAINST A HOME INSPECTOR, PROVIDE A STATUTE OF LIMITATIONS ON AN ACTION THAT A CLIENT MAY BRING AGAINST A HOME INSPECTOR, AND PROVIDE PENALTIES.
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Article 3, Chapter 59, Title 40 of the 1976 Code, as last amended by Act 359 of 2002, is further amended to read:
Section 40-59-500. As 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, 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 an individual 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 townhouses 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 40-59-510. The administrator is authorized to administer the provisions of this article. The administrator shall keep a register of all applicants for licensure, including the date of application and 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 including 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 the commission in regulation.
Section 40-59-520. (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) No license may be issued under 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 40-59-530. This article does not apply to a person:
(1) employed by the State or any political subdivision of the State as a code enforcement official when acting within the scope of that employment;
(2) 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;
(3) licensed, registered, or certified pursuant to Chapter 3 or a person duly licensed as a general contractor pursuant to Chapter 11 or a person duly licensed pursuant to Article 1 of Chapter 59 or a person duly licensed or registered as a professional engineer pursuant to Chapter 22. Notwithstanding the exemption from licensure under this article, the provisions of this article relating to the conduct of a person in the performance of a home inspection shall apply to that person. A 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 licensed;
(4) who is duly licensed under the provisions of Section 46-13-55 for the purpose of issuing CL100 Wood Infestation Reports, provided such inspection is limited solely to the requirement of the CL100 report.
Section 40-59-540. (A) A person desiring to be licensed as a home inspector shall submit 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 licensee 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 40-59-550. (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) A 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 this article. If the home inspector has not complied with any provision of this article during the year, the licensee shall submit 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 the commission in regulation.
(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 may 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 the commission in regulation. If a license has been in inactive status for more than three years, the person shall submit a new application as in the case of the issuance of an original license and shall take and successfully complete the examination.
Section40-59-560. (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, and nothing in this section may limit a home inspector from performing a home inspection beyond the scope of 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 40-59-570. 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 40-59-580. (A) The commission may deny, refuse to renew, temporarily suspend, or revoke a license or issue a civil penalty under this section if the licensee or applicant for licensure:
(1) makes 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) engages in an 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) engages in an act of fraud, misrepresentation, or deceit in the making of a home inspection;
(4) pays a finder's fee or a referral fee to a person in connection with an inspection of a residence;
(5) fails or refuses without good cause to exercise reasonable diligence in developing a home inspection report, preparing a report, or communicating a report;
(6) accepts 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 the assignment;
(7) performs work or improvement to a residence upon which the home inspector performed a home inspection within the previous twelve months;
(8) employs fraud, deceit, or misrepresentation in obtaining or attempting to obtain a license or renewal of a license;
(9) commits an act or acts of malpractice, gross negligence, or incompetence in the performance of home inspections;
(10) practices as a licensed home inspector without a current license;
(11) engages in conduct that could result in harm or injury to the public;
(12) engages in an act or practice violative of any of the provisions of this article or a regulation promulgated by the commission under this article or aids, abets, or assists a person in such violation.
(B) The commission may impose a civil penalty for violations of any provision of this article or a regulation promulgated by the commission, as follows:
(1) for a first violation, a penalty in an amount not to exceed one hundred dollars;
(2) for a second violation, a penalty in an amount not to exceed two hundred dollars; and
(3) for a third and any subsequent violation, a penalty in an amount not to exceed one thousand dollars.
Civil penalties collected by the commission must be remitted to the State Treasurer for deposit in the state's general fund.
(C) The denial, refusal to renew, 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, or 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 individual may apply 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 40-59-590. A home inspector is prohibited from engaging in real estate appraisal activity unless the inspector meets the requirements of Chapter 60. Further, a home inspector is prohibited from engaging in any real estate activity regulated under Chapter 57 unless the inspector meets the requirements of that chapter.
Section 40-59-600. (A) The administrator is authorized to use the powers granted to him pursuant to this chapter to enforce the provisions of this article.
