The House Committee on Regulated Industries offers the following substitute to SB 458:
A BILL TO BE ENTITLED
AN ACT
To amend Chapters 40 and 41 of Title 43 of the Official Code of Georgia Annotated, relating
to real estate brokers and salespersons and residential and commercial general contractors,
respectively, so as to require certain commissioners of the Georgia Real Estate Commission
to be licensees in good standing; to prohibit certain real estate practices; to exempt certain
operations; to provide for certain consent cease and desist orders; to provide for licensure of
home inspectors; to provide for reciprocity of licensure; to provide for licensure of
companies performing home inspections; to provide for minimum requirements to apply for
licensure; to provide for requirements to maintain license; to require home inspectors to
maintain or be covered by certain insurance; to provide for standards of practice and unfair
trade practices; to provide for exceptions; to provide for definitions; to provide for a short
title; to provide for a legislative purpose; to provide for related matters; to repeal conflicting
laws; and for other purposes.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:
SECTION 1.
This Act shall be known and may be cited as the "Home Inspector Licensing Act of
Georgia."
SECTION 2.
The purpose of this Act is to regulate the practice of home inspection within this state by
establishing minimum qualifications, education, experience, and unfair trade practices for
home inspectors, thereby protecting consumers from unqualified or unethical practitioners.
SECTION 3.
Chapter 40 of Title 43 of the Official Code of Georgia Annotated, relating to real estate
brokers and salespersons, is amended by adding a new paragraph to Code Section 43-40-1,
relating to definitions, to read as follows:
<ins>"(12) 'Wholesaler' means any person not licensed under this chapter who enters, or offers
to enter, an assignable contract for real property and markets the property for sale or
reassignment without written authorization from the property owner."
</ins> SECTION 4.
Said chapter is further amended by revising subsection (a) of Code Section 43-40-2, relating
to creation of commission, members, meetings, recusal for conflict of interest, removal,
compensation, annual report, and budget unit, as follows:
"(a) There is created the Georgia Real Estate Commission, which shall be composed of six
members, each of whom shall be appointed by the Governor and confirmed by the Senate
for a term of five years. Any such appointments made when the Senate is not in session
shall be effective until acted upon by the Senate. Five of the members shall be licensees
<ins>in good standing</ins> who shall have been residents of this state and actively <del>engaged</del> <ins>licensed
</ins> in the real estate business for five years. The sixth member of the commission shall have
no connection with the real estate industry whatsoever but shall have a recognized interest
in consumer affairs and in consumer protection concerns."
SECTION 5.
Said chapter is further amended by revising paragraphs (12), (35), and (36) of and adding a
new paragraph to subsection (b) of Code Section 43-40-25, relating to violations by
licensees, schools, and instructors, sanctions, and unfair trade practices, to read as follows:
"(12) Offering real estate for sale or lease without the knowledge and consent of the
owner or the owner's authorized agent or on terms other than those authorized by the
owner or the owner's authorized agent, <ins>or offering real estate for sale or lease on behalf
of a wholesaler;"
</ins> "(35) Inducing any person to alter, modify, or change another licensee's fee or
commission for real estate brokerage services without that licensee's prior written
consent; <del>or
</del> (36) Failing to obtain a person's written agreement to refer that person to another
licensed broker for brokerage or relocation services and to inform such person being
referred whether or not the licensee will receive a valuable consideration for such
referral; <ins>or
(37) Indicating to a client or to another broker in direct communication, in a multiple
listing service, any promotional material, or in any marketing of real property that an
offer to buy or sell real estate will not be presented to the purchaser and to the seller
based on a compensation request in that offer, or will be marketed in a manner that places
the interest of the broker over that of the client."
</ins> SECTION 6.
