Bill Text: MI SB0815 | 2021-2022 | 101st 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 & 601 of 1980 PA 299 (MCL 339.303a & 339.601) & adds art. 14.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2022-01-18 - Referred To Committee On Regulatory Reform [SB0815 Detail]

Download: Michigan-2021-SB0815-Introduced.html

 

 

 

 

 

 

 

 

 

 

 

 

 

SENATE BILL NO. 815

January 18, 2022, Introduced by Senator WOZNIAK and referred to the Committee on Regulatory Reform.

A bill to amend 1980 PA 299, entitled

"Occupational code,"

by amending sections 303a and 601 (MCL 339.303a and 339.601), section 303a as amended by 2014 PA 265 and section 601 as amended by 2016 PA 412, and by adding article 14.

the people of the state of michigan enact:


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Sec. 303a. The term of office of a member of a board appointed under this article shall commence commences on 1 of the following


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dates, as applicable:

 

Accountancy

July 1

 

Architects

April 1

 

Barbers

October 1

 

Collection agencies

July 1

 

Cosmetology

January 1

 

Employment agencies

October 1

 

Hearing aid dealers

October 1

 

Home inspectors

July 1

 

Land surveyors

April 1

 

Landscape architects

July 1

 

Mortuary science

July 1

 

Professional engineers

April 1

 

Real estate appraisers

July 1

 

Real estate brokers and salespersons

July 1

 

Residential builders

April 1

Sec. 601. (1) A person shall not engage in or attempt to engage in the practice of an occupation regulated under this act or use a title designated in this act unless the person possesses a license or registration issued by the department for the occupation.

(2) A school, institution, or person shall not operate or attempt to operate a barber college, school of cosmetology, or real estate school unless the school, institution, or person is licensed or approved by the department.

(3) Subject to section 411, a person whose license or registration is suspended, revoked, or lapsed, as determined by the records of the department, is considered unlicensed or unregistered.


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(4) Except as otherwise provided for in section 735, a person, school, or institution that violates subsection (1) or (2) is guilty of a misdemeanor, punishable by a fine of not more than $500.00 , or imprisonment for not more than 90 days, or both.

(5) Except as otherwise provided for in section 735, a person, school, or institution that violates subsection (1) or (2) a second or any subsequent time is guilty of a misdemeanor, punishable by a fine of not more than $1,000.00 , or imprisonment for not more than 1 year, or both.

(6) Notwithstanding subsections (4) and (5), a person that is not licensed under article 14 as a home inspector or under article 24 as a residential builder or a residential maintenance and alteration contractor and that violates subsection (1) or (2) is guilty as follows:of 1 of the following:

(a) In the case of For a first offense, a misdemeanor punishable by a fine of not less than $5,000.00 or more than $25,000.00, or imprisonment for not more than 1 year, or both.

(b) In the case of For a second or subsequent offense, a misdemeanor punishable by a fine of not less than $5,000.00 or more than $25,000.00 , or imprisonment for not more than 2 years, or both.

(c) In the case of For an offense that causes death or serious injury, a felony punishable by a fine of not less than $5,000.00 or more than $25,000.00, or imprisonment for not more than 4 years, or both.

(7) Notwithstanding subsections (4) and (5), a person that an individual who is not licensed under article 20 as an architect, professional engineer, or professional land surveyor and that who violates subsection (1) or (2) is guilty as follows:


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(a) In the case of For a first offense, a misdemeanor punishable by a fine of not less than $5,000.00 or more than $25,000.00 or imprisonment for not more than 93 days, or both.

(b) In the case of For a second or subsequent offense, a misdemeanor punishable by a fine of not less than $5,000.00 or more than $25,000.00 or imprisonment for not more than 1 year, or both.

(c) In the case of For an offense that causes death or serious injury, a felony punishable by a fine of not less than $5,000.00 or more than $25,000.00 or imprisonment for not more than 4 years, or both.

(8) If a trier of fact finds that a person has violated this act, the trier of fact shall require that person to make restitution, based on proofs submitted to and findings made by the trier of fact as provided by law.

