Bill Text: MI HB4162 | 2009-2010 | 95th 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 (Democrat 1-0)

Status: (Introduced - Dead) 2009-02-05 - Printed Bill Filed 02/05/2009 [HB4162 Detail]

Download: Michigan-2009-HB4162-Introduced.html

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HOUSE BILL No. 4162

 

February 4, 2009, Introduced by Rep. LeBlanc 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 2006 PA 489, 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 terms provided for in this act shall commence

 

 2  on the following dates:

 

 

3       Accountancy                                    July 1

1       Architects                                     April 1

2       Auctioneers                                    October 1

3       Barbers                                        October 1

4       Collection agencies                            July 1

5       Community planners                             July 1

6       Cosmetology                                    January 1

7       Employment agencies                            October 1

8       Foresters                                      April 1

9       Hearing aid dealers                            October 1

10      Home inspectors                                July 1

11      Land surveyors                                 April 1

12      Landscape architects                           July 1

13      Mortuary science                               July 1

14      Professional engineers                         April 1

15      Real estate appraisers                         July 1

16      Real estate brokers and salespersons           July 1

17      Residential builders                           April 1

 

 

18        Sec. 401. (1) The Except as otherwise provided for in a

 

19  specific article, the specific amounts to be charged for

 

20  licenses, registrations, and other activities provided for in

 

21  this act shall be as prescribed in the state license fee act, Act

 

22  No. 152 of the Public Acts of 1979, being sections 338.2201 to

 

23  338.2277 of the Michigan Compiled Laws 1979 PA 152, MCL 338.2201

 

24  to 338.2277.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 4  lapse to the general fund. The department shall be the

 

 5  administrator of the fund for auditing purposes.

 

 6        (3) Fees established within this act shall be intended to

 

 7  bear a reasonable relation to the cost, including overhead, of

 

 8  the service or action and shall be deposited into the fund to

 

 9  offset the department's costs associated with regulation of this

 

10  act. The department shall adjust on an annual basis the license

 

11  fees prescribed in this act by an amount determined by the state

 

12  treasurer to reflect the cumulative annual percentage change in

 

13  the Detroit consumer price index, not to exceed 5%. As used in

 

14  this subsection, "Detroit consumer price index" means the most

 

15  comprehensive index of consumer prices available for the Detroit

 

16  area from the bureau of labor statistics of the United States

 

17  department of labor.

 

18        (4) The department shall expend money from the fund, upon

 

19  appropriation, only for the operation of the bureau of commercial

 

20  services and indirect overhead expenses of the department that

 

21  include, but are not limited to, the purchase and sale of printed

 

22  laws and rules to the general public.

 

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

 

24  engage in the practice of an occupation regulated under this act

 

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

 

26  a license or registration issued by the department for the

 

27  occupation.

 

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

 

 2  attempt to operate a barber college, school of cosmetology, or

 

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

 

 4  licensed or approved by the department.

 

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

 

 6  registration is suspended, revoked, or lapsed, as determined by

 

 7  the records of the department, is considered unlicensed or

 

 8  unregistered.

 

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

 

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

 

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

 

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

 

13  both.

 

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

 

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

 

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

 

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

 

18  for not more than 1 year, or both.

 

19        (6) Notwithstanding subsections (4) and (5), a person not

 

20  licensed under article 14 as a home inspector or under article 24

 

21  as a residential builder or a residential maintenance and

 

22  alteration contractor who violates subsection (1) or (2) is

 

23  guilty as follows:

 

24        (a) In the case of a first offense, a misdemeanor punishable

 

25  by a fine of not less than $5,000.00 or more than $25,000.00 , or

 

26  imprisonment for not more than 1 year, or both.

 

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

 

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

 

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

 

 3  or both.

 

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

 

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

 

 6  or more than $25,000.00 , or imprisonment for not more than 4

 

 7  years, or both.