(B) 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 license or who knowingly presents, or files with, the commission false information for the purpose of obtaining a license is guilty of a misdemeanor and:
(1) 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;
(2) for a second offense, upon conviction, must be fined not more than two hundred dollars or imprisoned for not more than ninety days, or both.
(3) 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.
(C) A home inspector who does not have a license as required by this article may not bring an action either at law or in equity to enforce the provisions of a contract for home inspection which he entered into in violation of this article.
(D) If it appears to the commission that a home inspector has violated, or is about to violate, a provision of this article, the commission may in its own name petition an administrative law judge 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 40-59-610. The commission is authorized to promulgate regulations to administer the provisions of this article.
Section 40-59-620. 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.
Section 40-59-500. As used in this article:
(1) 'Board' means the governing body regulating home inspectors.
(2) 'Client' means a person who engages, or seeks to engage, the services of a home inspector for the purpose of obtaining inspection of, and a written report upon, the condition of a residential building.
(3) 'Compensation' means direct or indirect payment, including the expectation of payment whether or not actually received.
(4) 'Component' means a readily accessible and observable aspect of a system, such as a floor or wall, but not individual pieces such as boards or nails where many similar pieces make up a system.
(5) 'Home inspection' means visual analysis for the purpose of providing a professional opinion of the condition of a building and its carports and garages, reasonably accessible installed components, and the operation of the building 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.
(6) 'Home inspector' means a person who is certified pursuant to this article as a home inspector and who engages in the business of performing home inspections and writing home inspection reports.
(7) 'Home inspection report' means a written report prepared for compensation and issued after a home inspection. The inspector shall report:
(a) on those systems and components inspected which, in the professional opinion of the inspector, are significantly deficient or are near the end of their service lives;
(b) a reason why, if not self-evident, the system or component is significantly deficient or near the end of its service life;
(c) the inspector's recommendations to correct or monitor the reported deficiency; and
(d) the systems and components designated for inspection in this article which were present at the time of the inspection but were not inspected, and a reason they were not inspected.
(8) 'Readily accessible' means available for visual inspection without requiring moving of personal property, dismantling, destructive measures, or an action that likely will involve risk to persons or property.
(9) 'Residential building' means a structure consisting of one to four family dwelling units.
(10) 'Significantly deficient' means a system or component that is unsafe or not functioning.
(11) 'System' means a combination of interactive or interdependent components assembled to carry out one or more functions.
(12) 'Technically exhaustive' means an investigation that involves dismantling, the extensive use of advanced techniques, measurements, instruments, testing, calculations, or other means.
Section 40-59-510. There is created a Home Inspector Licensing Board. The members that are initially appointed to the board shall:
(1) have been actively engaged in the practice of home inspections for at least five years immediately preceding their appointment;
(2) have performed a minimum of five hundred home inspections for compensation; and
(3) demonstrate that they have passed a written examination administered by a national examination organization that complies with the standards established by the national commission of certifying agencies.
Section 40-59-520. The board shall have the following powers and duties:
(1) administer and enforce the provisions of this article;
(2) issue and renew licenses to home inspectors pursuant to the provisions of this article;
(3) suspend, revoke, or fail to renew the license of a home inspector;
(4) establish standards for the initial and continuing education of home inspectors;
(5) adopt and publish a code of ethics and standards of practice for licensed home inspectors;
(6) prescribe or change the fees charged for examinations, licenses, renewals, and other services; and
(7) establish rules for acquiring the training and experience requirements of home inspectors.
Section 40-59-530. (A) A person may not provide, present, call, or represent himself as able to provide a home inspection for compensation unless licensed pursuant to the provisions of this article.
(B) A business entity may not provide home inspection services unless each of the home inspectors employed by the business entity is licensed pursuant to the provisions of this article.
(C) A business entity may not use, in connection with the name or signature of the business entity, the title 'home inspectors' to describe the business entity's services, unless each of the home inspectors employed by the business entity is licensed in accordance with the provisions of this article.