(9) Notwithstanding the existence and pursuit of any other remedy, an affected person may maintain an action for injunctive action relief to restrain or prevent a person from violating subsection (1) or (2). If successful in obtaining injunctive relief, the affected person is entitled to actual costs and attorney fees.

(10) This act does not apply to a person that is engaging in or practicing any of the following:

(a) Interior design.

(b) Residential building design. As used in this subdivision, "residential building design" means the rendering of residential design services for a detached 1- and 2-family residence building by a person that is exempt from the requirements of under section 2012 from the requirements of article 20.

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


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article 11 of the skilled trades regulation act, 2016 PA 407, MCL 339.6101 to 339.6133.

(d) Any activity for which the person is licensed under article 8 of the skilled trades regulation act, 2016 PA 407, MCL 339.5801 to 339.5819.

(e) Any activity for which the person is licensed under article 7 of the skilled trades regulation act, 2016 PA 407, MCL 339.5701 to 339.5739.

(11) As used in subsection (9), "affected person" means a person that is directly affected by the actions of a person that is suspected of violating subsection (1) or (2) and includes, but is not limited to, a licensee or registrant, a board established under this act, the department, a person that utilizes the services of the person that is engaging in or attempting to engage in an occupation that is regulated under this act or using a title that is designated by this act without being licensed or registered by the department, or a private association that is composed primarily of members of the occupation in which the person is engaging in or attempting to engage in or in which the person is using a title designated under this act without being registered or licensed by the department.

(12) An The department may conduct an investigation may be conducted under article 5 to enforce this section. A person that violates this section is subject to this section and sections 506, 602, and 606.

(13) The department, the attorney general, or a county prosecutor may utilize forfeiture as a remedy for a violation of this section in the manner provided for in section 606.

(14) The remedies under this section are independent and


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cumulative. The use of 1 remedy by a person does not bar the use of other lawful remedies by that person or the use of a lawful remedy by another person.

(15) An interior designer may perform services in connection with the design of interior spaces including preparation of documents relative to finishes, systems furniture, furnishings, fixtures, equipment, and interior partitions that do not affect the building mechanical, structural, electrical, or fire safety systems.

(16) At the time a court enters a conviction under for a violation of subsection (4), (5), or (6), or (7), the court shall notify, by mail, facsimile transmission, or electronic mail, email, the department of the conviction.

ARTICLE 14

Sec. 1401. As used in this article:

(a) "Client" means a person on whose behalf a home inspector is acting. The term may include a seller under certain circumstances.

(b) "Electrical system" means the total system, beginning with the utility connection, in a residence that facilitates the flow of electricity beginning with the main panel and extending to the subpanels and including branch circuits, and directly wired electrical and lighting fixtures.

(c) "Foundation" means 1 or more of the supporting elements of a structure, including, but not limited to, any of the following:

(i) Slab.

(ii) Crawl space.

(iii) Basement.

(iv) Piers.


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(d) "Heating and air conditioning system" means a separate or combined system that is used to distribute or radiate heat or cool air throughout all or part of a residence.

(e) "Home inspection services" means services provided to a client, for consideration, that are designed to identify and disclose the functional condition of the major systems in a residence at the time of the inspection. Home inspection services do not include an inspection designed only to disclose any of the following:

(i) Compliance with local, state, or federal building or construction laws, codes, or regulations.

(ii) Compliance with local, state, or federal health and safety laws or regulations.

(iii) The presence or absence of pests, termites, or other vermin or damage resulting from the presence of pests, termites, or other vermin.

(f) "Home inspector" means an individual who is engaged in, or offering to engage in, the business of providing home inspection services but does not include any of the following:

(i) An individual who is acting on behalf of a local, state, or federal governmental unit or agency and is conducting an inspection or investigation concerning compliance with either or both of the following:

(A) Health or safety laws or regulations.

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

(ii) An individual who is licensed, registered, or certified under 1 or more of the following while conducting an inspection that is reasonably related to a task or prospective task within the scope of licensure, registration, or certification:


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(A) Article 20.

(B) Article 24.

