Bill Text: MI SB0180 | 2015-2016 | 98th Legislature | Introduced

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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 - Dead) 2015-03-05 - Referred To Committee On Regulatory Reform [SB0180 Detail]

Download: Michigan-2015-SB0180-Introduced.html

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SENATE BILL No. 180

 

 

March 5, 2015, Introduced by Senator GREEN 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

 

 2  appointed under this article shall commence on 1 of the following

 

 3  dates, as 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

 

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

 

16  152 of the Public Acts of 1979, being sections 338.2201 to

 

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

 

18  to 338.2277.

 

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

 

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

 

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

 

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

 

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

 

24  the fund. The state treasurer shall credit to the fund interest

 

25  and earnings from fund investments. Money in the fund at the

 

26  close of the fiscal year shall remain in the fund and shall not

 

27  lapse to the general fund. The department is the administrator of

 

28  the fund for 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

 

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

 

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

 

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

 

 7  reflect the cumulative annual percentage change in the Detroit

 

 8  consumer price index, subject to a maximum adjustment of 5% in

 

 9  any 1 year. As used in this subsection, "Detroit consumer price

 

10  index" means the most comprehensive index of consumer prices

 

11  available for the Detroit area from the bureau of labor

 

12  statistics of the United States 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

 

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

 

22  a 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

 

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

 

27  licensed 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

 

 3  the records of the department, is considered unlicensed or

 

 4  unregistered.

 

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

 

 6  person, school, or institution that violates subsection (1) or

 

 7  (2) is guilty of a misdemeanor , punishable by a fine of not more

 

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

 

 9  both.

 

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

 

11  person, school, or institution that violates subsection (1) or

 

12  (2) a second or any subsequent time is guilty of a misdemeanor ,

 

13  punishable by a fine of not more than $1,000.00 , or imprisonment

 

14  for not more than 1 year, or both.

 

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

 

16  is not licensed under article 14 as a home inspector or under

 

17  article 24 as a residential builder or a residential maintenance

 

18  and alteration contractor who and that violates subsection (1) or

 

19  (2) is guilty as follows:of 1 of the following:

 

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

 

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

 

22  $25,000.00 , or imprisonment for not more than 1 year, or both.

 

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

 

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

 

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

 

26  or both.

 

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

 

 1  serious injury, a felony punishable by a fine of not less than

 

 2  $5,000.00 or more than $25,000.00 , or imprisonment for not more

 

 3  than 4 years, or both.

 

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

 

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

 

 6  professional engineer, or professional land surveyor and who

 

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

 

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

 

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

 

10  $25,000.00 or imprisonment for not more than 93 days, or both.

 

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

 

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

 

13  more than $25,000.00 or imprisonment for not more than 1 year, or

 

14  both.

 

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

 

16  serious injury, a felony punishable by a fine of not less than

 

17  $5,000.00 or more than $25,000.00 or imprisonment for not more

 

18  than 4 years, or both.

 

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

 

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

 

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

 

22  provided by law.

 

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

 

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

 

25  action relief to restrain or prevent a person from violating

 

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

 

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

 

 1  and attorney fees.

 

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

 

 3  or practicing any of the following:

 

 4        (a) Interior design.

 

 5        (b) Residential building design. As used in this

 

 6  subdivision, "residential building design" means the rendering of

 

 7  residential design services for a detached 1- and 2-family

 

 8  residence building by a person exempted that is exempt under

 

 9  section 2012 from the requirements of section 2012.article 20.

 

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

 

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

 

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

 

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

 

14  338.988.

 

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

 

16  electrical administrative act, 1956 PA 217, MCL 338.881 to

 

17  338.892.

 

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

 

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

 

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

 

21  is not limited to, a licensee or registrant, a board established

 

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

 

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

 

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

 

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

 

26  licensed or registered by the department, or a private

 

27  association that is composed primarily of members of the

 

 1  occupation in which the person is engaging in or attempting to

 

 2  engage in or in which the person is using a title designated

 

 3  under this act without being registered or licensed by the

 

 4  department.

 

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

 

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

 

 7  that violates this section shall be is subject to this section

 

 8  and sections 506, 602, and 606.

 

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

 

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

 

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

 

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

 

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

 

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

 

15  lawful remedy by another person.

 

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

 

17  with the design of interior spaces including preparation of

 

18  documents relative to finishes, systems furniture, furnishings,

 

19  fixtures, equipment, and interior partitions that do not affect

 

20  the building mechanical, structural, electrical, or fire safety

 

21  systems.

 

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

 

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

 

24  (7), a the court entering the conviction shall notify, by mail,

 

25  facsimile transmission, or electronic mail, the bureau of

 

26  commercial services at the department.corporations, securities,

 

27  and commercial licensing bureau of that conviction.