Section 40-59-540. To be eligible for a license as a home inspector, an applicant shall have:
(1) good moral character;
(2) successfully completed high school or its equivalent;
(3) completed a course of study that covers 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) acquired the required training and experience requirements as established by the board; and
(5) passed the National Home Inspector Examination offered by the Examination Board of Professional Home Inspectors. The examination may have been passed before the effective date of this article.
Section 40-59-550. For the first year after enactment, to be eligible for a license as a home inspector, an applicant shall have:
(1) good moral character;
(2) successfully completed high school or its equivalent;
(3) been engaged in the practice of home inspection for compensation for not fewer than three years prior to the effective date of this article;
(4) performed not fewer than two hundred fifty home inspections for compensation; and
(5) passed the National Home Inspector Examination offered by the Examination Board of Professional Home Inspectors. The examination may have been passed before the effective date of this article.
Section 40-59-560. A licensed home inspector shall complete at least twenty hours of board-approved continuing education during each calendar year to maintain his license.
Section 40-59-570. (A) An inspector shall inspect readily accessible installed systems and components of residential buildings.
(B) Subsection (A) is not intended to limit an inspector from:
(1) including other inspection services, systems, or components in addition to those required;
(2) specifying repairs, provided the inspector is appropriately qualified and willing to do so; or
(3) excluding systems and components from the inspection if requested by the client.
(C) Inspections performed pursuant to this article:
(1) are not technically exhaustive; and
(2) will not identify concealed conditions or latent defects.
Section 40-59-580. An inspector is not required to perform an action or make a determination unless specifically stated in Section 40-59-570, except as may be required by lawful authority.
Section 40-59-590. An inspector is not required to determine:
(1) the condition of systems or components that are not readily accessible;
(2) the remaining life of a system or component;
(3) the strength, adequacy, effectiveness or efficiency of a system or component;
(4) the causes of a condition or deficiency;
(5) the methods, materials, or costs of corrections;
(6) future conditions including, but not limited to, failure of systems and components;
(7) the suitability of the property for a specialized use;
(8) compliance with codes, regulations, laws, ordinances, and other regulatory requirements;
(9) the market value of the property or its 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 environmental hazards including, but not limited to, toxins, carcinogens, noise, and contaminants in soil, water, and air;
(13) the effectiveness of a system installed or methods utilized to control or remove suspected hazardous substances;
(14) the operating costs of systems or components; and
(15) the acoustical properties of a system or component.
Section 40-59-600. An inspector is not required to offer:
(1) or perform an act or service contrary to law;
(2) or perform engineering services;
(3) or perform work in a trade or professional service other than home inspection;
(4) warranties or guarantees.
Section 40-59-610. An inspector is not required to operate:
(1) a system or component that is shut down or otherwise inoperable;
(2) a system or component that does not respond to normal operating controls;
(3) shut-off valves.
Section 40-59-620. An inspector is not required to enter:
(1) an area that will, in the opinion of the inspector, likely be dangerous to the inspector or other persons or damage the property or its systems or components;
(2) under-floor crawl spaces or attics that are not readily accessible.
Section 40-59-630. An inspector is 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 located in areas that are not entered into pursuant to this article;
(5) detached structures other than garages and carports;
(6) common elements or common areas in multi-unit housing, such as condominium properties or cooperative housing.
Section 40-59-640. An inspector is not required to:
(1) perform a procedure or an operation that, in the opinion of the inspector, likely will be dangerous to the inspector or another person or damage the property or its systems or components;
(2) move suspended ceiling tiles, personal property, furniture, equipment, plants, soil, snow, ice, or debris;
(3) dismantle a system or component, except as explicitly required by this article.
Section 40-59-650. Upon payment to the board of a fee and the submission of a written application form provided by the board, the board shall issue a home inspector license to a person who holds a valid license, certificate, or registration issued by another state or possession of the United States or the District of Columbia that has standards substantially equivalent to, or exceeding, those of this State, as determined by the board.
Section 40-59-660. (A) The board shall promulgate regulations to establish, prescribe, or change the fees for licenses, renewals of licenses, or other services provided by the board pursuant to the provisions of this article.
