PRINTER'S NO. 2158
No. 1364 Session of 2006
INTRODUCED BY GREENLEAF, WAUGH, RAFFERTY AND PILEGGI,
OCTOBER 13, 2006
REFERRED TO CONSUMER PROTECTION AND PROFESSIONAL LICENSURE,
OCTOBER 13, 2006
AN ACT
1 Amending Title 68 (Real and Personal Property) of the
2 Pennsylvania Consolidated Statutes, further providing for
3 home inspections; establishing the Pennsylvania Board of Home
4 Inspectors; and providing for licensure of home inspectors
5 and for disciplinary proceedings by the Pennsylvania Board of
6 Home Inspectors.
7 The General Assembly of the Commonwealth of Pennsylvania
8 hereby enacts as follows:
9 Section 1. Section 7502 of Title 68 of the Pennsylvania
10 Consolidated Statutes is amended to read:
11 § 7502. Definitions and index of definitions.
12 (a) Definitions.--The following words and phrases when used
13 in this chapter shall have the meanings given to them in this
14 section unless the context clearly indicates otherwise:
15 "Applicant." An individual who applies for a license as a
16 home inspector.
17 "Board." The Pennsylvania Board of Home Inspectors
18 established under section 7504.1 (relating to Pennsylvania Board
19 of Home Inspectors).
1 "Bureau." The Bureau of Professional and Occupational
2 Affairs in the Department of State.
3 "Client." An individual who contracts with a licensee to
4 obtain a home inspection and subsequent written home inspection
5 report.
6 "Direct supervision." A home inspection performed by a home
7 inspector who is not a licensee in the presence of and under the
8 tutelage of a supervising licensee.
9 "Home inspection." A noninvasive visual examination of some
10 combination of the mechanical, electrical or plumbing systems or
11 the structural and essential components of a residential
12 dwelling designed to identify material defects in those systems
13 and components and performed for a fee in connection with or
14 preparation for a proposed or possible residential real estate
15 transfer. The term also includes any consultation regarding the
16 property that is represented to be a home inspection or that is
17 described by any confusingly similar term. The term does not
18 include an examination of a single system or component of a
19 residential dwelling such as, for example, its electrical or
20 plumbing system or its roof. The term also does not include an
21 examination that is limited to inspection for or of one or more
22 of the following: wood destroying insects, underground tanks and
23 wells, septic systems, swimming pools and spas, alarm systems,
24 air and water quality, tennis courts and playground equipment,
25 pollutants, toxic chemicals and environmental hazards.
26 "Home inspection report." A written report [on the results
27 of a home inspection.] prepared by a licensee for compensation
28 and issued after a home inspection that includes:
29 (1) A description or identification of the structure
30 component, systems and subsystems covered by the report.
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1 (2) A report on any system or component inspected that,
2 in the opinion of the licensee, is significantly deficient.
3 (3) The licensee's recommendation to seek further
4 evaluation of an expert in that field or monitor deficiencies
5 as reported.
6 (4) A list of any and all systems or components that
7 were designated for inspection in the standards of practice
8 adopted by the board but that were not inspected.
9 (5) The reason a system or component was not inspected.
10 "Home inspector." An individual who performs a home
11 inspection.
12 "License." A license issued under this chapter to engage in
13 home inspections.
14 "Licensee." A person who performs home inspections and who
15 is licensed under this chapter as a home inspector.
16 "National home inspectors association." Any national
17 association of home inspectors that:
18 (1) Is operated on a not-for-profit basis and is not
19 operated as a franchise.
20 (2) Has members in more than ten states.
21 (3) Requires that a person may not become a full member
22 unless the person has performed or participated in more than
23 100 home inspections and has passed a recognized or
24 accredited examination testing knowledge of the proper
25 procedures for conducting a home inspection.
26 (4) Requires that its members comply with a code of
27 conduct and attend continuing professional education classes
28 as an ongoing condition of membership.
29 "Preferred provider relationship." A referral service
30 offered by a real estate company, mortgage company, law firm,
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1 individual agent, attorney or other similar entity or individual
2 when a licensee is recommended over other licensees in exchange
3 for any direct or indirect consideration therefore, including,
4 without limitation, the payment of a fee, or where in
5 consideration of a licensee advertising produced by or for a
6 person in consideration for recommendations or referrals to
7 undertake home inspections.
8 "Residential dwelling." A structure consisting of at least
9 one, but not more than four, units, each designed for occupancy
10 by a single family, whether the unit or units are occupied or
11 unoccupied.
12 (b) Index of other definitions.--The following is a
13 nonexclusive list of other definitions applying to this chapter
14 and the sections in which they appear:
15 "Agent." Section 7102 (relating to definitions).
16 "Agreement of transfer." Section 7102 (relating to
17 definitions).
18 "Buyer." Section 7102 (relating to definitions).
19 "Material defect." Section 7102 (relating to definitions).
20 "Residential real estate transfer." Section 7103 (relating
21 to application of part).
22 "Seller." Section 7102 (relating to definitions).
