Session Law

1999

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Chapter 146 AN ACT PROVIDING FOR THE LICENSING OF HOME INSPECTORS.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:


SECTION 1. Chapter 13 of the General Laws is hereby amended by adding the following two sections:-

Section 96. There is hereby established within the division of registration, a board of registration of home inspectors. Said board shall consist of five members to be appointed by the governor for terms of three years. The members so appointed shall be residents of the commonwealth, three of whom shall be licensed home inspectors who have been actively engaged in the practice of home inspection in the commonwealth for at least five years immediately preceding their appointment and who shall have performed not less than 1,000 home inspections for compensation, one of whom shall be a licensed home inspector who has been actively engaged in the practice of home inspection in the commonwealth for at least five years immediately preceding his appointment and who has performed not less than 150 home inspections for compensation and one of whom shall be a consumer who shall be the owner and principal resident of a residential building. All board members shall be subject to the provisions of chapter 268A.

Of the initial members appointed to said board, two shall serve for terms of three years, two shall serve for terms of two years and one shall serve for a term of one year. Each member of said board shall hold office until his successor has been qualified. A vacancy in the membership of the board shall be filled for the unexpired term in the manner provided for the original appointment. No member shall serve more than two consecutive terms which shall not include any unexpired term to which he has been appointed. A member may be removed by the governor for cause.

Said board shall annually elect from among its members, by majority vote, a chairman and vice-chairman. Said board shall meet at least once every three months and may hold additional meetings as necessary to discharge its duties. Members shall receive no compensation but shall be entitled to reasonable travel expenses.

Section 97. Said board shall (i) establish the requirements for licensure and for the standards of professional and ethical conduct; (ii) authorize and conduct appropriate examinations to determine the qualifications of applicants; (iii) grant licenses to qualified applicants; (iv) establish standards for continuing education; and (v) set and administer penalties as defined in section 206 of chapter 112 for fraudulent, deceptive or professionally incompetent and unsafe practices and for violations of rules and regulations promulgated by said board.

Said board shall make available to the public a list of licensed home inspectors and associate home inspectors.

Said board shall publish a code of ethics.

The director of consumer affairs and business regulation, after consultation with the board of registration of home inspectors and the board of registration of real estate brokers and salespersons, shall publish an informational brochure on home inspections which shall be issued to home buyers at the signing of the first written contract to purchase. The brochure shall include a definition of a home inspection such that the nature and extent of a home inspection is made clear to a client or prospective client. The brochure shall also include information regarding inspections for lead paint, radon, and termites and other woodboring insects. The joint committee on government regulations and the house and senate committees on post audit and oversight shall receive a copy of the proposed brochure and shall be provided with an opportunity to comment on it 60 days before the brochure is submitted for publication.

Said board shall administer the provisions of sections 201 to 206, inclusive, of said chapter 112 and shall promulgate such rules and regulations as may be necessary to implement the same.

SECTION 2. Chapter 112 of the General Laws is hereby amended by inserting after section 87YY the following section:-

Section 87YY>. At the time of the signing of the first written contract to purchase, real estate brokers and salesmen, or the seller if no broker or salesperson is involved in the sale, shall distribute a brochure, published by the office of consumer affairs and business regulations, educating consumers about the home inspection process. Real estate brokers and salesmen shall not directly recommend a specific home inspection company or home inspector but may, upon request, provide a complete list of licensed home inspectors prepared by the board. This prohibition shall not apply if there is a written contractual agreement or a written agency disclosure between the buyer and the real estate broker specifying that the real estate broker is acting exclusively for the buyer as a buyer's broker.

SECTION 3. Said chapter 112 is hereby further amended by adding the following six sections:-

Section 201. As used in sections 202 to 206, inclusive, the following words shall, unless the context clearly requires otherwise, have the following meanings:-

"Associate home inspector", a person employed by a licensed home inspector to conduct home inspections of residential buildings under the supervision of a licensed home inspector who is licensed pursuant to this chapter.

"Board", the board of registration of home inspectors established pursuant to section 96 of chapter 13.

"Client", a person who engages the services of a home inspector for the purpose of obtaining inspection of and a written report on the condition of a residential building.

"Division", the division of registration.

"Home inspection", the process by which a home inspector observes and provides pursuant to the sale and transfer of a residential building, a written evaluation of the following readily accessible components of a residential building: heating, cooling, plumbing and electrical systems, structural components, foundation, roof, masonry structure, exterior and interior components and any other related residential housing components. A home inspection shall, at a minimum, conform with standards of practice promulgated by the board.

"Home inspector", a person licensed as a home inspector pursuant to this chapter.

