Bill Text: MI HB4086 | 2017-2018 | 99th Legislature | Introduced


Bill Title: Occupations; inspectors; licensure and regulation of home inspection services; provide for, and require certain disclosures and contract provisions. Amends secs. 303a, 401 & 601 of 1980 PA 299 (MCL 339.303a et seq.) & adds art. 14.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced) 2017-01-26 - Bill Electronically Reproduced 01/25/2017 [HB4086 Detail]

Download: Michigan-2017-HB4086-Introduced.html

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HOUSE BILL No. 4086

 

 

January 25, 2017, Introduced by Rep. Tedder and referred to the Committee on Regulatory Reform.

 

      A bill to amend 1980 PA 299, entitled

 

"Occupational code,"

 

by amending sections 303a, 401, and 601 (MCL 339.303a, 339.401, and

 

339.601), section 303a as amended by 2014 PA 265, section 401 as

 

amended by 1988 PA 463, and section 601 as amended by 2008 PA 319,

 

and by adding article 14.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

 1        Sec. 303a. The term of office of a member of a board appointed

 

 2  under this article shall commence on 1 of the following dates, as

 

 3  applicable:

 

 

 4

     Accountancy

July 1

 5

     Architects

April 1

 6

     Barbers

October 1

 7

     Collection agencies

July 1


 1

     Cosmetology

January 1

 2

     Employment agencies

October 1

 3

     Hearing aid dealers

October 1

 4

     Home inspectors

July 1

 5

     Land surveyors

April 1

 6

     Landscape architects

July 1

 7

     Mortuary science

July 1

 8

     Professional engineers

April 1

 9

     Real estate appraisers

July 1

10

     Real estate brokers and salespersons

July 1

11

     Residential builders

April 1

 

 

12        Sec. 401. (1) The Except as otherwise provided in a specific

 

13  article, the specific amounts to be charged for licenses,

 

14  registrations, and other activities provided for in this act shall

 

15  be as are prescribed in the state license fee act, Act No. 152 of

 

16  the Public Acts of 1979, being sections 338.2201 to 338.2277 of the

 

17  Michigan Compiled Laws.1979 PA 152, MCL 338.2201 to 338.2277.

 

18        (2) The occupational fund is created within the state

 

19  treasury. The state treasurer may receive money or other assets

 

20  from any source for deposit into the fund, including money from

 

21  this act and the state license fee act, 1979 PA 152, MCL 338.2201

 

22  to 338.2277. The state treasurer shall direct the investment of the

 

23  fund. The state treasurer shall credit to the fund interest and

 

24  earnings from fund investments. Money in the fund at the close of

 

25  the fiscal year shall remain in the fund and shall not lapse to the

 

26  general fund. The department is the administrator of the fund for

 

27  auditing purposes.


 1        (3) Fees established under this act are intended to bear a

 

 2  reasonable relation to the department's cost, including overhead,

 

 3  of the service or action for which the fee is charged and shall be

 

 4  deposited into the fund to offset those costs. The department shall

 

 5  adjust on an annual basis the license fees prescribed under this

 

 6  act by an amount determined by the state treasurer to reflect the

 

 7  cumulative annual percentage change in the Detroit consumer price

 

 8  index, subject to a maximum adjustment of 5% in any 1 year. As used

 

 9  in this subsection, "Detroit consumer price index" means the most

 

10  comprehensive index of consumer prices available for the Detroit

 

11  area from the Bureau of Labor Statistics of the United States

 

12  Department of Labor.

 

13        (4) The department shall expend money from the fund, on

 

14  appropriation, only for the operation of the corporations,

 

15  securities, and commercial licensing bureau and indirect overhead

 

16  expenses of the department that include, but are not limited to,

 

17  the purchase and sale to the general public of printed laws and

 

18  rules.

 

19        Sec. 601. (1) A person shall not engage in or attempt to

 

20  engage in the practice of an occupation regulated under this act or

 

21  use a title designated in this act unless the person possesses a

 

22  license or registration issued by the department for the

 

23  occupation.