 

 1                            ARTICLE 14

 

 2        Sec. 1401. As used in this article:

 

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

 

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

 

 5  circumstances.

 

 6        (b) "Electrical system" means the total system, beginning

 

 7  with the utility connection, in a residence that facilitates the

 

 8  flow of electricity beginning with the main panel and extending

 

 9  to the subpanels and including branch circuits, and directly

 

10  wired electrical and lighting fixtures.

 

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

 

12  of a structure, including, but not limited to, any of the

 

13  following:

 

14        (i) Slab.

 

15        (ii) Crawl space.

 

16        (iii) Basement.

 

17        (iv) Piers.

 

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

 

19  or combined system that is used to distribute or radiate heat or

 

20  cool air throughout all or part of a residence.

 

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

 

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

 

23  disclose the functional condition of the major systems in a

 

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

 

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

 

26  following:

 

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

 

 1  construction laws, codes, or regulations.

 

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

 

 3  safety laws or regulations.

 

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

 

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

 

 6  or vermin.

 

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

 

 8  or offering to engage in, the business of providing home

 

 9  inspection services but does not include any of the following:

 

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

 

11  or federal governmental unit or agency and is conducting an

 

12  inspection or investigation concerning compliance with either or

 

13  both of the following:

 

14        (A) Health or safety laws or regulations.

 

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

 

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

 

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

 

18  that is reasonably related to a task or prospective task within

 

19  the scope of licensure, registration, or certification:

 

20        (A) Article 20.

 

21        (B) Article 24.

 

22        (C) Article 25.

 

23        (D) Article 26.

 

24        (E) The state plumbing act, 2002 PA 733, MCL 338.3511 to

 

25  338.3569.

 

26        (F) The electrical administrative act, 1956 PA 217, MCL

 

27  338.881 to 338.892.

 

 1        (G) The Forbes mechanical contractors act, 1984 PA 192, MCL

 

 2  338.971 to 338.988.

 

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

 

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

 

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

 

 6  likelihood of a major system becoming nonoperational.

 

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

 

 8        (i) Electrical system.

 

 9        (ii) Heating and air conditioning system.

 

10        (iii) Plumbing system.

 

11        (iv) Structure and foundation.

 

12        (i) "Plumbing system" means that system regulating the

 

13  inward and outward flow of water and sewage in a residence and

 

14  includes, but is not limited to, water heaters, fixtures,

 

15  faucets, valves, and pipes. Plumbing does not include wells,

 

16  septic systems, water softeners, or sump pumps unless included in

 

17  writing in the contract for home inspection services.

 

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

 

19  family living quarters and designed for occupancy by not more

 

20  than 4 families in separate dwelling units. Residence does not

 

21  include any building newly constructed or not previously occupied

 

22  as a dwelling unit.

 

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

 

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

 

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

 

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

 

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

 

 1  article, an individual shall not provide, or offer to provide,

 

 2  home inspection services unless he or she is licensed under this

 

 3  article or unless the individual or services are exempted from

 

 4  licensure under this article under section 1401(f)(i) or (ii). An

 

 5  individual shall not use the term "home inspector" or any other

 

 6  similar title that connotes licensure under this article unless

 

 7  he or she is licensed under this article. An individual who

 

 8  violates this section is subject to the penalties of article 6.

 

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

 

10  department shall license an individual who files a completed

 

11  application and pays the appropriate application and license fee

 

12  and who meets all of the following:

 

13        (a) Education requirements that consist of at least 80

 

14  credit hours of education as determined appropriate by the

 

15  department.

 

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

 

17  under the authority and direction of a home inspector licensed

 

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

 

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

 

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

 

21  the national home inspection examination developed by the

 

22  examination board of professional home inspectors, as it exists

 

23  on the effective date of this article, is considered an

 

24  acceptable examination. Any other examination that utilizes

 

25  psychometric standards and that has substantially the same

 

26  substantive areas of testing, as determined by the board and the

 

27  department, may also be used for purposes of this subdivision.

 

 1  The director, in consultation with the board, may by rule adopt

 

 2  any updates or alternatives to the examination described in this

 

 3  subdivision.

 

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

 

 5  of any felony.

 

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

 

 7  until the expiration of 12 months after that effective date, the

 

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

 

 9  a license; submits the appropriate license and application fees;

 

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

 

11  preceding 3 calendar years he or she has been engaged in

 

12  providing home inspection services and during that period has

 

13  conducted or participated in at least 200 fee-paid home

 

14  inspections; and passes the examination described in subsection

 

15  (2)(c). An individual who meets the conditions described in this

 

16  subsection is not required to meet the requirements of subsection

 

17  (2)(a), (b), and (d).

