2007 -- H 5555

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LC02157

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2007

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A N A C T

RELATING TO BUSINESSES AND PROFESSIONS -- CONTRACTORS' REGISTRATION

BOARD -- HOME INSPECTION

     Introduced By: Representatives San Bento, Schadone, and Shanley

     Date Introduced: February 28, 2007

     Referred To: House Corporations

It is enacted by the General Assembly as follows:

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     SECTION 1. Sections 5-65.1-2, 5-65.1-4, 5-65.1-10, 5-65.1-11, 5-65.1-13 and 5-65.1-14

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of the General Laws in Chapter 5-65.1 entitled "Home Inspectors" are hereby amended to read as

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follows:

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     5-65.1-2. Definitions. -- When used in this chapter:

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      (1) "Associate home inspector" means a person who is employed by a licensed home

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inspector to conduct a home inspection of a residential building on behalf of a client for a fee

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under the direct supervision of the licensed home inspector and is licensed pursuant to the

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provisions of this chapter.

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      (2) "Board" means the contractors' registration board.

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      (3) "Client" means any person who engages, or seeks to engage, the services of a home

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inspector for the purpose of obtaining an inspection of, and written report upon, the condition of a

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residential building.

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      (4) "Home inspector" means any person licensed as a home inspector to conduct a home

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inspection of a residential building on behalf of a client for a fee pursuant to the provisions of this

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chapter.

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      (5) "Home inspection" means an inspection and a written evaluation of the following

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readily visible and accessible components of a residential building: heating, cooling, plumbing,

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and electrical systems, structural components, foundation, roof, masonry structure, exterior and

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interior components and any other related residential housing components, unless the scope of the

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inspection is otherwise clearly limited, in writing, in the inspection report. Unless otherwise

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expressly agreed to, in writing, a home inspection shall be based solely on observation of the

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readily visible and apparent condition of the foregoing components of a residential building as

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they exist on the date of the inspection, and it is not the purpose of the inspection to identify

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violations of or noncompliance with governmental codes or regulation. A home inspection shall,

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at a minimum, conform to any standards of practice promulgated by the board.

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      (6) "Public body" or "agency" means any executive, legislative, judicial, regulatory or

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administrative body of the state or any political subdivision thereof; including, but not limited to,

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public officials elected or appointed and any department, division, agency, commission, board,

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office, bureau, authority, any school, fire, or water district, or other agency or quasi-public agency

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of state or local government which exercises governmental functions.

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      (7) "Residential building" means a structure consisting of one to four (4) family dwelling

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units that has been occupied as a dwelling prior to the time when a home inspection is requested

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or contracted for in accordance with this chapter, but shall not include any structure newly

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constructed and not previously occupied. or more residences and their appurtenances.

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     5-65.1-4. Eligibility for licensure as home inspector. -- (a) To be eligible for licensure

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as a home inspector, an applicant shall fulfill the following requirements:

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      (1) Be of good moral character;

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

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      (3) Have been engaged as a licensed associate home inspector for no less than one year,

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and have performed not less than one hundred (100) home inspections for compensation, or have

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been a registered/licensed contractor in good standing in any state for an aggregate of not less

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than five (5) years; and

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      (4) Have passed an examination approved or administered by the board. The

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examination may have been passed before July 1, 2001.

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      (b) For the first three hundred and sixty-five (365) days after After July 1, 2001, the

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board shall issue a license to any person upon application, provided that the applicant meets:

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      (1) The requirements of subdivisions (a)(1), (2) and (4) of this section, and either:

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      (i) Has been engaged in the practice of home inspections for compensation for not less

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than one year prior to July 1, 2003, the effective date of this chapter, and has performed not less

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than one hundred (100) home inspections for compensation prior to July, 2003 the effective date

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of this chapter; or

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      (ii) Is a registered/licensed contractor in good standing in any state for an aggregate of

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not less than five (5) years; or

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      (2) The requirements of subdivisions (a)(1) and (2) of this section, and has been engaged

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in the practice of home inspections for compensation for not less than two (2) years and

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performed not less than one hundred fifty (150) home inspections for compensation prior to July

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1, 2003 2006.

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     5-65.1-10. Insurance requirements. -- (a) Every licensed home inspector and associate

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home inspector shall secure, maintain, and file with the board a certificate of insurance for an

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errors and omissions policy and a certificate of insurance for a general liability policy; both shall

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be for a minimum amount of two hundred and fifty thousand dollars ($250,000) per occurrence,

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and five hundred thousand dollars ($500,000) in the aggregate. These certificates must be valid

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from the date a license is issued until the license expires. This proof shall be deemed satisfactory

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if the policy is carried by the corporation, partnership or franchise for which the home inspector is

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a contracted employee and the home inspector or associate home inspector is specifically covered

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by such policy.

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      (b) Every proof of an errors and omissions or general liability policy required to be filed

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with the board shall not be effective unless it provides that the insurance may not be canceled

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until at least ten (10) days notice of intention to cancel or to not renew has been received in

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writing by the board.