 

24        (2) A school, institution, or person shall not operate or

 

25  attempt to operate a barber college, school of cosmetology, or real

 

26  estate school unless the school, institution, or person is licensed

 

27  or approved by the department.


 1        (3) Subject to section 411, a person whose license or

 

 2  registration is suspended, revoked, or lapsed, as determined by the

 

 3  records of the department, is considered unlicensed or

 

 4  unregistered.

 

 5        (4) Except as otherwise provided for in section 735, a person,

 

 6  school, or institution that violates subsection (1) or (2) is

 

 7  guilty of a misdemeanor , punishable by a fine of not more than

 

 8  $500.00 , or imprisonment for not more than 90 days, or both.

 

 9        (5) Except as otherwise provided for in section 735, a person,

 

10  school, or institution that violates subsection (1) or (2) a second

 

11  or any subsequent time is guilty of a misdemeanor , punishable by a

 

12  fine of not more than $1,000.00 , or imprisonment for not more than

 

13  1 year, or both.

 

14        (6) Notwithstanding subsections (4) and (5), a person that is

 

15  not licensed under article 14 as a home inspector or under article

 

16  24 as a residential builder or a residential maintenance and

 

17  alteration contractor who and that violates subsection (1) or (2)

 

18  is guilty as follows:of 1 of the following:

 

19        (a) In the case of For a first offense, a misdemeanor

 

20  punishable by a fine of not less than $5,000.00 or more than

 

21  $25,000.00 , or imprisonment for not more than 1 year, or both.

 

22        (b) In the case of For a second or subsequent offense, a

 

23  misdemeanor punishable by a fine of not less than $5,000.00 or more

 

24  than $25,000.00 , or imprisonment for not more than 2 years, or

 

25  both.

 

26        (c) In the case of For an offense that causes death or serious

 

27  injury, a felony punishable by a fine of not less than $5,000.00 or


 1  more than $25,000.00 , or imprisonment for not more than 4 years,

 

 2  or both.

 

 3        (7) Notwithstanding subsections (4) and (5), a person an

 

 4  individual who is not licensed under article 20 as an architect,

 

 5  professional engineer, or professional land surveyor and who

 

 6  violates subsection (1) or (2) is guilty as follows:

 

 7        (a) In the case of For a first offense, a misdemeanor

 

 8  punishable by a fine of not less than $5,000.00 or more than

 

 9  $25,000.00 or imprisonment for not more than 93 days, or both.

 

10        (b) In the case of For a second or subsequent offense, a

 

11  misdemeanor punishable by a fine of not less than $5,000.00 or more

 

12  than $25,000.00 or imprisonment for not more than 1 year, or both.

 

13        (c) In the case of For an offense that causes death or serious

 

14  injury, a felony punishable by a fine of not less than $5,000.00 or

 

15  more than $25,000.00 or imprisonment for not more than 4 years, or

 

16  both.

 

17        (8) Any A conviction for any violation of this act shall

 

18  include a requirement that restitution be made, based upon on

 

19  proofs submitted to and findings made by the trier of fact as

 

20  provided by law.

 

21        (9) Notwithstanding the existence and pursuit of any other

 

22  remedy, an affected person may maintain an action for injunctive

 

23  action relief to restrain or prevent a person from violating

 

24  subsection (1) or (2). If successful in obtaining injunctive

 

25  relief, the affected person shall be is entitled to actual costs

 

26  and attorney fees.

 

27        (10) This act does not apply to a person that is engaging in


 1  or practicing any of the following:

 

 2        (a) Interior design.

 

 3        (b) Residential building design. As used in this subdivision,

 

 4  "residential building design" means the rendering of residential

 

 5  design services for a detached 1- and 2-family residence building

 

 6  by a person exempted that is exempt under section 2012 from the

 

 7  requirements of section 2012.article 20.

