GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1993

S	4 

SENATE BILL 617
Insurance Committee Substitute Adopted 5/6/93
House Committee Substitute Favorable 6/28/93
House Committee Substitute #2 Favorable 6/30/94

Short Title:  Regulate Fee-Paid Home Inspectors.	(Public)
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Sponsors:
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Referred to:  
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April 20, 1993

A BILL TO BE ENTITLED
AN ACT TO REGULATE THE USE OF THE TITLE "LICENSED HOME INSPECTOR"AND TO REQUIRE PERSONS WHO PERFORM HOME INSPECTIONS FOR COMPENSATION TO BE LICENSED.
The General Assembly of North Carolina enacts:
Section 1.  Chapter 143 of the General Statutes is amended by adding a new Article to read:
"ARTICLE 9F.
"North Carolina Home Inspector Licensure Board.
"§ 143-151.43.  Short title.
This Article is the Home Inspector Licensure Act and may be cited by that name.
"§ 143-151.44.  Purpose.
This Article safeguards the public health, safety, and welfare and protects the public from being harmed by unqualified persons by regulating the use of the title 'Licensed Home Inspector' and by providing for the licensure and regulation of those who perform home inspections for compensation.
"§ 143-151.45.  Definitions.
The following definitions apply in this Article:
(1)	Associate home inspector. – An individual who is employed by a licensed home inspector to conduct a home inspection of a residential building on behalf of the licensed home inspector.
(2)	Board. – The North Carolina Home Inspector Licensure Board.
(3)	Compensation. – A fee or anything else of value.
(4)	Home inspection. – A written evaluation of one or more of the following components of a residential building: heating system, cooling system, plumbing system, electrical system, structural components, foundation,  roof, masonry structure, exterior and interior components, or any other related residential housing component.
(5)	Home inspector. – An individual who engages in the business of performing home inspections for compensation.
(6)	Residential building. – A structure intended to be, or that is in fact, used as a residence by one or more individuals.
"§ 143-151.46.  North Carolina Home Inspector Licensure Board established; members; terms; vacancies.
(a)	Membership. –  The North Carolina Home Inspector Licensure Board is established in the Department of Insurance.  The Board shall be composed of the Commissioner of Insurance or the Commissioner's designee and seven additional members appointed as follows:
(1)	A public member who is not in one of the professional categories in subdivisions (2) through (4) of this subsection, appointed by the General Assembly upon the recommendation of the Speaker of the House of Representatives.
(2)	Four home inspectors, two of whom shall be appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate, one of whom shall be appointed by the General Assembly upon the recommendation of the Speaker of the House of Representatives, and one of whom shall be appointed by the Governor.
(3)	A licensed general contractor appointed by the Governor upon the recommendation of the North Carolina Home Builders Association.
(4)	A licensed real estate broker appointed by the Governor upon the recommendation of the North Carolina Association of Realtors.
All members of the Board must be citizens of the State. Appointments by the General Assembly must be made in accordance with G.S. 120-121.
(b)	Terms. – The members shall be appointed for staggered terms and the initial appointments shall be made prior to August 1, 1995.  The appointees shall hold office until July 1 of the year in which their respective terms expire and until their successors are appointed and qualified.
Of the members initially appointed, the home inspector appointed by the Governor shall serve a one-year term.  The home inspector appointed by the General Assembly upon the recommendation of the Speaker of the House of Representatives and the licensed real estate broker shall serve two-year terms.  One home inspector appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate and the licensed contractor shall serve three-year terms.  The remaining home inspector appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate and the citizen of the State shall serve four-year terms.
Thereafter, as the term of each member expires, a successor shall be appointed for a term of four years.
(c)	Vacancies. – Vacancies in the Board occurring for any reason shall be filled for the unexpired term by the appointing official making the original appointment.  Vacancies in positions appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate or the Speaker of the House of Representatives shall be filled in accordance with G.S. 120-122.
"§ 143-151.47.  Compensation of Board members.
Members of the Board shall receive no salary for serving on the Board.  Members may be reimbursed for their travel and other expenses in accordance with G.S. 93B-5 but may not receive the per diem authorized by that statute.
"§ 143-151.48.  Election of officers; meetings of Board.
(a)	Officers. – Within 30 days after making appointments to the Board, the Governor shall call the first meeting of the Board.  The Board shall elect a chair and a vice-chair who shall hold office according to rules adopted by the Board.
(b)	Meetings. – The Board shall hold at least two regular meetings each year as provided by rules adopted by the Board.  The Board may hold additional meetings upon the call of the chair or any two Board members.  A majority of the Board membership constitutes a quorum.
"§ 143-151.49.  Powers and responsibilities of Board.
(a)	General. – The Board has the power to do all of the following:
(1)	Determine the qualifications and fitness of applicants for a new or renewed license.
(2)	Adopt and publish a code of ethics and standard of practice for persons licensed under this Article.
(3)	Issue, renew, deny, revoke, and suspend licenses under this Article.
(4)	Conduct investigations, subpoena individuals and records, and do all other things necessary and proper to discipline persons licensed under this Article and to enforce this Article.
