BILL REQ. #:  H-4428.1 

Read first time 01/23/08.   Referred to Committee on Commerce & Labor.

     AN ACT Relating to the licensing of home inspectors; amending RCW 15.58.205; adding a new chapter to Title 18 RCW; and prescribing penalties.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   DEFINITIONS. The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Board" means the home inspector licensing board.
     (2) "Classroom instruction or classroom education" means training in observing and identifying defects in structural components, foundations, roof coverings, insulation and ventilation, exterior and interior components; wood destroying organisms; and plumbing, heating, cooling, and electrical systems. "Classroom instruction or classroom education" includes online or video training.
     (3) "Client" means an individual or individuals who contract for a home inspection.
     (4) "Component" means a readily accessible and observable aspect of a system, such as a floor or wall, but not individual pieces such as boards or nails where many pieces make up a system.
     (5) "Department" means the department of licensing.
     (6) "Director" means the director of the department of licensing.
     (7) "Home inspection" means a visual analysis for the purposes of providing a professional opinion of the condition of a building and its attached carports and attached garages, any reasonably accessible installed components and the operation of the building systems, including the controls normally operated by the owner, for the following components of a residential building of four units or less: Heating system, electrical system, cooling system, plumbing system, structural components, foundation, roof covering, exterior and interior components, and site aspects as they affect the building.
     (8) "Home inspection report" means a written report prepared and issued after a home inspection.
     (9) "Home inspector" means any person licensed as a home inspector and who engages in the business of performing home inspections and writing home inspection reports.
     (10) "Readily or reasonably accessible" means areas typically and routinely visible by normal access.
     (11) "Residential buildings" includes newly built or previously owned homes, condominium units, townhomes, or manufactured homes.

NEW SECTION.  Sec. 2   HOME INSPECTION REPORTS. (1) A home inspector shall include the following information in a home inspection report:
     (a) Those systems and components inspected which, in the professional opinion of the inspector, are significantly deficient or near the end of its service life;
     (b) A reason why, if not self-evident, the system or component is significantly deficient or near the end of its service life;
     (c) Whether or not there is damage from wood destroying organisms or conducive conditions leading to the development or establishment of the organism; and
     (d) Any systems and components designated for inspection in the standards of practice developed by the board.
     (2) A licensed home inspector shall provide a written report of the home inspection to each person for whom the inspector performs a home inspection within seven calendar days from the date of the inspection.
     (3) A licensed home inspector shall not, from the time of the inspection until one year from the date of the report, perform any work other than home inspection-related consultation on the home upon which he or she has performed a home inspection.

NEW SECTION.  Sec. 3   GENERAL EXCLUSIONS FROM A HOME INSPECTION. (1) The home inspector is not required to determine the following:
     (a) The condition of systems or components that are not readily accessible;
     (b) The remaining life of any system or component;
     (c) The strength, adequacy, effectiveness, or efficiency of any system or component;
     (d) The cause of any condition or deficiency;
     (e) The methods, materials, or costs of corrections;
     (f) Future conditions including, but not limited to, failure of systems and components;
     (g) The suitability of the property for any specialized use;
     (h) Compliance with regulatory requirements;
     (i) The market value of the property or its marketability; and
     (j) The presence of environmental hazards including, but not limited to, toxins, carcinogens, noise, and contaminants in soil, water, and air.
     (2) Home inspectors are not required to enter the following:
     (a) Any area that will likely be dangerous to the inspector or other persons or damage the property or its systems or components; or
     (b) The underfloor crawl spaces or attics that are not readily accessible; however, substructure crawl spaces must be inspected when accessible.

NEW SECTION.  Sec. 4   THIRD-PARTY EXCLUSIONS. The home inspection and report are performed and prepared for the sole, confidential, and exclusive use and possession of the client and are nontransferable. The inspector shall hold no responsibility for use or misinterpretation by third parties.