 

 8        (c) Any activity for which the person is licensed under the

 

 9  state plumbing act, 2002 PA 733, MCL 338.3511 to 338.3569.

 

10        (d) Any activity for which the person is licensed under the

 

11  Forbes mechanical contractors act, 1984 PA 192, MCL 338.971 to

 

12  338.988.

 

13        (e) Any activity for which the person is licensed under the

 

14  electrical administrative act, 1956 PA 217, MCL 338.881 to 338.892.

 

15        (11) As used in subsection (9), "affected person" means a

 

16  person that is directly affected by the actions of a person that is

 

17  suspected of violating subsection (1) or (2) and includes, but is

 

18  not limited to, a licensee or registrant, a board established

 

19  pursuant to under this act, the department, a person who that has

 

20  utilized the services of the person that is engaging in or

 

21  attempting to engage in an occupation regulated under this act or

 

22  is using a title designated by under this act without being

 

23  licensed or registered by the department, or a private association

 

24  that is composed primarily of members of the occupation in which

 

25  the person is engaging in or attempting to engage in or in which

 

26  the person is using a title designated under this act without being

 

27  registered or licensed by the department.


 1        (12) An The department may conduct an investigation may be

 

 2  conducted under article 5 to enforce this section. A person who

 

 3  that violates this section shall be is subject to this section and

 

 4  sections 506, 602, and 606.

 

 5        (13) The department, the attorney general, or a county

 

 6  prosecutor may utilize forfeiture as a remedy for a violation of

 

 7  this section in the manner provided for in section 606.

 

 8        (14) The remedies under this section are independent and

 

 9  cumulative. The use of 1 remedy by a person shall does not bar the

 

10  use of other lawful remedies by that person or the use of a lawful

 

11  remedy by another person.

 

12        (15) An interior designer may perform services in connection

 

13  with the design of interior spaces including preparation of

 

14  documents relative to finishes, systems furniture, furnishings,

 

15  fixtures, equipment, and interior partitions that do not affect the

 

16  building mechanical, structural, electrical, or fire safety

 

17  systems.

 

18        (16) Upon entering a conviction under If a court enters a

 

19  conviction for a violation of subsection (4), (5), or (6), or (7),

 

20  a the court entering the conviction shall notify, by mail,

 

21  facsimile transmission, or electronic mail, the bureau of

 

22  commercial services at the department.corporations, securities, and

 

23  commercial licensing bureau of that conviction.

 

24                            ARTICLE 14

 

25        Sec. 1401. As used in this article:

 

26        (a) "Client" means a person on whose behalf a home inspector

 

27  is acting. The term may include a seller under certain


 1  circumstances.

 

 2        (b) "Electrical system" means the total system, beginning with

 

 3  the utility connection, in a residence that facilitates the flow of

 

 4  electricity beginning with the main panel and extending to the

 

 5  subpanels and including branch circuits, and directly wired

 

 6  electrical and lighting fixtures.

 

 7        (c) "Foundation" means 1 or more of the supporting elements of

 

 8  a structure, including, but not limited to, any of the following:

 

 9        (i) Slab.

 

10        (ii) Crawl space.

 

11        (iii) Basement.

 

12        (iv) Piers.

 

13        (d) "Heating and air conditioning system" means a separate or

 

14  combined system that is used to distribute or radiate heat or cool

 

15  air throughout all or part of a residence.

 

16        (e) "Home inspection services" means services provided to a

 

17  client, for consideration, that are designed to identify and

 

18  disclose the functional condition of the major systems in a

 

19  residence at the time of the inspection. Home inspection services

 

20  do not include an inspection designed only to disclose any of the

 

21  following:

 

22        (i) Compliance with local, state, or federal building or

 

23  construction laws, codes, or regulations.

 

24        (ii) Compliance with local, state, or federal health and

 

25  safety laws or regulations.

 

26        (iii) The presence or absence of pests, termites, or other

 

27  vermin or damage resulting from the presence of pests, termites, or


 1  vermin.

