BILL REQ. #:  S-1304.1 

Read first time 01/31/2007.   Referred to Committee on Labor, Commerce, Research & Development.

     AN ACT Relating to the licensing of home inspectors; adding a new chapter to Title 18 RCW; creating new sections; 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 education" means training in observing and identifying defects in structural components, foundations, roof coverings, insulation and ventilation, exterior and interior components; wood destroying organism inspections; and plumbing, heating, cooling, and electrical systems.
     (3) "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.
     (4) "Department" means the department of licensing.
     (5) "Director" means the director of the department of licensing.
     (6) "Home inspection" means a visual analysis for the purposes of providing a professional opinion of the condition of a building and its carports and 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. "Home inspection" also means an inspection for wood destroying organisms.
     (7) "Home inspection report" means a written report prepared and issued after a home inspection. The inspector shall include the following in the report:
     (a) On 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) The home inspector's recommendations to correct or monitor the reported deficiency;
     (d) Whether or not there is damage from wood destroying organisms; and
     (e) Any systems and components designated for inspection in the standards developed by the board under section 5 of this act.
     (8) "Home inspector" means any person licensed under this chapter as a home inspector and who engages in the business of performing home inspections and writing home inspection reports.
     (9) "Readily accessible" means available for visual inspection without requiring moving of personal property, dismantling, destructible measures, or any action that likely will involve risk to persons or property.

NEW SECTION.  Sec. 2   LICENSURE REQUIRED. (1) Beginning July 1, 2008, 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.
     (2) On July 1, 2008, any person who has been actively engaged in the business of conducting home inspections for at least two years and who has conducted at least one hundred home inspections may apply to the board for initial licensure without meeting the examination or instruction requirements of this chapter.

NEW SECTION.  Sec. 3   HOME INSPECTOR LICENSING BOARD. (1) The state home inspector licensing board is created. The board consists of eight members appointed by the director, who shall advise the director concerning the administration of this chapter. Of the appointments to this board, four shall be actively engaged as home inspectors immediately prior to their appointment to the board, two shall be persons licensed as real estate agents, one shall be currently teaching in a home inspector certificate program, and one shall be a member of the general public with no family or business connection with the home inspector business or practice. Insofar as possible, the composition of the appointed home inspector members of the board shall be generally representative of the occupational distribution of home inspectors licensed under this chapter.
     (2) A home inspector must have the following qualifications to be appointed to the board:
     (a) Five years' experience actively engaged as a home inspector in the state of Washington;
     (b) Licensed as a home inspector under this chapter; and
     (c) Performed two hundred fifty home inspections in the state of Washington.
     (3) Members of the board are appointed for three-year terms. Terms must be staggered so that not 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.

NEW SECTION.  Sec. 4   DIRECTOR'S AUTHORITY. The director has the following authority in administering this chapter:
     (1) To adopt, amend, and rescind rules approved by the board as deemed necessary to carry out this chapter;
     (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;
     (4) To adopt standards of professional conduct, practice, and ethics as approved by the board; and
     (5) To enter into an assurance of discontinuance in lieu of issuing a statement of charges or conducting a hearing. The assurance must consist of a statement of the law in question and an agreement to not violate the stated provision. Violation of an assurance under this section is grounds for disciplinary action.

NEW SECTION.  Sec. 5   BOARD'S AUTHORITY. The board has the following authority in administering this chapter:
     (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 this chapter or by rule as established by the director;
     (4) To approve the adoption 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. 6   QUALIFICATIONS FOR LICENSURE. In order to become licensed as a home inspector, an applicant must meet the following requirements:
     (1) Be of good moral and ethical character as attested to by letters of reference submitted by the applicant or as otherwise determined by the board;
     (2) Possess a high school diploma or its equivalent;
     (3) Complete one hundred twenty hours of live classroom education as approved by the board;
     (4) Perform twenty parallel, on-site home inspections under the supervision of a licensed home inspector. The licensed home inspector may not charge a fee for the supervision. Copies of the final five home inspections must be submitted with the application;
     (5) Pass an examination as approved by the board; and
     (6) Be legally authorized to do business in Washington.