NEW SECTION.  Sec. 5   LICENSURE. Beginning September 1, 2009, a person shall not engage in or conduct, or advertise or hold himself or herself out as engaging in or conducting, the business of or acting in the capacity of a home inspector within this state without first obtaining a license as provided in this chapter.

NEW SECTION.  Sec. 6   QUALIFICATIONS FOR LICENSURE. In order to become licensed as a home inspector, an applicant must submit the following to the department:
     (1) An application on a form developed by the department;
     (2) The fee in an amount set by the department and approved by the board;
     (3) Identification proving that the applicant is at least eighteen years of age;
     (4) Proof that the applicant possesses at least a high school diploma or its equivalent;
     (5) Proof of a minimum of one hundred twenty hours of classroom instruction as approved by the board;
     (6) Proof of having completed a minimum of forty hours of supervised field training as approved by the board;
     (7) Evidence of successful passage of the written exam as outlined in section 8 of this act; and
     (8) Proof of having passed the Washington state department of agriculture's pest inspection exam.

NEW SECTION.  Sec. 7   APPLICATION FOR LICENSING. An application for licensing must be filed with the director and must contain statements made under oath demonstrating the applicant's qualifications. The director with the board's approval may require any information and documentation that reasonably relates to the need to determine whether the applicant meets the criteria for licensing. The application fee for initial licensing shall be determined by the director as provided in RCW 43.24.086. The application, together with the fee, must be submitted to the department prior to the application deadline established by the director. If the director finds the applicant ineligible for licensing, the director shall retain the application fee.

NEW SECTION.  Sec. 8   WRITTEN EXAMS. (1) Applicants must provide proof of successfully passing a nationally recognized, psychometrically evaluated, home inspectors' exam. The examination shall be designed to test competence in home inspection practice, as determined by recognized role definition methodology and developed and administered in a manner consistent with the American educational research association's standards for educational and psychological testing; the equal employment opportunity commission's uniform guidelines for employee selection procedures; the civil rights act of 1991; the Americans with disabilities act of 1990; and similar applicable standards.
     (2) A separate examination module will be developed to test applicants on the specific Washington state laws, adopted standard of practice, and code of ethics. Examinations of applicants for this exam module must be held at times and places as determined by the board with the director's approval. A candidate failing this examination may apply for reexamination. Subsequent examinations must be granted upon payment of a fee.
     (3) To qualify to take the Washington standards exam, an applicant must:
     (a) Provide the board and the department with acceptable documentation that the applicant has passed a board-approved home inspection course of at least one hundred twenty hours of classroom education;
     (b) Provide the board and the department with acceptable documentation that the applicant has completed a minimum of forty hours of supervised field training as approved by the board;
     (c) Provide the board and the department with acceptable documentation that the applicant has successfully passed a nationally recognized, psychometrically evaluated, home inspectors' exam.

NEW SECTION.  Sec. 9   GRANDFATHERING. At the time that licensing takes effect, any person who has been actively engaged in the business of conducting home inspections and has been licensed as a structural pest inspector by the state department of agriculture for at least two years and who has conducted at least one hundred complete fee-paid home inspections may apply to the board for initial licensure without meeting the examination or instruction requirements of this chapter.

NEW SECTION.  Sec. 10   LICENSE LENGTH AND RENEWAL. (1) Licenses are issued for a term of two years and expire on the last day of the month the license was issued. Licenses must be in a form prescribed by the board and approved by the director. Licenses that are not renewed are considered to be expired and any home inspection activity which would require a license to perform which occurs after the expiration of the license is a violation of this chapter.
     (2) Any person who receives an initial license under section 9 of this act must, upon renewal of his or her license, provide the board and the department with acceptable documentation that the applicant has successfully passed a nationally recognized, psychometrically evaluated, home inspectors' exam, and the Washington standards exam.
     (3) Any licensee who fails to timely renew his or her license may renew his or her license only upon payment of renewal and late fees as set by the director. A licensee who fails to renew his or her license within six months from the date it expires is considered to have forfeited his or her rights to renew the license and can only be licensed by filing an application as an initial applicant and meeting all the requirements of an initial applicant.