Said chapter is further amended by revising paragraphs (1), (13), and (14) of and adding a
new paragraph to Code Section 43-40-29, relating to exceptions to operation of chapter, to
read as follows:
"(1) Any person who, as owner, as the spouse of an owner, as the family member of an
owner, as that term is defined in rules promulgated by the Commission, as general partner
of a limited partnership as an officer of a limited liability company, <ins>or</ins> as lessor, <del>or as
prospective purchaser or their regular employees,</del> performs any act with reference to
property owned, leased, or to be acquired by such owner, limited partnership, lessor, or
prospective purchaser where such acts are performed in the regular course of, or as
incident to, the management of such property and the investment therein or any person
who manages residential apartment complexes under a contract approved by any federal
agency for an organization which is exempt from federal taxes pursuant to
Section 501(c)(3) of the Internal Revenue Code, as defined in Code Section 48-1-2,
provided that such person was engaged in managing such property under such type
contract prior to January 1, 1989;"
"(13) Any person who performs only physical maintenance on a property; <del>or
</del> (14) A licensed certified public accountant acting solely as an incident to the practice of
public accounting; <ins>or
(15) Any prospective purchaser or their regular employee who performs any act with
reference to property to be acquired by such prospective purchaser and who:
(A) Is not a wholesaler; or
(B) Does not receive a separate fee for the performance of such act."
</ins> SECTION 7.
Said chapter is further amended by revising subsection (c) of Code Section 43-40-30, relating
to acting without a license, cease and desist order, judicial review, and effect of Code section
on other remedies, as follows:
"(c) Notwithstanding any other provisions of law to the contrary, <del>the:
</del> <ins>(1) The commissioner may issue a consent cease and desist order to any person for
whom the commission has opened an investigation for engaging in the practice of a real
estate broker without a license. Such consent cease and desist order shall be final upon
consummation of the order; and
</ins>
<ins>(2) The</ins> commission may issue a cease and desist order prohibiting any person from
violating the provisions of this chapter by engaging in the practice of a real estate broker
without a license. Such cease and desist order shall be final ten days after it is issued
unless the person to whom such order is issued requests a hearing before the
commission."
SECTION 8.
Chapter 41 of Title 43 of the Official Code of Georgia Annotated, relating to residential and
commercial general contractors, is amended by designating Code Sections 43-41-1 through
43-41-18 as Article 1.
SECTION 9.
Said chapter is further amended by adding a new article to read as follows:
<ins>"ARTICLE 2
43-41-20.
As used in this article, the term:
(1) 'Ancillary services' means specialized inspections that a home inspector may offer
but are not considered part of a general home inspection unless specifically advertised or
performed outside the scope of the standards of practice.
(2) 'Client' means the party for whom the home inspection is performed, including, but
not limited to, a prospective purchaser or seller of a home.
(3) 'Home inspection' means a limited, noninvasive examination of the condition of a
home by a home inspector.
(4) 'Home inspector' means any person, except an employee of a county, municipality,
or political subdivision while engaged in the performance of the duties of his or her
</ins>
<ins>employment, who, for consideration, inspects and reports on the condition of any home
or single-family dwelling or the grounds, roof, exterior surface, garage or carport,
structure, attic, basement or crawl space, electrical system, heating system,
air-conditioning system, plumbing, on-site sewerage disposal, pool or hot tub, fireplace,
kitchen, appliances, or any combination thereof for a prospective purchaser or seller.
(5) 'Standards of practice' means the minimum standards for home inspections
established by the board.
(6) 'Unfair trade practices' means practices that violate the code of conduct that governs
home inspectors as established by the board.
43-41-21.
(a) Home inspectors shall be licensed by the board beginning January 1, 2028.
(b) The residential contractor division shall have jurisdiction and authority over home
inspectors.
(c) The board shall provide by regulation for reciprocity with other states or territories of
the United States in the licensing of home inspectors, provided that such other states have
requirements substantially equal to the requirements in force in this state for registration,
licensure, or certification, and that any such home inspector holding a current and valid
license, certificate, or registration from another state or territory seeking licensure by way
of reciprocity shall demonstrate that such applicant meets the qualifications, requirements,
and criteria set forth in this article and that such applicant is otherwise in compliance with
all requirements of this state for the transaction of such business; provided, further, that a
similar privilege is offered to residents of this state by such other state or territory.