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      (c) Failure of the licensee or corporation or partnership to maintain this insurance will

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result in the immediate loss of his or her license.

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     5-65.1-11. Grounds for discipline -- Injunctions. -- (a) After a hearing in accordance

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with the administrative regulations promulgated by the board, the board may revoke, suspend, or

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refuse to issue, reinstate, or reissue a license if the board determines that a licensee or applicant

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has:

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      (1) Disclosed any information concerning the results of the home inspection without the

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approval of a client or the client's representatives;

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      (2) Accepted compensation from more than one interested party for the same service

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without the consent of all interested parties;

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      (3) Accepted commissions or allowances, directly or indirectly, from other parties

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dealing with their client in connection with the inspection for which the licensee is responsible;

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      (4) Failed to promptly disclose to a client information about any business interest of the

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licensee which may affect the client in connection with the home inspection;

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      (5) Obtained a license or authorization to sit for an examination, as the case may be,

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through fraud, deception, or misrepresentation;

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      (6) Engaged in the use or employment of dishonesty, fraud, deception,

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misrepresentation, false promise, or false pretense;

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      (7) Engaged in gross negligence, gross malpractice, or gross incompetence;

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      (8) Engaged in repeated acts of negligence, malpractice, or incompetence;

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      (9) Engaged in professional or occupational misconduct as may be determined by the

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board;

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      (10) Been convicted of any crime involving moral turpitude or any crime relating

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adversely to the activity regulated by the board. For the purpose of this subsection a plea of

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guilty, or nolo contendere shall be deemed a conviction;

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      (11) Had his or her authority to engage in the activity regulated by the board revoked or

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suspended by any other state, agency or authority for reasons consistent with this section;

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      (12) Attempted to limit liability for negligent or wrongful errors or omissions by use of a

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clause within a performance contract that limits the damages for negligent or wrongful errors or

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omissions;

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      (13) Failed to provide a written report of the completed home inspection;

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      (14) Violated or failed to comply with any order of the board or provisions of this

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chapter or any rule or regulation promulgated and administered by the board pursuant to this

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chapter;

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      (15) Become incapable, for medical or any other material reason, of discharging the

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functions of a licensee in a manner consistent with the public's health, safety, and welfare;

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      (16) Failed to obtain or maintain the insurance required by section 5-65.1-10;

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      (17) Knowingly assisted an unlicensed person to act in violation of this chapter; or

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      (18) Failed to comply with the provisions of section 5-20.8-8.

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      (b) In addition to all other remedies, when it appears to the board that a person has

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engaged in, or is engaging in, any act, practice or transaction which violates the provisions of this

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chapter, the board may direct the attorney general to apply to the court for an injunction

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restraining the person from violating the provisions of this chapter.

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      (c) (1) The board may, after a hearing, impose a fine in an amount not to exceed five

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hundred dollars ($500) five thousand dollars ($5,000) for the first violation of this chapter, or any

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rules or regulations promulgated by the board.

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      (2) For each second violation of a particular subsection of this chapter or of a rule or

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regulation promulgated by the board, a fine not to exceed one thousand dollars ($1,000) ten

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thousand dollars ($10,000) may be imposed after a hearing by the board.

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      (d) The board, may, in lieu of a fine or other sanction, order a licensee to attend

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continuing education courses as appropriate. Failure to adhere to the requirement could result in

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immediate revocation of a license.

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     5-65.1-13. Violations -- Penalties. -- (a) Any person who violates a final order of the

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board is deemed guilty of a misdemeanor and, upon conviction, may be imprisoned for a term not

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exceeding one year, or fined not more than one thousand dollars ($1,000) ten thousand dollars

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($10,000) for each offense.

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      (b) In addition to any sentence or fine imposed by the court under subsection (a) of this

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section, the court may order a defendant to comply with any outstanding fine or fines previously

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imposed by the board pursuant to this chapter. A final order of the board may also be enforced in

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a civil contempt proceeding brought upon complaint in the district court.

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     5-65.1-14. Home inspector appointments to the board. -- Notwithstanding any

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provisions in section 5-65-14 to the contrary, for a period of one year after July 1, 2001, the

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effective date of this chapter, the initial two (2) home inspectors appointed to the board shall not

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be required, at the time of their initial appointment, to be licensed under the provisions of this

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chapter, provided the appointed home inspectors have been engaged as home inspectors in this

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state for not less than five (5) years immediately preceding their appointment, and have

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performed not less than one thousand (1000) home inspections for compensation. Subsequent

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appointees to the board shall be licensed pursuant to this chapter and shall possess the foregoing

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minimum qualifications.

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     SECTION 2. This act shall take effect upon passage.

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LC02157

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO BUSINESSES AND PROFESSIONS -- CONTRACTORS' REGISTRATION

BOARD -- HOME INSPECTION

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     This act would change the time period eligibility for licensing as a home inspector from

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three hundred sixty-five (365) days after the effective date of the chapter. The act would also

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change the definition of "residence building". Finally, the act would increase fines for violations

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of its provisions.

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     This act would take effect upon passage.

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LC02157

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