 

 2        (f) "Home inspector" means an individual who is engaged in, or

 

 3  offering to engage in, the business of providing home inspection

 

 4  services but does not include any of the following:

 

 5        (i) An individual who is acting on behalf of a local, state,

 

 6  or federal governmental unit or agency and is conducting an

 

 7  inspection or investigation concerning compliance with either or

 

 8  both of the following:

 

 9        (A) Health or safety laws or regulations.

 

10        (B) Construction or building laws, codes, or regulations.

 

11        (ii) An individual who is licensed, registered, or certified

 

12  under 1 or more of the following while conducting an inspection

 

13  that is reasonably related to a task or prospective task within the

 

14  scope of licensure, registration, or certification:

 

15        (A) Article 20.

 

16        (B) Article 24.

 

17        (C) Article 25.

 

18        (D) Article 26.

 

19        (E) Article 7, 8, or 11 of the skilled trades regulation act,

 

20  2016 PA 407, MCL 339.5701 to 339.5739, 339.5801 to 339.5819, and

 

21  339.6101 to 339.6133.

 

22        (g) "Major deficiency" means a defect in 1 or more major

 

23  systems that may cause the reasonable likelihood of harm to the

 

24  safety of the occupants or that may result in the reasonable

 

25  likelihood of a major system becoming nonoperational.

 

26        (h) "Major system" means any 1 of the following:

 

27        (i) Electrical system.


 1        (ii) Heating and air conditioning system.

 

 2        (iii) Plumbing system.

 

 3        (iv) Structure and foundation.

 

 4        (i) "Plumbing system" means that system regulating the inward

 

 5  and outward flow of water and sewage in a residence and includes,

 

 6  but is not limited to, water heaters, fixtures, faucets, valves,

 

 7  and pipes. Plumbing does not include wells, septic systems, water

 

 8  softeners, or sump pumps unless included in writing in the contract

 

 9  for home inspection services.

 

10        (j) "Residence" means a building that is used primarily for

 

11  family living quarters and designed for occupancy by not more than

 

12  4 families in separate dwelling units. Residence does not include

 

13  any building newly constructed or not previously occupied as a

 

14  dwelling unit.

 

15        (k) "Structure" means the walls, windows, doors, and roof on

 

16  the exterior of a residence and the walls, ceilings, floors,

 

17  windows, and doors on the interior of a residence.

 

18        Sec. 1402. There is created a home inspectors board.

 

19        Sec. 1403. (1) Beginning on the effective date of this

 

20  article, an individual shall not provide, or offer to provide, home

 

21  inspection services unless he or she is licensed under this article

 

22  or unless the individual or services are exempted from licensure

 

23  under this article under section 1401(f)(i) or (ii). An individual

 

24  shall not use the term "home inspector" or any other similar title

 

25  that connotes licensure under this article unless he or she is

 

26  licensed under this article. An individual who violates this

 

27  section is subject to the penalties of article 6.


 1        (2) Except as otherwise provided in subsection (3), the

 

 2  department shall license an individual who files a completed

 

 3  application and pays the appropriate application and license fee

 

 4  and who meets all of the following:

 

 5        (a) Education requirements that consist of at least 80 credit

 

 6  hours of education as determined appropriate by the department.

 

 7        (b) Participation in at least 200 home inspections conducted

 

 8  under the authority and direction of a home inspector licensed

 

 9  under this article, as evidenced by an affidavit of the licensee.

 

10        (c) The passage of a proctored examination acceptable to the

 

11  department and the board. The current examination referred to as

 

12  the national home inspection examination developed by the

 

13  examination board of professional home inspectors, as it exists on

 

14  the effective date of this article, is considered an acceptable

 

15  examination. Any other examination that utilizes psychometric

 

16  standards and that has substantially the same substantive areas of

 

17  testing, as determined by the board and the department, may also be

 

18  used for purposes of this subdivision. The director, in

 

19  consultation with the board, may by rule adopt any updates or

 

20  alternatives to the examination described in this subdivision.