23 Section 2. Title 68 is amended by adding sections to read:
24 § 7504.1. Pennsylvania Board of Home Inspectors.
25 (a) Establishment.--The Pennsylvania Board of Home
26 Inspectors is established to conduct business affairs under the
27 Bureau of Professional and Occupational Affairs. The purpose of
28 the board shall be to administer and enforce the provisions of
29 this chapter, promote initiatives to protect consumers of home
30 inspection services, create guidelines for the development of
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1 high-level skills in home inspectors and encourage the presence
2 of a viable home inspection industry within this Commonwealth.
3 (b) Composition.--The board shall be composed of seven
4 members who must be full-time residents of this Commonwealth and
5 appointed by the Governor in accordance with the following
6 requirements:
7 (1) For purposes of the initial appointments, five of
8 the members must:
9 (i) Be actively engaged in performing home
10 inspections in this Commonwealth for no less than five
11 years immediately preceding the member's appointment to
12 the board.
13 (ii) Have completed no less than 100 fee-paid
14 inspections per year over the five years immediately
15 preceding appointment to the board.
16 (iii) Demonstrate that they have passed a written
17 examination administered by a national examination
18 organization that complies with the standards established
19 by this chapter.
20 A board member who becomes a home inspector shall obtain the
21 requisite license in accordance with this chapter, before or
22 on the six-month anniversary of the effective date of this
23 section. If a board member does not obtain the requisite
24 license on or before such date, the board member shall be
25 considered to have resigned from the board on the six-month
26 anniversary of the effective date of this section, and the
27 Governor shall fill the vacancy in accordance with this
28 section. Thereafter, the home inspector members must be
29 licensed prior to their appointments.
30 (2) One person shall represent the public at large and
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1 shall not be associated with the home inspection, home
2 building or real estate business other than as a consumer.
3 This member shall be appointed by the Governor but shall not
4 be selected from a submitted list of names.
5 (3) One person shall be the Commissioner of the Bureau
6 of Professional and Occupational Affairs or his designee.
7 (c) Member selection and service.--
8 (1) Appointment of the initial members comprising the
9 board shall begin on the three-month anniversary of the
10 effective date of this section, and their respective terms
11 shall be staggered, as follows:
12 (i) Three members for a term of three years.
13 (ii) Two members for a term of two years.
14 (iii) Two members for a term of one year.
15 (2) Except as provided in paragraph (1), all board
16 members shall serve a term of three years, and no member
17 shall serve for more than three consecutive terms.
18 (3) The Governor may remove a board member at any time
19 for incompetence, neglect of duty or unprofessional conduct.
20 (4) If a vacancy occurs in the membership of the board,
21 the Governor shall appoint an individual to serve for the
22 remainder of the unexpired term who has like qualifications
23 required of the member who created the vacancy.
24 (5) Each year the board shall elect a member as
25 chairperson and vice chairperson. The chairperson and vice
26 chairperson shall serve in their respective capacities for no
27 more than one year consecutively and until a successor is
28 elected. The chairperson shall preside at all meetings at
29 which the chairperson is present. The vice chairperson shall
30 preside at meetings in the absence of the chairperson and
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1 shall perform other duties as the chairperson directs. If the
2 chairperson and vice chairperson are absent from a meeting of
3 the board when a quorum exists, the members who are present
4 may elect a presiding officer who shall serve as acting
5 chairperson until the conclusion of the meeting or until the
6 arrival of the chairperson or vice chairperson at the
7 meeting, whichever occurs first.
8 (6) The board shall meet at least quarterly each
9 calendar year at the call of the chairperson or the written
10 request of a majority of the members of the board. The
11 chairperson shall establish the date, time and place for each
12 meeting. A majority of the current members of the board shall
13 constitute a quorum. The affirmative vote of a majority of
14 the members appointed to the board shall be necessary for the
15 board to take official action.
16 (7) Each member of the board shall serve on a voluntary
17 basis but shall be entitled to reimbursement for traveling
18 expenses and other expenses actually incurred in connection
19 with the member's duties as established under this chapter.
20 § 7504.2. Licensure of home inspectors by board.
21 (a) Powers of board.--The board, through the promulgation of
22 administrative rules and regulations, shall:
23 (1) Establish the requirements for and prescribe the
24 form of licenses, applications and other documents that are
25 required for home inspectors to be licensed under this
26 chapter.
27 (2) Grant, deny, suspend and revoke approval of
28 examinations and courses of study regarding home inspections;
29 establish standards for continuing home inspection education,
30 including, without limitation, the subject matter and content
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1 of courses of study and the selection of instructors; and
2 approve other equivalent educational programs and establish
3 procedures for the issuance of credit upon satisfactory proof
4 of the completion of these programs.
5 (3) Issue, deny, suspend and revoke licenses in
6 accordance with this chapter.
7 (4) Establish and maintain a current list of home
8 inspectors who are registered or licensed. The list shall be
9 available for public inspection, including by electronic
10 means.