 

 8        (7) Notwithstanding subsections (4) and (5), a person not

 

 9  licensed under article 20 as an architect, professional engineer,

 

10  or professional land surveyor who violates subsection (1) or (2)

 

11  is guilty as follows:

 

12        (a) In the case of a first offense, a misdemeanor punishable

 

13  by a fine of not less than $5,000.00 or more than $25,000.00 or

 

14  imprisonment for not more than 93 days, or both.

 

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

 

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

 

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

 

18  both.

 

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

 

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

 

21  or more than $25,000.00 or imprisonment for not more than 4

 

22  years, or both.

 

23        (8) Any violation of this act shall include a requirement

 

24  that restitution be made, based upon proofs submitted to and

 

25  findings made by the trier of fact as provided by law.

 

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

 

27  remedy, an affected person may maintain injunctive action to

 

 1  restrain or prevent a person from violating subsection (1) or

 

 2  (2). If successful in obtaining injunctive relief, the affected

 

 3  person shall be entitled to actual costs and attorney fees.

 

 4        (10) This act does not apply to a person engaging in or

 

 5  practicing the following:

 

 6        (a) Interior design.

 

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

 

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

 

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

 

10  residence building by a person exempted from the requirements of

 

11  section 2012.

 

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

 

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

 

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

 

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

 

16  338.988.

 

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

 

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

 

19  338.892.

 

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

 

21  person directly affected by the actions of a person suspected of

 

22  violating subsection (1) or (2) and includes, but is not limited

 

23  to, a licensee or registrant, a board established pursuant to

 

24  this act, the department, a person who has utilized the services

 

25  of the person engaging in or attempting to engage in an

 

26  occupation regulated under this act or using a title designated

 

27  by this act without being licensed or registered by the

 

 1  department, or a private association composed primarily of

 

 2  members of the occupation in which the person is engaging in or

 

 3  attempting to engage in or in which the person is using a title

 

 4  designated under this act without being registered or licensed by

 

 5  the department.

 

 6        (12) An investigation may be conducted under article 5 to

 

 7  enforce this section. A person who violates this section shall be

 

 8  subject to this section and sections 506, 602, and 606.

 

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

 

10  prosecutor may utilize forfeiture as a remedy in the manner

 

11  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 not bar the use

 

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

 

15  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 subsection (4), (5),

 

23  or (6), a court entering the conviction shall notify, by mail,

 

24  facsimile transmission, or electronic mail, the bureau of

 

25  commercial services at the department.

 

26                            ARTICLE 14

 

27        Sec. 1401. As used in this article:

 

 1        (a) "Client" means the person on whose behalf a home

 

 2  inspector is acting, which may include the seller of a residence

 

 3  under certain circumstances.

 

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

 

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

 

 6  flow of electricity beginning with the main panel and extending

 

 7  to the subpanels and including branch circuits, and directly

 

 8  wired electrical and lighting fixtures.

 

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

 

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

 

11        (i) Slab.

 

12        (ii) Crawl space.

 

13        (iii) Basement.

 

14        (iv) Piers.

 

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

 

16  or combined system used to distribute or radiate heat or cool air

 

17  throughout all or part of a residence.

 

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

 

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

 

20  disclose the functional condition of the major systems in a

 

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

 

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

 

23  following:

 

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

 

25  construction laws, codes, or regulations.

 

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

 

27  safety laws or regulations.

 

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

 

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

 

 3  or vermin.

 

 4        (f) "Home inspector" means a person engaged in, or offering

 

 5  to engage in, the business of providing home inspection services

 

 6  but does not include any of the following:

 

 7        (i) A person acting on behalf of a local, state, or federal

 

 8  governmental unit or agency conducting an inspection or

 

 9  investigation concerning compliance with either or both of the

 

10  following:

 

11        (A) Health or safety laws or regulations.

 

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

 

13        (ii) A person licensed, registered, or certified under 1 or

 

14  more of the following while conducting an inspection that is

 

15  reasonably related to a task or prospective task within the scope

 

16  of licensure, registration, or certification:

 

17        (A) Article 20.