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

Section 202. (a) No person shall present, call or represent himself as authorized to provide a home inspection for compensation unless licensed by the board in accordance with this section and sections 203 to 206, inclusive. No person shall conduct a home inspection for compensation unless licensed by the board in accordance with this section and said sections 203 to 206, inclusive, and unless he provides a written report of the home inspection. The requirements contained in this subsection shall not be construed to prevent any of the following persons from acting within the scope of their profession:

(1) a person employed as a code enforcement official by the commonwealth or a political subdivision thereof when acting within the scope of his employment;

(2) an architect licensed pursuant to sections 60A to 60 O, inclusive;

(3) a professional engineer licensed pursuant to sections 81D to 81T, inclusive;

(4) an electrician licensed pursuant to chapter 141;

(5) a plumber licensed pursuant to chapter 142;

(6) a real estate broker or salesman licensed pursuant to section 87XX;

(7) a real estate appraiser or certified general or residential real estate appraiser licensed pursuant to sections 173 to 195, inclusive, or an insurance adjuster;

(8) a person certified or registered as a pesticide applicator;

(9) a person employed as a radon, licensed lead paint, urea formaldehyde or termite inspector solely for the purpose of conducting such inspections;

(10) an individual or business hired solely for the purpose of inspecting the energy-related components of a dwelling in order to assess a home's energy performance;

(11) officers and employees of the United States or the commonwealth while engaged within the commonwealth in the practice of inspection on behalf of the United States or the commonwealth;

(12) a person making a home inspection in the presence of a licensed home inspector for the purpose of meeting the requirements of section 203 to qualify for licensure as an associate home inspector; and

(13) a person conducting an inspection of septic systems as required by 310 CMR 15 solely for the purpose of checking or being in compliance with 310 CMR 15.

(b) Each applicant for a license as a home inspector shall furnish the board with proof of satisfactory completion of the educational, training and experience requirements for licensure, including completion of an approved program of work experience and proof of having passed a licensing examination approved by the board. Applications for licenses and renewals thereof shall be submitted in accordance with procedures established by the board. Pursuant to section 3B of chapter 7 of the General Laws, the secretary of administration and finance shall ensure that a licensing fee shall be charged to all applicants in an amount sufficient to defray all administrative costs to the commonwealth associated with the licensure of home inspectors, but in no event shall the fee be less than $100.

The board shall license as a home inspector an applicant who meets the requirements set forth in this section. Said board shall issue to a home inspector and an associate home inspector a license. Each such licensed home inspector and associate home inspector shall carry the license with him at all times and make it available for presentation to a client or prospective client.

(c) A license shall be issued for a period of two years and shall be renewable on or before the last day of the month in an even-numbered year. Each licensee shall pay to the board a license fee or renewal fee, as appropriate, which shall be set by the secretary of administration and finance. The renewal month shall be determined by the division to facilitate efficient completion of all renewal requests and avoid backlog. The renewal of a home inspector license shall be contingent upon compliance with the continuing education requirements and standards of practice as determined by the board and defined by rules and regulations.

(d) To be eligible for licensure as a home inspector, an applicant shall:

(i) be of good moral character;

(ii) have successfully completed high school or its equivalent;

(iii) have been engaged as a licensed associate home inspector for not less than one year and have performed not less than 100 home inspections under the supervision of a licensed home inspector;

(iv) have passed a written or electronic competency examination offered or approved by the board; and

(v) pay the appropriate fee set by the secretary of administration and finance.

Section 203. The board shall establish the requirements for licensure as an associate home inspector and shall promulgate such rules and regulations to establish the associate training program and duties and responsibilities of the supervisor and otherwise as may be necessary pursuant to the provisions of this section. Said board shall license as an associate an applicant who has shown to the satisfaction of the board that the applicant:

(1) is of good moral character;

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

(3) has successfully completed a board-approved training program;

(4) has performed not less than 25 home inspections in the presence of a licensed home inspector;

(5) has passed a written or electronic competency examination offered or approved by the board;

(6) has an identified supervisor who is a person licensed in good standing in the commonwealth as a home inspector; and

(7) has paid the appropriate fee which shall be set by the secretary of administration and finance.

Section 204. Upon payment to the board of a fee and the submission of a written application provided by said board, the board shall issue a home inspector license to a person who holds a valid license or registration issued by another jurisdiction which has standards substantially equivalent to or exceeding the standards of the commonwealth, as determined by said board.

Section 205. The board shall establish procedures for the filing of complaints regarding home inspectors who are subject to requirements for licensure.

A licensed home inspector and associate home inspector engaged in the practice of home inspection shall secure, maintain and file with the board satisfactory proof of a certificate of an errors and omissions policy which shall be in a minimum amount of $250,000 in the aggregate. Every proof of an errors and omissions policy shall stipulate that cancellation or nonrenewal of the policy shall not be effective until at least ten days' notice of intention to cancel or not renew has been received in writing by the board. No home inspector or associate may supervise or perform a home inspection unless his performance of the inspection is covered by an errors and omissions policy of at least $250,000 in the aggregate. Such proof shall be deemed satisfactory if the policy is carried by the licensed company, partnership or franchise for which the home inspector or associate home inspector is a contracted employee and the home inspector or associate home inspector is specifically covered by such policy.

