SB458: SB458 "Home Inspector Licensing Act of Georgia"; enact

26 LC 62 0484S 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, relating1 to real estate brokers and salespersons and residential and commercial general contractors,2 respectively, so as to require certain commissioners of the Georgia Real Estate Commission3 to be licensees in good standing; to prohibit certain real estate practices; to exempt certain4 operations; to provide for certain consent cease and desist orders; to provide for licensure of5 home inspectors; to provide for reciprocity of licensure; to pr ovide for licensure of6 companies performing home inspections; to provide for minimum requirements to apply for7 licensure; to provide for requirements to maintain license; to require home inspectors to8 maintain or be covered by certain insurance; to provide for standards of practice and unfair9 trade practices; to provide for exceptions; to provide for defi nitions; to provide for a short10 title; to provide for a legislative purpose; to provide for related matters; to repeal conflicting11 laws; and for other purposes.12 BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:13 SECTION 1.14 This Act shall be known and may be cited as the "Home Inspector Licensing Act of15 Georgia."16 S. B. 458 (SUB) - 1 - 26 LC 62 0484S SECTION 2.17 The purpose of this Act is to regulate the practice of home ins pection within this state by18 establishing minimum qualifications, education, experience, and unfair trade practices for19 home inspectors, thereby protecting consumers from unqualified or unethical practitioners.20 SECTION 3.21 Chapter 40 of Title 43 of the Official Code of Georgia Annotate d, relating to real estate22 brokers and salespersons, is amended by adding a new paragraph to Code Section 43-40-1,23 relating to definitions, to read as follows:24 "(12) 'Wholesaler' means any person not licensed under this chapter who enters, or offers25 to enter, an assignable contract for real property and markets the property for sale or26 reassignment without written authorization from the property owner."27 SECTION 4.28 Said chapter is further amended by revising subsection (a) of Code Section 43-40-2, relating29 to creation of commission, members, meetings, recusal for confl ict of interest, removal,30 compensation, annual report, and budget unit, as follows:31 "(a) There is created the Georgia Real Estate Commission, which shall be composed of six32 members, each of whom shall be appointed by the Governor and confirmed by the Senate33 for a term of five years. Any such appointments made when the Senate is not in session34 shall be effective until acted upon by the Senate. Five of the members shall be licensees35 in good standing who shall have been residents of this state and actively engaged licensed36 in the real estate business for five years. The sixth member of the commission shall have37 no connection with the real estate industry whatsoever but shall have a recognized interest38 in consumer affairs and in consumer protection concerns."39 S. B. 458 (SUB) - 2 - 26 LC 62 0484S SECTION 5.40 Said chapter is further amended by revising paragraphs (12), (35), and (36) of and adding a41 new paragraph to subsection (b) of Code Section 43-40-25, relat ing to violations by42 licensees, schools, and instructors, sanctions, and unfair trade practices, to read as follows:43 "(12) Offering real estate for sale or lease without the knowle dge and consent of the44 owner or the owner's authorized agent or on terms other than th ose authorized by the45 owner or the owner's authorized agent, or offering real estate for sale or lease on behalf46 of a wholesaler;"47 "(35) Inducing any person to alter, modify, or change another l icensee's fee or48 commission for real estate brokerage services without that lice nsee's prior written49 consent; or50 (36) Failing to obtain a person's written agreement to refer t hat person to another51 licensed broker for brokerage or relocation services and to inf orm such person being52 referred whether or not the licensee will receive a valuable co nsideration for such53 referral; or54 (37) Indicating to a client or to another broker in direct com munication, in a multiple55 listing service, any promotional ma terial, or in any marketing of real property that an56 offer to buy or sell real estate will not be presented to the p urchaser and to the seller57 based on a compensation request in that offer, or will be marketed in a manner that places58 the interest of the broker over that of the client."59 SECTION 6.60 Said chapter is further amended by revising paragraphs (1), (13), and (14) of and adding a61 new paragraph to Code Section 43-40-29, relating to exceptions to operation of chapter, to62 read as follows:63 "(1) Any person who, as owner, as the spouse of an owner, as the family member of an64 owner, as that term is defined in rules promulgated by the Commission, as general partner65 S. B. 458 (SUB) - 3 - 26 LC 62 0484S of a limited partnership as a n