 

18        (B) Article 24.

 

19        (C) Article 25.

 

20        (D) Article 26.

 

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

 

22  338.3569.

 

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

 

24  338.881 to 338.892.

 

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

 

26  338.971 to 338.988.

 

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

 

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

 

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

 

 3  likelihood of a major system becoming nonoperational.

 

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

 

 5        (i) Electrical system.

 

 6        (ii) Heating and air conditioning system.

 

 7        (iii) Plumbing system.

 

 8        (iv) Structure and foundation.

 

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

 

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

 

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

 

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

 

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

 

14  writing in the contract for home inspection services.

 

15        (j) "Residence" means a building used primarily for family

 

16  living quarters and designed for occupancy of not more than 4

 

17  families in separate dwelling units. Residence does not include

 

18  any building newly constructed or not previously occupied as a

 

19  dwelling unit.

 

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

 

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

 

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

 

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

 

24        Sec. 1403. (1) Beginning the effective date of this article,

 

25  an individual shall not provide, or offer to provide, home

 

26  inspection services unless licensed under this article or unless

 

27  the individual or services are exempted from licensure under this

 

 1  article as described in section 1401(f)(i) or (ii). An individual

 

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

 

 3  title that connotes licensure under this article unless licensed

 

 4  under this article. A person who violates this section is subject

 

 5  to the penalties of article 6.

 

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

 

 7  department shall license an individual filing a completed

 

 8  application and paying the appropriate application and license

 

 9  fee and who meets all of the following:

 

10        (a) Training and education requirements consisting of at

 

11  least 60 credit hours of education or equivalent training as

 

12  determined appropriate by the department.

 

13        (b) Participation in not fewer than 200 home inspections

 

14  conducted under the authority and direction of a home inspector

 

15  licensed under this article, as evidenced by a affidavit of the

 

16  licensee.

 

17        (c) The passage of an examination acceptable to the

 

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

 

19  the national home inspection examination developed by the

 

20  examination board of professional home inspectors, as it exists

 

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

 

22  acceptable examination. Any other examination utilizing

 

23  psychometric standards and having substantially the same

 

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

 

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

 

26  The director, in consultation with the board, may adopt any

 

27  updates or alternatives to the examination described in this

 

 1  subdivision by the promulgation of a rule.

 

 2        (d) Is at least 18 years of age and not having been

 

 3  convicted of any felony.

 

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

 

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

 

 6  department shall issue a license to an individual who applies and

 

 7  submits the appropriate license and application fees and

 

 8  documents, in a manner acceptable to the department, at least 3

 

 9  years of experience in providing home inspection services and the

 

10  conduct of or the participation in at least 200 home inspections,

 

11  both occurring during the preceding 5 calendar years. An

 

12  individual meeting the conditions described in this subsection is

 

13  not required to meet the requirements of subsection (2).

 

14        (4) The department shall license an individual as a home

 

15  inspector if the individual is licensed or otherwise regulated in

 

16  another state that has substantially the same standards for

 

17  licensure as this state, as determined by the department, and

 

18  that meets all other relevant requirements in this state.

 

19        Sec. 1404. (1) Beginning the effective date of this article,

 

20  an individual providing or offering to provide home inspection

 

21  services shall comply with the requirements of this section and

 

22  section 1405.

 

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

 

24  inspection services that is not in conformance with this article

 

25  is subject to an action for damages brought by the client in a

 

26  court of competent jurisdiction or penalties and sanctions

 

27  contained in articles 5 and 6, or both.

 

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

 

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

 

 3  services only to the extent that those major systems are readily

 

 4  accessible and visible to the home inspector. A home inspector

 

 5  shall indicate in writing any major system, or any part of a

 

 6  major system, that was not able to be inspected and the reasons

 

 7  for the inability to inspect.

 

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

 

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

 

10  interest in the residence being inspected.

 

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

 

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

 

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

 

14  ownership interest in the residence being inspected.