 

21        (d) Is at least 18 years of age and has not been convicted of

 

22  any felony.

 

23        (3) Beginning on the effective date of this article and until

 

24  the expiration of 12 months after that effective date, the

 

25  department shall issue a license to an individual who applies for a

 

26  license; submits the appropriate license and application fees;

 

27  documents, in a manner acceptable to the department, that in the


 1  preceding 3 calendar years he or she has been engaged in providing

 

 2  home inspection services and during that period has conducted or

 

 3  participated in at least 200 fee-paid home inspections; and passes

 

 4  the examination described in subsection (2)(c). An individual who

 

 5  meets the conditions described in this subsection is not required

 

 6  to meet the requirements of subsection (2)(a), (b), and (d).

 

 7        (4) The department shall issue a license to an individual as a

 

 8  home inspector if the individual is licensed or otherwise regulated

 

 9  in another state that has substantially the same standards for

 

10  licensure as this state, as determined by the department, and who

 

11  meets all other relevant requirements in this state.

 

12        Sec. 1404. (1) Beginning on the effective date of this

 

13  article, an individual who provides or offers to provide home

 

14  inspection services shall comply with the requirements of this

 

15  section and section 1405.

 

16        (2) A home inspector who enters into a contract for home

 

17  inspection services that does not meet the requirements of this

 

18  article is subject to an action for damages brought by the client

 

19  in a court of competent jurisdiction, penalties and sanctions

 

20  contained in articles 5 and 6, or both.

 

21        (3) A home inspector shall inspect those major systems of a

 

22  residence that are the subject of a contract for home inspection

 

23  services but is only required to inspect to the extent that those

 

24  major systems are readily accessible and visible to the home

 

25  inspector. A home inspector shall indicate in writing any major

 

26  system, or any part of a major system, that he or she was not able

 

27  to inspect and the reasons for the inability to inspect.


 1        (4) The home inspector shall disclose whether he or she, an

 

 2  employee or agent, or an immediate family member has an ownership

 

 3  interest in the residence being inspected.

 

 4        (5) A home inspector shall disclose whether he or she, an

 

 5  employee or agent, or an immediate family member is a member of a

 

 6  board of directors of, or an officer of, an entity that has an

 

 7  ownership interest in the residence being inspected.

 

 8        (6) A home inspector shall disclose and provide at the time a

 

 9  written home inspection report is delivered to the client at least

 

10  both of the following:

 

11        (a) The scope of the home inspection services, including a

 

12  detailed description of the major systems to be inspected, the type

 

13  of major deficiencies the home inspection is designed to reveal,

 

14  and items that are excluded from coverage under the contract for

 

15  home inspection services.

 

16        (b) A statement that a home inspector inspecting a particular

 

17  residence shall not repair or offer to repair a residence that was

 

18  the subject of home inspection services provided by that home

 

19  inspector.

 

20        Sec. 1405. (1) A contract for home inspection services shall

 

21  be in writing, executed by the home inspector and either the client

 

22  or the client's agent, and meet the requirements of subsection (4).

 

23  A home inspector shall provide a copy of the executed contract for

 

24  home inspection services to the client at the time of its

 

25  execution.

 

26        (2) All terms of a contract for home inspection services shall

 

27  be contained in the written contract except that conditions of the


 1  residence affecting the home inspector's ability to conduct a home

 

 2  inspection shall be noted in the report provided to the client

 

 3  after the inspection is conducted. Any changes or modifications of

 

 4  the terms of a contract for home inspection services shall be

 

 5  reduced to writing.

 

 6        (3) Unless otherwise indicated in writing, the purchaser or

 

 7  owner of a residence being inspected is considered the client in

 

 8  the case of a home inspection conducted as part of a sale of the

 

 9  residence.

 

10        (4) The following shall be contained in a contract for home

 

11  inspection services:

 

12        (a) A description of the home inspection services to be

 

13  provided.