(5)	Employ professional, clerical, investigative, or special personnel necessary to carry out the provisions of this Article.
(6)	Purchase or rent office space, equipment, and supplies necessary to carry out the provisions of this Article.
(7)	Adopt a seal by which it shall authenticate its proceedings, official records, and licenses.
(8)	Conduct administrative hearings in accordance with Article 3A of Chapter 150B of the General Statutes.
(9)	Establish fees as allowed by this Article.
(10)	Publish and make available upon request the licensure standards prescribed under this Article and all rules adopted by the Board.
(11)	Request and receive the assistance of State educational institutions or other State agencies.
(12)	Establish continuing education requirements for persons licensed under this Article.
(13)	Adopt rules necessary to implement this Article.
(b)	Exam. – In developing a licensing examination to determine the knowledge of an applicant, the Board must emphasize knowledge gained through experience.
"§ 143-151.50.  License required to perform home inspections for compensation or to claim to be a 'licensed home inspector'.
(a)	Requirement. – To perform a home inspection for compensation on or after October 1, 1996, or to claim to be a licensed home inspector or a licensed associate home inspector on or after that date, an individual must be licensed by the Board.  An individual who is not licensed by the Board may perform a home inspection without compensation.
(b)	Form of License. – The Board may issue a license only to an individual and may not issue a license to a partnership, an association, a corporation, a firm, or another group.  A licensed home inspector or licensed associate home inspector, however, may perform home inspections for or on behalf of a partnership, an association, a corporation, a firm, or another group, may conduct business as one of these entities, and may enter into and enforce contracts as one of these entities.
"§ 143-151.51.  Requirements to be licensed as a home inspector.
To be licensed as a home inspector, an applicant must do all of the following:
(1)	Submit a completed application to the Board upon a form provided by the Board.
(2)	Pass a licensing examination prescribed by the Board.
(3)	Have minimum net assets or a bond in an amount determined by the Board. The amount may not be less than five thousand dollars ($5,000) nor more than ten thousand dollars ($10,000).
(4)	Pay the applicable fees.
(5)	Meet one of the following three conditions:
a.	Have a high school diploma or its equivalent, have been engaged as a licensed associate home inspector for at least one year, and have completed 100 home inspections for compensation.
b.	Have education and experience the Board considers to be equivalent to that required by subpart a. of this subdivision.
c.	Be licensed as a general contractor under Article 1 of Chapter 87 of the General Statutes, as an architect under Chapter 83A of the General Statutes, or as a professional engineer under Chapter 89C of the General Statutes.
"§ 143-151.52.  Requirements to be licensed as an associate home inspector.
To be licensed as an associate home inspector, a person must do all of the following:
(1)	Submit a completed application to the Board upon a form provided by the Board.
(2)	Pass a licensing examination prescribed by the Board.
(3)	Pay the applicable fees.
(4)	Have a high school diploma or its equivalent.
(5)	Be affiliated or intend to be affiliated with a licensed home inspector and submit a sworn statement by the licensed home inspector with whom the applicant is or intends to be affiliated certifying that the licensed home inspector will actively supervise and train the applicant.
"§ 143-151.53.  Notification of applicant following evaluation of application.
The Board must review each application for a license submitted to it and must notify each applicant that the application is either accepted or rejected.  The Board must send the notification of acceptance or rejection within 30 days of receiving the application.  If the Board rejects an application, the notice sent to the applicant must state the reasons for the rejection.
"§ 143-151.54.  Miscellaneous license provisions.
A license issued by the Board is the property of the Board.  If the Board suspends or revokes a license issued by it, the individual to whom it is issued must give it to the Board upon demand.  An individual who is licensed by the Board must display the license certificate in the manner prescribed by the Board.  A license holder whose address changes must report the change to the Board.
"§ 143-151.55.  Renewal of license; inactive licenses.
(a)	Renewal. – A license expires on September 30 of each year.  A license may be renewed by filing an application for renewal with the Board and paying the required renewal fee.  The Board must notify license holders at least 30 days before their licenses expire. The Board must renew the license of a person who files an application for renewal, pays the required renewal fee, has fulfilled the continuing education requirements set by the Board, and is not in violation of this Article when the application is filed.  If the Board imposes a continuing education requirement as a condition of renewing a license, the Board must ensure that the courses needed to fulfill the requirement are available in all geographic areas of the State.
(b)	Late Renewal. – The Board may provide for the late renewal of a license upon the payment of a late fee, but no late renewal of a license may be granted more than five years after the license expires.
(c)	Inactive License. –  A license holder may apply to the Board to be placed on inactive status.  An applicant for inactive status must follow the procedure set by the Board.  A license holder who is granted inactive status is not subject to the license renewal requirements during the period the license holder remains on inactive status.
A license holder whose application is granted and is placed on inactive status may apply to the Board to be reinstated to active status at any time.  The Board may set conditions for reinstatement to active status.  An individual who is on inactive status and applies to be reinstated to active status must comply with the conditions set by the Board.
"§ 143-151.56.  Suspension, revocation, and refusal to renew license.