 

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

 

16  the written home inspection report is conveyed to the client at

 

17  least both of the following:

 

18        (a) The scope of the home inspection services with a

 

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

 

20  type of major deficiencies the home inspection is designed to

 

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

 

22  contract of home inspection services.

 

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

 

24  particular residence shall not repair or offer to repair a

 

25  residence that was the subject of home inspection services

 

26  provided by that home inspector.

 

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

 

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

 

 2  client or the client's agent, and in conformance with subsection

 

 3  (4). A copy of the executed contract for home inspection services

 

 4  shall be provided to the client at the time of its execution.

 

 5        (2) All terms of the contract for home inspection services

 

 6  shall be contained in the written contract except that conditions

 

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

 

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

 

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

 

10  modifications of the terms of the contract for home inspection

 

11  services shall be reduced to writing.

 

12        (3) Unless otherwise indicated in writing, the purchaser of

 

13  a residence being inspected is considered the client in the case

 

14  of a home inspection conducted as part of a sale of the

 

15  residence.

 

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

 

17  inspection services:

 

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

 

19  provided.

 

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

 

21  absence of any warranties as to the adequacy of future

 

22  performance of a major system and the fact that the home

 

23  inspection is considered a valid assessment of the condition of

 

24  the residence only as of the date the home inspection was

 

25  conducted.

 

26        (c) Any exclusion of defects not reasonably apparent by

 

27  visual inspection.

 

 1        (d) Any exclusion of any major system not operable at the

 

 2  time of the conduct of the home inspection.

 

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

 

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

 

 5  inspector shall provide to the client a written home inspection

 

 6  report containing the results of the home inspection. The home

 

 7  inspection report shall include a list of the major systems

 

 8  inspected and any major systems not inspected. The home inspector

 

 9  shall list in the report any conditions affecting or limiting the

 

10  ability of the home inspector to provide home inspection services

 

11  pursuant to the contract.

 

12        (6) The home inspection report shall include the following

 

13  statements:

 

14        (a) That defects not reasonably apparent by visual

 

15  inspection are excluded.

 

16        (b) That a major system not operable at the time of the

 

17  conduct of the home inspection is excluded.

 

18        (7) The home inspector shall indicate in the written home

 

19  inspection report the fact that the home inspection is considered

 

20  a valid assessment of the condition of the residence only as of

 

21  the date the home inspection was conducted.

 

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

 

23  home inspection services and the written home inspection report

 

24  for at least 3 years after the date of the report.

 

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

 

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

 

27  arbitration shall be conducted in compliance with the rules of

 

 1  the American arbitration association.

 

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

 

 3  Communications between a home inspector and client, including the

 

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

 

 5  intentionally or willfully interfere in the home inspector-client

 

 6  relationship or any communications arising from the home

 

 7  inspector-client relationship.

 

 8        (11) Any administrative or civil complaint filed by the

 

 9  client or the department against the home inspector shall be

 

10  filed not later than 3 years from the date of the inspection.

 

11        Sec. 1406. (1) A client suffering damages due to a violation

 

12  of this article may bring an action for damages in a court of

 

13  competent jurisdiction.

 

14        (2) A person violating this article is subject to criminal

 

15  penalties and administrative sanctions, if applicable, under

 

16  article 6.

 

17        (3) The remedies under this article are cumulative and the

 

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

 

19  by law.

 

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

 

21  for the following:

 

22        (a) A demonstration of continuing professional competence

 

23  for renewal of a license.

 

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 continuing competency, including

 

 5  comprehensive testing, participation in mentoring programs,

 

 6  research, participation in code hearings conducted by the

 

 7  international code council, and publication of articles in a

 

 8  trade journal or regional magazine as an expert in the field. The

 

 9  alternate forms shall be designed to maintain and improve the

 

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

 

11  shall prescribe proofs that are necessary to demonstrate that the

 

12  licensee has fulfilled the requirements of continuing competency.

 

13        Sec. 1408. Fees for a person licensed or seeking licensure

 

14  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 12

 

20  months after the date it is enacted into law.