(C) Article 25.

(D) Article 26.

(E) Article 7, 8, or 11 of the skilled trades regulation act, 2016 PA 407, MCL 339.5701 to 339.5739, 339.5801 to 339.5819, and 339.6101 to 339.6133.

(g) "Major deficiency" means a defect in 1 or more major systems that may cause a reasonable likelihood of harm to the safety of the occupants or that may result in the reasonable likelihood of a major system becoming nonoperational.

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

(i) Electrical system.

(ii) Heating and air conditioning system.

(iii) Plumbing system.

(iv) Structure and foundation.

(i) "Plumbing system" means that system regulating the inward and outward flow of water and sewage in a residence and includes, but is not limited to, water heaters, fixtures, faucets, valves, and pipes. Plumbing does not include wells, septic systems, water softeners, or sump pumps unless included in writing in the contract for home inspection services.

(j) "Residence" means a building that is used primarily for family living quarters and designed for occupancy by not more than 4 families in separate dwelling units. Residence does not include any building newly constructed or not previously occupied as a dwelling unit.

(k) "Structure" means the walls, windows, doors, and roof on the exterior of a residence and the walls, ceilings, floors,


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windows, and doors on the interior of a residence.

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

Sec. 1403. (1) Beginning on the effective date of the amendatory act that added this section, an individual shall not provide, or offer to provide, home inspection services unless he or she is licensed under this article or unless the individual or services do not require licensure under this article under section 1401(f)(i) or (ii). An individual shall not use the term "home inspector" or any other similar title that connotes licensure under this article unless he or she is licensed under this article. An individual who violates this section is subject to the penalties of article 6.

(2) Except as otherwise provided in subsection (3), the department shall license an individual who files a completed application and pays the appropriate application and license fee and who meets all of the following:

(a) Completed education requirements that consist of not less than 80 credit hours of education as determined appropriate by the department.

(b) Participated in not less than 200 home inspections conducted under the authority and direction of a home inspector licensed under this article, as evidenced by an affidavit of the licensee.

(c) Passed a proctored examination acceptable to the department and the board. The current examination referred to as the national home inspection examination developed by the examination board of professional home inspectors, as it exists on the effective date of this article, is considered an acceptable examination. Any other examination that utilizes psychometric


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standards and that has substantially the same substantive areas of testing, as determined by the board and the department, may also be used for purposes of this subdivision. The director, in consultation with the board, may by rule adopt any updates or alternatives to the examination described in this subdivision.

(d) Is not less than 18 years of age and has not been convicted of any felony.

(3) Beginning on the effective date of this article and until the expiration of 12 months after that effective date, the department shall issue a license to an individual who applies for a license; submits the appropriate license and application fees; evidences, in a manner acceptable to the department, that in the preceding 3 calendar years he or she has been engaged in providing home inspection services and during that period has conducted or participated in not less than 200 fee-paid home inspections; and passes the examination described in subsection (2)(c). An individual who meets the conditions described in this subsection is not required to meet the requirements of subsection (2)(a), (b), and (d).

(4) The department shall issue a license to an individual as a home inspector if the individual is licensed or otherwise regulated in another state that has substantially the same standards for licensure as this state, as determined by the department, and who meets all other relevant requirements in this state.

Sec. 1404. (1) Beginning on the effective date of this article, an individual who provides or offers to provide home inspection services shall comply with the requirements of this section and section 1405.

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


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inspection services that does not meet the requirements of this article is liable to the client for damages and for penalties and sanctions contained in articles 5 or 6, or both.

(3) A home inspector shall inspect those major systems of a residence that are the subject of a contract for home inspection services but is only required to inspect to the extent that those major systems are readily accessible and visible to the home inspector. A home inspector shall indicate in writing any major system, or any part of a major system, that he or she was not able to inspect and the reasons for the inability to inspect.

(4) A home inspector shall disclose whether he or she, an employee or agent, or an immediate family member has an ownership interest in the residence being inspected.

(5) A home inspector shall disclose whether he or she, an employee or agent, or an immediate family member is a member of a board of directors of, or an officer of, an entity that has an ownership interest in the residence being inspected.