 

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

 

19  a home inspector if the individual is licensed or otherwise

 

20  regulated in another state that has substantially the same

 

21  standards for licensure as this state, as determined by the

 

22  department, and who meets all other relevant requirements in this

 

23  state.

 

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

 

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

 

26  inspection services shall comply with the requirements of this

 

27  section and section 1405.

 

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

 

 2  inspection services that does not meet the requirements of this

 

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

 

 4  in a court of competent jurisdiction, penalties and sanctions

 

 5  contained in articles 5 and 6, or both.

 

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

 

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

 

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

 

 9  major systems are readily accessible and visible to the home

 

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

 

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

 

12  able to inspect and the reasons for the inability to inspect.

 

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

 

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

 

15  interest in the residence being inspected.

 

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

 

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

 

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

 

19  ownership interest in the residence being inspected.

 

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

 

21  a written home inspection report is delivered to the client at

 

22  least both of the following:

 

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

 

24  detailed description of the major systems to be inspected, the

 

25  type of major deficiencies the home inspection is designed to

 

26  reveal, and items that are excluded from coverage under the

 

27  contract for home inspection services.

 

 1        (b) A statement that a home inspector inspecting a

 

 2  particular residence shall not repair or offer to repair a

 

 3  residence that was the subject of home inspection services

 

 4  provided by that home inspector.

 

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

 

 6  be in writing, executed by the home inspector and either the

 

 7  client or the client's agent, and meet the requirements of

 

 8  subsection (4). A home inspector shall provide a copy of the

 

 9  executed contract for home inspection services to the client at

 

10  the time of its execution.

 

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

 

12  shall be contained in the written contract except that conditions

 

13  of the residence affecting the home inspector's ability to

 

14  conduct a home inspection shall be noted in the report provided

 

15  to the client after the inspection is conducted. Any changes or

 

16  modifications of the terms of a contract for home inspection

 

17  services shall be reduced to writing.

 

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

 

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

 

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

 

21  residence.

 

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

 

23  inspection services:

 

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

 

25  provided.

 

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

 

27  absence of any warranties as to the adequacy of future

 

 1  performance of a major system and that the home inspection is

 

 2  considered a valid assessment of the condition of the residence

 

 3  only as of the date the home inspection is conducted.

 

 4        (c) Any exclusion of defects that are not reasonably

 

 5  apparent by visual inspection.

 

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

 

 7  at the time of the conduct of the home inspection.

 

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

 

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

 

10  inspector shall provide to the client a written home inspection

 

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

 

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

 

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

 

14  home inspector shall list in the report any conditions that

 

15  affect or limit the ability of the home inspector to provide home

 

16  inspection services under the contract.

 

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

 

18  following statements:

 

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

 

20  inspection are excluded.

 

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

 

22  the conduct of the home inspection is excluded.

 

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

 

24  inspection report that the home inspection is considered a valid

 

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

 

26  the home inspection is conducted.

 

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

 

 1  home inspection services and the written home inspection report

 

 2  for at least 18 months after the date of the report.

 

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

 

 4  be resolved by arbitration, if the contract so provides. The

 

 5  arbitration shall be conducted in compliance with the rules of

 

 6  the American arbitration association.

 

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

 

 8  Communications between a home inspector and client, including the

 

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

 

10  intentionally or willfully interfere in the home inspector-client

 

11  relationship or any communications arising from the home

 

12  inspector-client relationship.

 

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

 

14  administrative or civil complaint against a home inspector under

 

15  this article more than 12 months after the date of the

 

16  inspection.

 

17        Sec. 1406. The remedies under this article are cumulative

 

18  and the use of 1 remedy does not bar the use of any other remedy

 

19  provided by law.

 

20        Sec. 1407. The director shall promulgate rules to provide

 

21  for all of the following:

 

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

 

23  of continuing education for professional competence annually.

 

24        (b) Requirements for acceptable courses offered at seminars

 

25  and conventions by trade associations, research institutes, risk

 

26  management entities, manufacturers, suppliers, governmental

 

27  agencies, consulting agencies, or other entities.

 

 1        (c) Acceptable distance learning.

 

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

 

 3  ethics.

 

 4        (e) Alternate forms of demonstrating continuing competency,

 

 5  including comprehensive testing, participation in mentoring

 

 6  programs, research, participation in code hearings conducted by

 

 7  the international code council, and publication of articles in a

 

 8  trade journal or regional magazine as an expert in the field, if

 

 9  those alternate forms are designed to maintain and improve the

 

10  licensee's ability to perform the occupation with competence.

 

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

 

12  has fulfilled the requirements of continuing competency.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

20  after the date it is enacted into law.