NEW SECTION.  Sec. 11   ADVERTISING. The term "licensed home inspector" along with the license number of the inspector must appear on all advertising, correspondence, and documents incidental to a home inspection.

NEW SECTION.  Sec. 12   CONTINUING EDUCATION REQUIREMENTS. (1) As a condition of renewal, a licensed home inspector shall present satisfactory evidence to the board of having completed the continuing education requirements provided for in this section.
     (2) Each applicant for license renewal shall complete at least thirty hours of instruction every two years in courses approved by the board.

NEW SECTION.  Sec. 13   RECIPROCITY. The director may, upon application and payment of a fee determined by the director as provided in RCW 43.24.086, issue a license and certificate without examination as a home inspector issued by the proper authority of any state, territory, or possession of the United States if the applicant's qualifications as evaluated by the board meet the requirements of this chapter and the rules adopted by the director.

NEW SECTION.  Sec. 14   EXEMPTIONS FROM HOME INSPECTOR LICENSING. The following persons shall be exempt from the licensing requirements outlined in this chapter:
     (1) Persons licensed by the state as professional engineers when acting within the scope of their license;
     (2) Persons licensed by the state as architects when acting within the scope of their license;
     (3) Persons licensed by the state or any political subdivision as electricians when acting within the scope of their license;
     (4) Persons licensed by the state or any political subdivision as plumbers when acting within the scope of their license;
     (5) Persons licensed by the state or any political subdivision as heating and air conditioning technicians when acting within the scope of their license;
     (6) Persons licensed by the state as real estate brokers or real estate sales persons when acting within the scope of their license;
     (7) Persons licensed by the state as real estate appraisers, certified general appraisers, or residential real estate appraisers when acting within the scope of their license;
     (8) Persons licensed by the state as pest control operators or structural pest inspectors when acting within the scope of their license;
     (9) Persons regulated by the state as insurance adjusters when acting within the scope of their profession;
     (10) Persons who are employed as code enforcement officials by the state or any political subdivision when acting within the scope of their employment by such governmental entity;
     (11) Persons licensed by the state or any political subdivision as contractors when acting within the scope of their license;
     (12) Persons who perform warranty evaluations of components, systems, or appliances within resale residential buildings for the purpose of issuance of a home warranty agreement, provided that the warranty evaluation report includes a statement that the warranty evaluation performed is not a home inspection and does not meet the standards of a home inspection under Washington law. No home warranty company shall refer to a warranty evaluation as a home inspection in any written materials provided by the home warranty company.

NEW SECTION.  Sec. 15   EXEMPTION FROM STRUCTURAL PEST INSPECTOR LICENSING. Any person licensed by the Washington state department of licensing as a home inspector under the conditions outlined in this chapter shall be exempt from the license requirements of RCW 15.58.205.

NEW SECTION.  Sec. 16   HOME INSPECTOR LICENSING BOARD. (1) The state home inspector licensing board is created. The board consists of seven members appointed by the director, who shall advise the director concerning the administration of this chapter. Of the appointments to this board, six shall be actively engaged as home inspectors immediately prior to their appointment to the board, and one shall be a member of the general public with no family or business connection with the home inspector business or practice.
     (2) A home inspector must have the following qualifications to be appointed to the board:
     (a) Engaged as a home inspector in the state of Washington for five years;
     (b) Licensed as a home inspector under this chapter; and
     (c) Performed one thousand home inspections in the state of Washington.
     (3) Members of the board are appointed for three-year terms. Terms must be staggered so that no more than two appointments are scheduled to be made in any calendar year. Members hold office until the expiration of the terms for which they were appointed. The director may remove a board member for just cause. The director may appoint a new member to fill a vacancy on the board for the remainder of the unexpired term. All board members are limited to two consecutive terms.
     (4) Each board member is entitled to compensation for each day spent conducting official business and to reimbursement for travel expenses in accordance with RCW 43.03.240, 43.03.050, and 43.03.060.
     (5) The board will be established prior to the licensure start date; therefore, the director will establish the criteria for the initial appointments to the board.