(6) A home inspector shall disclose and provide at the time a written home inspection report is delivered to the client at least both of the following:

(a) The scope of the home inspection services, including a detailed description of the major systems to be inspected, the type of major deficiencies the home inspection is designed to reveal, and items that are excluded from coverage under the contract for home inspection services.

(b) A statement that a home inspector inspecting a particular residence shall not repair or offer to repair a residence that was the subject of home inspection services provided by that home inspector.


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Sec. 1405. (1) A contract for home inspection services must be in writing, executed by the home inspector and either the client or the client's agent, and meet the requirements of subsection (4). A home inspector shall provide a copy of the executed contract for home inspection services to the client at the time of its execution.

(2) All terms of a contract for home inspection services must be contained in the written contract except that conditions of the residence affecting the home inspector's ability to conduct a home inspection must be noted in the report provided to the client after the inspection is conducted. Any changes or modifications of the terms of a contract for home inspection services must be reduced to writing.

(3) Unless otherwise indicated in writing, the purchaser or owner of a residence being inspected is considered the client in the case of a home inspection conducted as part of a sale of the residence.

(4) The following must be contained in a contract for home inspection services:

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

(b) Any disclaimers including, but not limited to, the absence of any warranties as to the adequacy of future performance of a major system and that the home inspection is considered a valid assessment of the condition of the residence only as of the date the home inspection is conducted.

(c) Any exclusion of defects that are not reasonably apparent by visual inspection.

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


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the time the home inspection is conducted.

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

(5) After performing home inspection services, a home inspector shall provide to the client a written home inspection report that contains the results of the home inspection. The home inspection report must include a list of the major systems that were inspected and any major systems that were not inspected. The home inspector shall list in the report any conditions that affect or limit the ability of the home inspector to provide home inspection services under the contract.

(6) A home inspection report must include all of the following statements:

(a) That defects that are not reasonably apparent by visual inspection are excluded.

(b) That a major system that is not operable at the time of the conduct of the home inspection is excluded.

(7) The home inspector shall indicate in a written home inspection report that the home inspection is considered a valid assessment of the condition of the residence only as of the date the home inspection is conducted.

(8) A home inspector shall retain a copy of a contract for home inspection services and the written home inspection report for not less than 18 months after the date of the report.

(9) Any disputes between a home inspector and a client may be resolved by arbitration, if the contract so provides. The arbitration must be conducted in compliance with the rules of the American Arbitration Association.

(10) The home inspector-client relationship is privileged. Communications between a home inspector and client, including the


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home inspection report, are privileged. A person shall not intentionally or willfully interfere in the home inspector-client relationship or any communications arising from the home inspector-client relationship.

(11) A client or the department may not file an administrative or civil complaint against a home inspector under this article more than 12 months after the date of the inspection.

Sec. 1406. The remedies under this article are cumulative and the use of 1 remedy does not bar the use of any other remedy provided by law.

Sec. 1407. The director shall promulgate rules to provide for all of the following:

(a) A requirement that licensees complete not less than 20 hours of continuing education for professional competence annually.

(b) Requirements for acceptable courses offered at seminars and conventions by trade associations, research institutes, risk management entities, manufacturers, suppliers, governmental agencies, consulting agencies, or other entities.

(c) Acceptable distance learning.

(d) Standards of performance and practice and a code of ethics.

(e) Alternate forms of demonstrating continuing competency, including, but not limited to, comprehensive testing, participation in mentoring programs, research, participation in code hearings conducted by the international code council, and publication of articles in a trade journal or regional magazine as an expert in the field, if those alternate forms are designed to maintain and improve the licensee's ability to perform the occupation with competence.


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(f) The types of documentation necessary to demonstrate that a licensee has fulfilled the requirements of continuing competency.

Enacting section 1. This amendatory act takes effect 1 year after the date it is enacted into law.

Enacting section 2. This amendatory act does not take effect unless Senate Bill No.____ or House Bill No.____ (request no. 04961'21 a) of the 101st Legislature is enacted into law.

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