A licensed home inspector and associate home inspector shall promptly report to the insurance company any complaint filed against either the inspector or the inspector's company in a court of competent jurisdiction when the claim in the complaint is greater than the deductible on the inspector's errors and omissions insurance policy.

Any action arising from a home inspection shall be commenced only within three years after the date of a completed written report of a home inspection by a home inspector.

Said board shall investigate all complaints filed with the board relating to the proper practice of home inspection and all complaints relating to a violation of this chapter or any rule or regulation of said board.

Said board may, by a majority vote, after a hearing held subject to chapter 30A, deny, refuse renewal, limit, suspend or revoke the license of a home inspector or an associate home inspector upon proof to the satisfaction of the board that the holder thereof has:

(1) committed fraud or misrepresentation in obtaining a license;

(2) been guilty of criminal conduct which the board determines to be of such a nature as to render such a person unfit to practice as a licensed home inspector or associate home inspector, as evidenced by criminal proceedings which resulted in a conviction, guilty plea or plea of nolo contendere or an admission of sufficient facts;

(3) failed to report a claim forthwith to the insurance carrier as provided in this section;

(4) violated any rule or regulation of the board;

(5) failed to fulfill any continuing education requirements set out by the board;

(6) violated any ethical standard which the board determines to be of such a nature as to render such person unfit to practice as a home inspector or associate home inspector, such as:

(i) disclosing information concerning the results of the home inspection without the approval of a client or the client's representative;

(ii) accepting compensation from more than one interested party for the same service without the consent of all interested parties;

(iii) accepting commissions or allowances, directly or indirectly, from parties other than the client in connection with work for which the licensee is responsible to the client;

(iv) failing to promptly disclose to a client or potential client information about any business interest of the licensee which may affect the client or potential client in connection with the home inspection;

(v) attempting to limit liability for negligent or wrongful errors or omissions by use of a clause within a performance contract that limits the cost of damages for negligent or wrongful errors or omissions; or

(vi) conducting a home inspection without the appropriate errors and omissions insurance coverage;

(7) failed to provide a written report of the completed home inspection;

(8) reported on the market value of the property or its marketability; or

(9) reported on the advisability or inadvisability of the purchase of the property.

Section 206. The board may, by a majority vote and upon determination made after a hearing pursuant to chapter 30A, find that a home inspector or associate home inspector is liable for a violation of the provisions of sections 202 to 205, inclusive, and may impose the following fines and penalties:

(1) suspend, revoke, cancel or place on probation the license of the home inspector or associate;

(2) reprimand or censure the licensee;

(3) order the licensee to complete continuing education or training or both as a condition of retention or future consideration or reinstatement of such license;

(4) order the licensee to participate in a drug or alcohol rehabilitation program or undergo drug testing or both as a condition of reinstatement of such license;

(5) order the licensee to practice under appropriate supervision for a period of time to be determined by said board as a condition of retention of future consideration of reinstatement of such license;

(6) order financial restitution, where appropriate; and

(7) assess an administrative penalty of not more than $1,000 for each violation.

Whoever, not being licensed as a home inspector or an associate home inspector, holds himself out as such or whoever, being licensed, impersonates another home inspector or associate home inspector or violates any rule or regulation made by said board and performs a home inspection, may be assessed a civil penalty of not more than $5,000 for each violation. Such civil penalty may be assessed by the board after hearing and may be enforced by the courts of the commonwealth.

No action by a home inspector for recovery of a fee for the performance of a home inspection shall be maintained in the courts of the commonwealth unless the individual who performed the inspection was duly licensed at the time the fee was earned.

An appeal of a license suspension, revocation, cancellation or other discipline shall be made to the superior court based solely on the administrative record compiled at the board hearing.

SECTION 4. Prior to May 1, 2001, the board shall issue to an individual, upon application, a home inspector license, if the applicant meets the requirements of clauses (i) and (v) of subsection (d) of section 202 of chapter 112 of the General Laws and: (1) has been engaged in the practice of home inspections for compensation for not less than three years prior to the effective date of this act; and (2) has performed not less than 125 home inspections for compensation.

SECTION 5. The members of the board of registration of home inspectors established by section 96 of chapter 13 of the General Laws shall be appointed on or before September 1, 2000.

SECTION 6. Notwithstanding the provisions of section 96 of chapter 13 of the General Laws to the contrary, for a period of one year after the effective date of said section 96 the initial four home inspectors appointed to the board of registration of home inspectors shall not be required, at the time of their initial appointment, to be licensed to practice home inspection pursuant to the provisions of sections 201 to 206, inclusive, of chapter 112 of the General Laws, if they are of good moral character, have graduated from high school or its equivalent, have been engaged in the practice of home inspections for compensation for not less than five years prior to the effective date of this section and have performed not less than 1,000 home inspections for compensation.

SECTION 7. Sections 2 to 4, inclusive, shall take effect on May 1, 2001.

Approved November 24, 1999.