NEW SECTION.  Sec. 17   DIRECTOR'S AUTHORITY. The director has the following authority:
     (1) To adopt, amend, and rescind rules approved by the board as deemed necessary to carry out the licensing requirements;
     (2) To adopt fees as provided in RCW 43.24.086;
     (3) To administer licensing examinations approved by the board and to adopt or recognize examinations prepared by other organizations as approved by the board; and
     (4) To adopt standards of professional conduct, practice, and ethics as approved by the board.

NEW SECTION.  Sec. 18   BOARD'S AUTHORITY. The board has the following authority:
     (1) To establish rules, including board organization and assignment of terms, and meeting frequency and timing, for adoption by the director;
     (2) To establish the minimum qualifications for licensing applicants as provided in this chapter;
     (3) To approve the method of administration of examinations required by the criteria outlined in this chapter or by rule as established by the director;
     (4) To approve the content of or recognition of examinations prepared by other organizations for adoption by the director;
     (5) To set the time and place of examinations with the approval of the director; and
     (6) To establish and review standards of professional conduct, practice, and ethics for adoption by the director.

NEW SECTION.  Sec. 19   HOME INSPECTORS AS CORPORATIONS PROHIBITED. A license as a home inspector may not be issued to a corporation, limited liability company, partnership, firm, or group. However, this section does not prevent a licensed home inspector from rendering home inspections for or on behalf of a corporation, limited liability company, partnership, firm, or group, when the home inspection report is performed, prepared, and signed by a licensed home inspector.

NEW SECTION.  Sec. 20   HOME INSPECTOR'S ACCOUNT. The home inspector's account is created in the custody of the state treasurer. All receipts from fines and fees collected under this chapter must be deposited into the account. Expenditures from the account may be used only to carry out the duties required for the operation and enforcement of this chapter. Only the director may authorize expenditures from the account. The account is subject to allotment procedures under chapter 43.88 RCW, but an appropriation is not necessary.

NEW SECTION.  Sec. 21   UNPROFESSIONAL CONDUCT. In addition to the unprofessional conduct described in RCW 18.235.130, the following conduct, acts, and conditions constitute unprofessional conduct:
     (1) Violating this chapter or the rules adopted under this chapter;
     (2) Not meeting the qualifications for licensing set forth by this chapter;
     (3) Failure to comply with an assurance of discontinuance entered into with the director; or
     (4) Committing any other act, or failing to act, which act or failure are customarily regarded as being contrary to the accepted professional conduct or standard generally expected of those conducting home inspections.

NEW SECTION.  Sec. 22   HEARING BEFORE THE DIRECTOR. The procedures governing adjudicative proceedings before agencies under chapter 34.05 RCW govern all hearings before the director or his or her designee. Upon a finding that a license holder or applicant has committed unprofessional conduct, the director may issue an order providing for one or any combination of the following:
     (1) Revocation of the license;
     (2) Suspension of the license for a fixed or indefinite term;
     (3) Restriction or limitation of the practice;
     (4) Issuance of a civil fine not to exceed five thousand dollars for each violation;
     (5) Requiring satisfactory completion of a specific program of remedial education or treatment;
     (6) Monitoring of the practice by a peer approved by the director;
     (7) Reprimand or censure;
     (8) Compliance with conditions of probation for a designated period of time;
     (9) Withholding of a license request;
     (10) Refund of fees billed to and collected from the consumer; or
     (11) Other corrective action.