(a)	The Board may deny or refuse to issue or renew a license, may suspend or revoke a license, or may impose probationary conditions on a license if the license holder or applicant for licensure has engaged in any of the following conduct:
(1)	Employed fraud, deceit, or misrepresentation in obtaining or attempting to obtain or renew a license.
(2)	Committed an act of malpractice, gross negligence, or incompetence in the practice of home inspections.
(3)	Without having a current license, either performed home inspections for compensation or claimed to be licensed.
(4)	Engaged in conduct that could result in harm or injury to the public.
(5)	Been convicted of or pled guilty or nolo contendere to any crime involving moral turpitude.
(6)	Been adjudicated insane or incompetent and has not presented proof of recovery from the condition.
(7)	Engaged in any act or practice that violates any of the provisions of this Article or any rule issued by the Board, or aided, abetted, or assisted any person in a violation.
(b)	A denial of licensure, refusal to renew, suspension, revocation, or imposition of probationary conditions upon a license holder may be ordered by the Board after a hearing held in accordance with Chapter 150B of the General Statutes and rules adopted by the Board.  An application may be made to the Board for reinstatement of a revoked license if the revocation has been in effect for at least one year.
"§ 143-151.57.  Fees.
(a)	Maximum Fees. – The Board may adopt fees that do not exceed the amounts set in the following table for administering this Article:
Item	Maximum Fee
Application for home inspector license	$25.00
Application for associate home inspector license	 15.00
Home inspector examination	 75.00
Issuance of home inspector license	150.00
Issuance of associate home inspector license	100.00
Late renewal of home inspector license	 25.00
Late renewal of associate home inspector license
inspector 	 15.00
Copies of Board rules or licensure standards	Cost of printing and mailing.
(b)	Subsequent Application. – An individual who applied for a license as a home inspector and who failed the home inspector examination is not required to pay an additional application fee if the individual submits another application for a license as a home inspector.  The individual must pay the examination fee, however, to be eligible to take the examination again.
"§ 143-151.58.  Duties of licensed home inspector or licensed associate home inspector.
A licensed home inspector or licensed associate home inspector must give to each person for whom the inspector performs a home inspection for compensation a written report of the home inspection.  The inspector must give the person the report by the date set in a written agreement by the parties to the home inspection.  If the parties to the home inspection did not agree on a date in a written agreement, the inspector must give the person the report within three business days after the inspection was performed.
"§ 143-151.59.  Violation is a misdemeanor.
A person who violates a provision of this Article is guilty of a Class 2 misdemeanor.  Each unlawful act or practice constitutes a distinct and separate offense.
"§ 143-151.60.  Injunctions.
The Board may make application to any appropriate court for an order enjoining violations of this Article.  Upon a showing by the Board that any person has violated or is about to violate this Article, the court may grant an injunction or a restraining order or take other appropriate action.
"§ 143-151.61.  Certain applicants do not have to be licensed as an associate home inspector before being eligible for licensure as a home inspector.
The requirement that an applicant for licensure as a home inspector first have a license as an associate home inspector does not apply to a person who, prior to October 1, 1996, had been engaged in the business of performing home inspections for compensation for at least one year and had conducted at least 100 home inspections for compensation.  All other requirements for licensure as a home inspector, including passing a licensing examination provided by the Board, apply to an applicant who is exempted by this section from the requirement of prior licensure as an associate home inspector.
"§ 143-151.62.  Persons and practices not affected.
This Article does not apply to any of the following:
(1)	A person who is employed as a code enforcement official by the State or a political subdivision of the State and is certified pursuant to Article 9C of Chapter 143 of the General Statutes, when acting within the scope of that employment.
(2)	A plumbing or heating contractor who does not claim to be a home inspector and is licensed under Article 2 of Chapter 87 of the General Statutes, when acting pursuant to that Article.
(3)	An electrical contractor who does not claim to be a home inspector and is licensed under Article 4 of Chapter 87 of the General Statutes, when acting pursuant to that Article.
(4)	A real estate broker or a real estate sales representative who does not claim to be a home inspector and is licensed under Article 1 of Chapter 93A of the General Statutes, when acting pursuant to that Article.
(5)	A structural pest control licensee licensed under the provisions of Article 4C of Chapter 106 of the General Statutes, an employee of the licensee, or a certified applicator licensed under the provisions of Article 4C of Chapter 106 of the General Statutes who does not claim to be a home inspector, while performing structural pest control activities pursuant to that Article.
"§ 143-151.63.  Administration.
(a)	The Division of Engineering and Building Code in the Department of Insurance shall provide clerical and other staff services required by the Board, and shall administer and enforce all provisions of this Article and all rules adopted under this Article, subject to the direction of the Board.  The Board shall reimburse the Division for its services to the Board.
(b)	Any monies received by the Board pursuant to this Article shall be deposited in the State treasury to the account of the Board and shall be used to administer this Article.
(c)	The books and records of the Board are subject to the oversight of the State Auditor, as provided in G.S. 93B-4."
Sec. 2.  This act is effective upon ratification.