(B) The licensing fee must be charged to applicants and renewals in an amount not to exceed that which is sufficient to defray administrative costs to the State. The licensing fee must be comparable to that charged to other professions.
Section 40-59-670. This article does not prevent a person:
(1) employed by a governmental entity from inspecting a residential building if the inspection is within official duties and responsibilities;
(2) from performing a home inspection if the inspection will be used solely by a bank, savings and loan association, or credit union to monitor progress on the construction of a residential structure;
(3) employed as a property manager for a residential structure and whose official duties and responsibilities include inspecting the residential structure from performing an inspection on the structure if the person does not receive separate compensation for the inspection work.
Section 40-59-680. (A) The board may:
(1) make investigations or conduct hearings to determine whether a violation of this article has occurred;
(2) suspend, revoke, or refuse to grant a home inspector license upon proof to the satisfaction of the board that the holder has participated in unfair business practice.
(B) It is an unfair business practice for a home inspector, a company that employs the inspector, or a company that is controlled by a company that also has a financial interest in a company employing a home inspector, to:
(1) perform or offer to perform, for an additional fee, repairs to a structure on which the inspector, or the inspector's company, has prepared a home inspection report in the past twelve months, except that a home protection company that is affiliated with or that retains a home inspector does not violate this section if it performs repairs pursuant to a claim made under a home protection contract;
(2) inspect for a fee property in which the inspector, or the inspector's company, has a financial interest or an interest in the transfer of the property;
(3) offer or deliver compensation, inducement, or reward to the owner of the inspected property, the broker, or the agent, for the referral of business to the inspector or the inspection company;
(4) accept an engagement to make an inspection or to prepare a report in which the employment itself or the fee payable for the inspection is contingent upon the conclusions in the report, pre-established findings, or the close of escrow.
Section 40-59-690. Instead of proceeding with an investigation, the board may place in a registry a copy of a complaint received by the board against a licensed home inspector, the inspector's response to the complaint, and a copy of records of the board concerning the complaint.
(1) The board shall provide the inspector with a copy of the complaint not later than thirty days after the date on which the board receives a complaint alleging that a home inspector has engaged in conduct that is grounds for discipline;
(2) After receiving a copy of the complaint, the home inspector may place in the registry a statement describing the inspector's view of the correctness or relevance of information contained in the complaint.
(3) The board shall make the complaint and the home inspector's response to the complaint available to the public.
(4) The board shall remove all complaints against and other information concerning a home inspector from the registry if, for a period of two years from the date of the most recent complaint filed in the registry, no further complaints have been filed against the inspector.
(5) An unworthy or frivolous complaint must be discarded and must not be retained.
Section 40-59-700. (A) An action to recover damages for an act or omission of a home inspector relating to a home inspection that he conducts may be commenced only within one year after the date that a home inspection is completed.
(B) Only a client and no other party shall have a cause of action to recover damages arising from a home inspection or a home inspection report.
Section 40-59-710. (A) As a condition of removing a limitation on a license or of reinstating a license that has been suspended or revoked, the board may:
(1) require the home inspector to obtain insurance against loss, expense, and liability resulting from errors and omissions or neglect in the performance of services as a home inspector;
(2) require the home inspector to file with the board a bond that is furnished by a company authorized to do business in this State and is in the amount approved by the board.
(B) 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 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:
(1) for the first offense, upon conviction, must be fined not more than one hundred dollars or imprisoned not more than thirty days, or both;
(2) for a second offense, upon conviction, must be fined not more than two hundred dollars or imprisoned not more than ninety days, or both;
(3) for a third and subsequent offense, upon conviction, must be fined not more than one thousand dollars or imprisoned not more than one hundred eighty days, or both.
(C) A home inspector who does not have a license as required by this article may not bring an action either at law or in equity to enforce the provisions of a contract for home inspection which he entered into in violation of this article.
(D) If it appears to the board that a home inspector has violated, or is about to violate, a provision of this article, the commission may in its own name petition an administrative law judge 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 2. This act takes effect upon approval by the Governor.
This web page was last updated on Monday, December 7, 2009 at 10:35 A.M.