NEW SECTION.  Sec. 7   APPLICATION FOR LICENSING. An application for licensing must be filed with the director on a form provided by the director and must contain statements made under oath demonstrating the applicant's qualifications. The director 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. Fees for initial licensing must include the examination and issuance of a certificate. If the director finds the applicant ineligible for licensing, the director shall retain the application fee.

NEW SECTION.  Sec. 8   WRITTEN EXAMS. Examinations of applicants for licensing must be held at times and places as determined by the board with the director's approval. The scope of the examination must be directed to an applicant's ability to conduct a home inspection in a manner to ensure the safety of life, health, and property. A candidate failing an examination may apply for reexamination. Subsequent examinations must be granted upon payment of a fee.

NEW SECTION.  Sec. 9   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 2(2) of this act must, upon renewal of his or her license, pass the examination required in section 6(5) of this act.
     (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. 10   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. 11   CONTINUING EDUCATION REQUIREMENTS. (1) As a condition of renewing a license under this chapter, 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 annually complete at least twenty hours of instruction in courses approved by the board.

NEW SECTION.  Sec. 12   INSURANCE. All active practicing licensed home inspectors shall carry errors and omissions insurance to cover all activities contemplated under this chapter. In addition, all active licensees shall also carry general liability insurance to cover all activities contemplated by this chapter.

NEW SECTION.  Sec. 13   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. 14   WRITTEN REPORTS. (1) 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 five calendar days from the date of the inspections.
     (2) A licensed home inspector shall not, from the time of the inspection until the date of the act of sale on the home inspected, advertise or solicit to perform repair services in any item listed in the inspection report or any other type of service on the home upon which he or she has performed a home inspection.

NEW SECTION.  Sec. 15   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 to a person who holds a license of qualification 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. 16   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. 17   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. 18   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.
     Any of the actions under this section may be totally or partly stayed by the director. All costs associated with compliance with orders issued under this section are the obligation of the license holder or applicant.

NEW SECTION.  Sec. 19   INVESTIGATION OF COMPLAINTS. Any person may submit a written complaint to the department charging a license holder or applicant with unprofessional conduct and specifying the grounds for the charge. If the director determines that the complaint merits investigation, or if the director has reason to believe, without a formal complaint, that a license holder or applicant may have engaged in unprofessional conduct, the director may investigate to determine if there has been unprofessional conduct. A person who files a complaint under this section in good faith is immune from suit in any civil action related to the filing or contents of the complaint.

NEW SECTION.  Sec. 20   SUSPENSION OF LICENSE. The board 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. 21   CIVIL INFRACTIONS. The following acts are prohibited and any person committing any of the following acts is guilty of a class 1 civil infraction under chapter 7.80 RCW:
     (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 16 of this act.

NEW SECTION.  Sec. 22   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. 23   UNIFORM REGULATION OF BUSINESS AND PROFESSIONS ACT GOVERNS. The uniform regulation of business and professions act, chapter 18.235 RCW, governs unlicensed practice, the issuance and denial of licenses, and the discipline of licensees under this chapter.

NEW SECTION.  Sec. 24   GENERAL EXCLUSIONS. (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.

NEW SECTION.  Sec. 25   Currently, for a home inspector to conduct a pest inspection, he or she must have a structural pest inspector license issued by the state department of agriculture. It is the legislature's intent that home inspectors do conduct pest inspections as part of their overall responsibilities but that they not have to obtain dual licenses in order to do so. To accomplish this goal, the legislature intends that the structural pest inspection license program housed within the state department of agriculture be transferred to the department of licensing. Both departments are instructed to determine the best way to accomplish this transfer and report back to the legislature, with recommended legislation, no later than December 15, 2007.

NEW SECTION.  Sec. 26   Sections 1 through 24 of this act constitute a new chapter in Title 18 RCW.

NEW SECTION.  Sec. 27   Captions used in this act are not any part of the law.