officer of a limited liability company, or as lessor, or as66 prospective purchaser or their regular employees, performs any act with reference to67 property owned, leased, or to be acquired by such owner, limited partnership, lessor, or68 prospective purchaser where such acts are performed in the regu lar course of, or as69 incident to, the management of such property and the investment therein or any person70 who manages residential apartment complexes under a contract approved by any federal71 agency for an organization which is exempt from federal taxes p ursuant to72 Section 501(c)(3) of the Internal Revenue Code, as defined in C ode Section 48-1-2,73 provided that such person was engaged in managing such property under such type74 contract prior to January 1, 1989;"75 "(13) Any person who performs only physical maintenance on a property; or76 (14) A licensed certified public accountant acting solely as an incident to the practice of77 public accounting; or78 (15) Any prospective purchaser or their regular employee who p erforms any act with79 reference to property to be acquired by such prospective purchaser and who:80 (A) Is not a wholesaler; or81 (B) Does not receive a separate fee for the performance of such act."82 SECTION 7.83 Said chapter is further amended by revising subsection (c) of Code Section 43-40-30, relating84 to acting without a license, cease and desist order, judicial review, and effect of Code section85 on other remedies, as follows:86 "(c) Notwithstanding any other provisions of law to the contrary, the:87 (1) The commissioner may issue a consent cease and desist orde r to any person for88 whom the commission has opened an investigation for engaging in the practice of a real89 estate broker without a license. Such consent cease and desist order shall be final upon90 consummation of the order; and91 S. B. 458 (SUB) - 4 - 26 LC 62 0484S (2) The commission may issue a cease and desist order prohibiting any person from92 violating the provisions of this chapter by engaging in the practice of a real estate broker93 without a license. Such cease and desist order shall be final ten days after it is issued94 unless the person to whom such order is issued requests a heari ng before the95 commission."96 SECTION 8.97 Chapter 41 of Title 43 of the Official Code of Georgia Annotated, relating to residential and98 commercial general contractors, is amended by designating Code Sections 43-41-1 through99 43-41-18 as Article 1.100 SECTION 9.101 Said chapter is further amended by adding a new article to read as follows:102 "ARTICLE 2103 43-41-20.104 As used in this article, the term:105 (1) 'Ancillary services' means specialized inspections that a home inspector may offer106 but are not considered part of a general home inspection unless specifically advertised or107 performed outside the scope of the standards of practice.108 (2) 'Client' means the party for whom the home inspection is performed, including, but109 not limited to, a prospective purchaser or seller of a home.110 (3) 'Home inspection' means a limited, noninvasive examination of the condition of a111 home by a home inspector.112 (4) 'Home inspector' means any person, except an employee of a county, municipality,113 or political subdivision while engaged in the performance of th e duties of his or her114 S. B. 458 (SUB) - 5 - 26 LC 62 0484S employment, who, for consideration, inspects and reports on the condition of any home115 or single-family dwelling or the grounds, roof, exterior surfac e, garage or carport,116 structure, attic, basement or crawl space, electrical system, h eating system,117 air-conditioning system, plumbing, on-site sewerage disposal, pool or hot tub, fireplace,118 kitchen, appliances, or any combination thereof for a prospective purchaser or seller.119 (5) 'Standards of practice' means the minimum standards for ho me inspections120 established by the board.121 (6) 'Unfair trade practices' means practices that violate the code of conduct that governs122 home inspectors as established by the board.123 43-41-21.124 (a) Home inspectors shall be licensed by the board beginning January 1, 2028.125 (b) The residential contractor division shall have jurisdictio n and authority over home126 inspectors.127 (c) The board shall provide by regulation for reciprocity with other states or territories of128 the United States in the licensing of home inspectors, provided that such other states have129 requirements substantially equal to the requirements in force in this state for registration,130 licensure, or certification, and that any such home inspector h olding a current and valid131 license, certificate, or registration from another state or territory seeking licensure by way132 of reciprocity shall demonstrate that such applicant meets the qualifications, requirements,133 and criteria set forth in this article and that such applicant is otherwise in compliance with134 all requirements of this state for the transaction of such business; provided, further, that