 

14        (b) Any disclaimers including, but not limited to, the absence

 

15  of any warranties as to the adequacy of future performance of a

 

16  major system and that the home inspection is considered a valid

 

17  assessment of the condition of the residence only as of the date

 

18  the home inspection is conducted.

 

19        (c) Any exclusion of defects that are not reasonably apparent

 

20  by visual inspection.

 

21        (d) Any exclusion of any major system that is not operable at

 

22  the time of the conduct of the home inspection.

 

23        (e) The disclosures required in section 1404(4) and (5).

 

24        (5) After performing home inspection services, a home

 

25  inspector shall provide to the client a written home inspection

 

26  report that contains the results of the home inspection. The home

 

27  inspection report shall include a list of the major systems that


 1  were inspected and any major systems that were not inspected. The

 

 2  home inspector shall list in the report any conditions that affect

 

 3  or limit the ability of the home inspector to provide home

 

 4  inspection services under the contract.

 

 5        (6) A home inspection report shall include all of the

 

 6  following statements:

 

 7        (a) That defects that are not reasonably apparent by visual

 

 8  inspection are excluded.

 

 9        (b) That a major system that is not operable at the time of

 

10  the conduct of the home inspection is excluded.

 

11        (7) The home inspector shall indicate in a written home

 

12  inspection report that the home inspection is considered a valid

 

13  assessment of the condition of the residence only as of the date

 

14  the home inspection is conducted.

 

15        (8) A home inspector shall retain a copy of a contract for

 

16  home inspection services and the written home inspection report for

 

17  at least 18 months after the date of the report.

 

18        (9) Any disputes between a home inspector and a client may be

 

19  resolved by arbitration, if the contract so provides. The

 

20  arbitration shall be conducted in compliance with the rules of the

 

21  American arbitration association.

 

22        (10) The home inspector-client relationship is privileged.

 

23  Communications between a home inspector and client, including the

 

24  home inspection report, are privileged. A person shall not

 

25  intentionally or willfully interfere in the home inspector-client

 

26  relationship or any communications arising from the home inspector-

 

27  client relationship.


 1        (11) A client or the department may not file an administrative

 

 2  or civil complaint against a home inspector under this article more

 

 3  than 12 months after the date of the inspection.

 

 4        Sec. 1406. The remedies under this article are cumulative and

 

 5  the use of 1 remedy does not bar the use of any other remedy

 

 6  provided by law.

 

 7        Sec. 1407. The director shall promulgate rules to provide for

 

 8  all of the following:

 

 9        (a) A requirement that licensees complete at least 20 hours of

 

10  continuing education for professional competence annually.

 

11        (b) Requirements for acceptable courses offered at seminars

 

12  and conventions by trade associations, research institutes, risk

 

13  management entities, manufacturers, suppliers, governmental

 

14  agencies, consulting agencies, or other entities.

 

15        (c) Acceptable distance learning.

 

16        (d) Standards of performance and practice and a code of

 

17  ethics.

 

18        (e) Alternate forms of demonstrating continuing competency,

 

19  including comprehensive testing, participation in mentoring

 

20  programs, research, participation in code hearings conducted by the

 

21  international code council, and publication of articles in a trade

 

22  journal or regional magazine as an expert in the field, if those

 

23  alternate forms are designed to maintain and improve the licensee's

 

24  ability to perform the occupation with competence.

 

25        (f) What proof is necessary to demonstrate that a licensee has

 

26  fulfilled the requirements of continuing competency.

 

27        Sec. 1408. Fees for an individual who is licensed or seeking


 1  licensure as a home inspector under this article are as follows:

 

 2        (a) Nonrefundable application processing fee, $100.00.

 

 3        (b) Per year license fee, $100.00.

 

 4        (c) Examination fee, if applicable, $200.00.

 

 5        (d) Examination review fee, if applicable, $20.00.

 

 6        Enacting section 1. This amendatory act takes effect 1 year

 

 7  after the date it is enacted into law.

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