NEW SECTION.  Sec. 23   SUSPENSION OF LICENSE. The director shall immediately suspend the license or practice permit of a person who has been certified pursuant to RCW 74.20A.320 by the department of social and health services as a person who is not in compliance with a child support order. If the person has continued to meet all other requirements for a license under this chapter during the suspension, reissuance of the license is automatic upon the board's receipt of a release issued by the department of social and health services stating that the licensee is in compliance with the child support order. The procedure in RCW 74.20A.320 is the exclusive administrative remedy for contesting the establishment of noncompliance with a child support order, and suspension of a license under this subsection, and satisfies the requirements of RCW 34.05.422.

NEW SECTION.  Sec. 24   CIVIL INFRACTIONS. The department has the authority to issue civil infractions under chapter 7.80 RCW in the following instances:
     (1) Conducting or offering to conduct a home inspection without being licensed in accordance with this chapter;
     (2) Presenting or attempting to use as his or her own the home inspector license of another;
     (3) Giving any false or forged evidence of any kind to the director or his or her authorized representative in obtaining a license;
     (4) Falsely impersonating any other licensee; or
     (5) Attempting to use an expired or revoked license.
     All fees, fines, and penalties collected or assessed by a court because of a violation of this section must be remitted to the department to be deposited into the home inspector's account created in section 20 of this act.

NEW SECTION.  Sec. 25   RELIEF BY INJUNCTION. The director is authorized to apply for relief by injunction without bond, to restrain a person from the commission of any act that is prohibited under this chapter. In such proceedings, it is not necessary to allege or prove either that an adequate remedy at law does not exist, or that substantial or irreparable damage would result from continued violation. The director, individuals acting on the director's behalf, and members of the board are immune from suit in any action, civil or criminal, based on disciplinary proceedings or other official acts performed in the course of their duties in the administration and enforcement of this chapter.

NEW SECTION.  Sec. 26   LIMIT OF LIABILITY. The home inspector shall be able to limit the home inspector's liability by mutual agreement with the client.

NEW SECTION.  Sec. 27   STATUTE OF LIMITATIONS. All actions to recover damages for any act or omission of a home inspector relating to a home inspection that the home inspector conducts must be commenced within one year after the date that the home inspection was completed.

NEW SECTION.  Sec. 28   Captions used in this chapter are not any part of the law.

NEW SECTION.  Sec. 29   Sections 1 through 28 of this act constitute a new chapter in Title 18 RCW.

Sec. 30   RCW 15.58.205 and 2003 c 212 s 5 are each amended to read as follows:
     (1) Except as provided in subsection (2) of this section, no individual may perform services as a structural pest inspector or advertise that they perform services of a structural pest inspector without obtaining a structural pest inspector license from the director. The license expires annually on a date set by rule by the director. Application for a license must be on a form prescribed by the director and must be accompanied by a fee of forty-five dollars.
     (2) The following are exempt from the application fee requirement of subsection (1) of this section when acting within the authorities of their existing licenses issued under chapter 15.58 or 17.21 RCW: Licensed pest control consultants; licensed commercial pesticide applicators and operators; licensed private-commercial applicators; and licensed demonstration and research applicators.
     (3) The following are exempt from the structural pest inspector licensing requirement: Individuals inspecting for damage caused by wood destroying organisms if the inspections are solely for the purpose of: (a) Repairing or making specific recommendations for the repair of the damage, or (b) assessing a monetary value for the structure inspected. Individuals performing wood destroying organism inspections that incorporate but are not limited to the activities described in (a) or (b) of this subsection are not exempt from the structural pest inspector licensing requirement.
     (4) Persons licensed as home inspectors under chapter 18.--- RCW (sections 1 through 28 of this act) are exempt from the structural pest inspector licensing requirement.
     (5) Persons holding a valid license to act as a structural pest inspector on July 1, 2003, are exempt from this requirement until expiration of that license.
     (((5))) (6) A structural pest inspector license is not valid for conducting a complete wood destroying organism inspection unless the inspector owns or is employed by a business with a structural pest inspection company license.