a135 similar privilege is offered to residents of this state by such other state or territory.136 43-41-22.137 (a) An applicant for a home inspector license shall:138 (1) Be at least 18 years of age;139 S. B. 458 (SUB) - 6 - 26 LC 62 0484S (2) Possess a high school diploma, or its equivalent, or ten y ears of experience in the140 home inspection or residential contractor industry;141 (3) Pass a criminal background check; and142 (4) Submit a complete application with all required documentation and fees.143 (b) Applicants shall pass a psychometrically sound examination administered or approved144 by the board.145 (c) Such licenses shall be renewable every four years by birth month of the licensee.146 43-41-23.147 Applicants and home inspectors shall maintain or be covered by:148 (1) A minimum of $250,000.00 per occurrence and $500,000.00 ag gregate general149 liability insurance for third-party claims for bodily injury or property damage; and150 (2) A minimum of $250,000.00 per occurrence and $500,000.00 ag gregate errors and151 omissions insurance for claims of professional mistakes, oversights, or negligence. Such152 errors and omissions insurance shall include coverage for liability arising from referrals.153 43-41-24.154 To maintain licensure, home inspectors shall maintain competency in the current standards155 of practice and residential building codes.156 43-41-25.157 (a) Companies that perform home inspections shall be licensed by the board beginning158 January 1, 2028.159 (b) To be licensed by the board, companies that perform home inspections shall:160 (1) Register with the board;161 (2) Provide the board a list of all licensed home inspectors e mployed or contracted by162 the company;163 S. B. 458 (SUB) - 7 - 26 LC 62 0484S (3) Ensure all home inspections are performed by individuals holding active licenses;164 (4) Maintain records of all inspections performed, including, but not limited to, home165 inspection reports and client information; and166 (5) Be subject to audit and disciplinary action by the board.167 43-41-26.168 (a) The board shall adopt and periodically update comprehensive standards of practice and169 unfair trade practices that all licensed home inspectors shall comply with. Such standards170 shall define the scope of a home inspection, include what is an d is not required to be171 inspected, and establish a baseline for the protection of public interest.172 (b) Licensed home inspectors shall provide clients with a written disclosure of the current173 standards of practice and unfair trade practices, a written dis closure of any ancillary174 services to be performed, and a sample home inspection report p rior to commencing an175 inspection.176 43-41-27.177 (a) The board shall open an investigation when there is:178 (1) A sworn written complaint from a client who hired a home inspector or company that179 performs home inspections;180 (2) A referral from another licensing entity; or181 (3) Probable cause established in the course of another investigation, or that is available182 in the public domain, that the home inspector or company that performs home inspections183 violated the standards of practice or engaged in unfair trade practices.184 (b) If an investigation finds a violation of this article, the board may:185 (1) Issue cease and desist orders to home inspectors or compan ies performing home186 inspections;187 (2) Impose fines;188 S. B. 458 (SUB) - 8 - 26 LC 62 0484S (3) Suspend or revoke licenses;189 (4) Require additional education or training;190 (5) File a criminal complaint with the Attorney General; or191 (6) Any combination thereof.192 (c) Before imposing penalties for violations of this article, such violations shall be heard193 and determined by the residential contractor division in accordance with the provisions of194 Chapter 13 of Title 50, the 'Georgia Administrative Procedure Act.'195 43-41-28.196 The board shall establish reasonable fees for applications, examinations, licenses, license197 renewals, and other administrative services. All such fees collected shall be used to fund198 the operations and enforcement activities of the board.199 43-41-29.200 This article shall not apply to:201 (1) A real estate appraiser licensed pursuant to Chapter 39A of this title;202 (2) A real estate broker or salesperson licensed pursuant to Chapter 40 of this title;203 (3) A residential contractor licensed pursuant to Article 1 of this chapter; or204 (4) Any officer or employee of a government agency conducting official duties.205 43-41-30.206 Beginning July 1, 2027, any person working as a home inspector on or before such date207 may apply to the board for licensure without meeting the initial education requirements if208 they pass the National Home Inspector Examination or meet an eq uivalent209 psychometrically sound competency measure as approved by the board."210 S. B. 458 (SUB) - 9 - 26 LC 62 0484S SECTION 10.211 All laws and parts of laws in conflict with this Act are repealed.212 S. B. 458 (SUB) - 10 -