43-41-22.
(a) An applicant for a home inspector license shall:
(1) Be at least 18 years of age;
</ins>
<ins>(2) Possess a high school diploma, or its equivalent, or ten years of experience in the
home inspection or residential contractor industry;
(3) Pass a criminal background check; and
(4) Submit a complete application with all required documentation and fees.
(b) Applicants shall pass a psychometrically sound examination administered or approved
by the board.
(c) Such licenses shall be renewable every four years by birth month of the licensee.
43-41-23.
Applicants and home inspectors shall maintain or be covered by:
(1) A minimum of $250,000.00 per occurrence and $500,000.00 aggregate general
liability insurance for third-party claims for bodily injury or property damage; and
(2) A minimum of $250,000.00 per occurrence and $500,000.00 aggregate errors and
omissions insurance for claims of professional mistakes, oversights, or negligence. Such
errors and omissions insurance shall include coverage for liability arising from referrals.
43-41-24.
To maintain licensure, home inspectors shall maintain competency in the current standards
of practice and residential building codes.
43-41-25.
(a) Companies that perform home inspections shall be licensed by the board beginning
January 1, 2028.
(b) To be licensed by the board, companies that perform home inspections shall:
(1) Register with the board;
(2) Provide the board a list of all licensed home inspectors employed or contracted by
the company;
</ins>
<ins>(3) Ensure all home inspections are performed by individuals holding active licenses;
(4) Maintain records of all inspections performed, including, but not limited to, home
inspection reports and client information; and
(5) Be subject to audit and disciplinary action by the board.
43-41-26.
(a) The board shall adopt and periodically update comprehensive standards of practice and
unfair trade practices that all licensed home inspectors shall comply with. Such standards
shall define the scope of a home inspection, include what is and is not required to be
inspected, and establish a baseline for the protection of public interest.
(b) Licensed home inspectors shall provide clients with a written disclosure of the current
standards of practice and unfair trade practices, a written disclosure of any ancillary
services to be performed, and a sample home inspection report prior to commencing an
inspection.
43-41-27.
(a) The board shall open an investigation when there is:
(1) A sworn written complaint from a client who hired a home inspector or company that
performs home inspections;
(2) A referral from another licensing entity; or
(3) Probable cause established in the course of another investigation, or that is available
in the public domain, that the home inspector or company that performs home inspections
violated the standards of practice or engaged in unfair trade practices.
(b) If an investigation finds a violation of this article, the board may:
(1) Issue cease and desist orders to home inspectors or companies performing home
inspections;
(2) Impose fines;
</ins>
<ins>(3) Suspend or revoke licenses;
(4) Require additional education or training;
(5) File a criminal complaint with the Attorney General; or
(6) Any combination thereof.
(c) Before imposing penalties for violations of this article, such violations shall be heard
and determined by the residential contractor division in accordance with the provisions of
Chapter 13 of Title 50, the 'Georgia Administrative Procedure Act.'
43-41-28.
The board shall establish reasonable fees for applications, examinations, licenses, license
renewals, and other administrative services. All such fees collected shall be used to fund
the operations and enforcement activities of the board.
43-41-29.
This article shall not apply to:
(1) A real estate appraiser licensed pursuant to Chapter 39A of this title;
(2) A real estate broker or salesperson licensed pursuant to Chapter 40 of this title;
(3) A residential contractor licensed pursuant to Article 1 of this chapter; or
(4) Any officer or employee of a government agency conducting official duties.
43-41-30.
Beginning July 1, 2027, any person working as a home inspector on or before such date
may apply to the board for licensure without meeting the initial education requirements if
they pass the National Home Inspector Examination or meet an equivalent
psychometrically sound competency measure as approved by the board."
</ins>
SECTION 10.
All laws and parts of laws in conflict with this Act are repealed.