11 (5) Establish and maintain a current list of national
12 home inspectors associations approved by the board as meeting
13 the requirements of this chapter. Any national home
14 inspectors association approved by the board must provide the
15 board initially, and upon request, with a list of its members
16 in this Commonwealth. Once approved, the association shall
17 notify the board within 30 days when any of its members in
18 this Commonwealth fail to maintain their membership in the
19 association or are otherwise not in compliance with the rules
20 of the association.
21 (6) Investigate complaints concerning licensees or
22 persons the board has reason to believe should be licensees,
23 including complaints concerning failure to comply with this
24 chapter or administrative regulations promulgated under this
25 chapter and, when appropriate, take action in accordance with
26 this chapter.
27 (7) Bring actions in the name of the Commonwealth in an
28 appropriate court in order to enforce compliance with this
29 chapter or the administrative regulations promulgated under
30 this chapter.
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1 (8) Establish licensure fees in an amount determined by
2 the board that are reasonably necessary and appropriate for
3 enforcement.
4 (9) Inspect the records of a licensee in accordance with
5 administrative regulations promulgated by the board.
6 (10) Conduct or designate a member or other
7 representative to conduct public hearings on any matter for
8 which a hearing is required under this chapter and exercise
9 all powers granted under this section.
10 (11) Adopt a seal containing the words "Pennsylvania
11 Board of Home Inspectors" and, through the board's secretary,
12 certify copies and authenticate all acts of the board.
13 (12) Use board members, consultants and other persons to
14 enter into contracts and to authorize expenditures that are
15 reasonably necessary or appropriate to administer and enforce
16 this chapter and administrative regulations promulgated under
17 this chapter.
18 (13) Establish continuing education requirements for
19 licensees in accordance with this chapter.
20 (14) Maintain the board's office, files, records and
21 property in the City of Harrisburg.
22 (15) Require all fee-paid home inspections to be
23 conducted in accordance with the standards of practice of
24 board-approved national home inspection associations.
25 (16) Establish standards of practice for licensees.
26 (17) Develop a model home inspection contract meeting
27 the provisions of this chapter and encourage licensees to use
28 the model contract.
29 (18) Create guidelines for mentoring programs and
30 approved training facilities established pursuant to the
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1 requirements of section 7506 (relating to required
2 contractual provisions regarding home inspections).
3 (19) Exercise all other powers specifically conferred on
4 the board under this chapter.
5 (20) Promulgate rules and regulations to carry out the
6 effective administration and the requirements of this
7 chapter.
8 (b) Examination requirement.--To be eligible for a license
9 as a home inspector in this Commonwealth, an applicant must pass
10 a valid, reliable examination. This examination shall:
11 (1) Test competence in home inspection practice.
12 (2) Be developed pursuant to accepted psychometric
13 standards promulgated by the American Educational Research
14 Association's "Standards for Educational and Psychological
15 Testing"; the Equal Employment Opportunity Commission's
16 "Uniform Guidelines for Employee Selection Procedures"; the
17 Civil Rights Act of 1964 (Public Law 88-352, 78 Stat. 241);
18 the Americans with Disabilities Act of 1990 (Public Law 101-
19 336, 104 Stat. 327); and similar applicable standards.
20 (3) Be administered and proctored by an approved and
21 recognized testing organization at a physical location to
22 ensure both the security and integrity of the examination.
23 § 7504.3. Support of board by bureau.
24 The bureau shall provide the board with:
25 (1) Clerical or other assistants, including
26 investigators, necessary for the proper performance of the
27 board's duties.
28 (2) A place to hold board meetings and hearings.
29 (3) Office equipment and office space for board records,
30 staff and other effects necessary to carry out the
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1 requirements of this chapter.
2 § 7504.4. Income and expenditures of board.
3 (a) Establishment of revolving fund.--There is hereby
4 established in the State Treasury a revolving fund for the use
5 of the board.
6 (b) Deposits in fund.--All fees and other money received by
7 the board in accordance with this chapter shall be deposited in
8 the revolving fund. No part of this revolving fund shall revert
9 to the General Fund.
10 (c) Use of fund.--The reimbursement of the board's expenses
11 shall be paid from the revolving fund.
12 § 7504.5. Licensure of home inspectors.
13 (a) Home inspector license application.--A person applying
14 for a license as a home inspector shall apply on a written,
15 notarized form prescribed and provided by the board. Supporting
16 and other required documents may be submitted by other means as
17 prescribed by the board. The applicant shall pay the applicable
18 licensing fee established by the board.
19 (b) Licensing requirements.--The board shall establish, from
20 time to time, rules and regulations pertaining to the licensure
21 of home inspectors but in any event shall require that a home
22 inspector be a member, in good standing, of a board-approved
23 national home inspection association.
24 (c) Denial of license.--The board shall deny a license to
25 any applicant who fails to:
26 (1) furnish evidence satisfactory to the board, showing
27 that the individual:
28 (i) is at least 18 years of age;
29 (ii) (A) has graduated from high school, earned a
30 Pennsylvania or other state's general educational
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1 development diploma; or
2 (B) has actively worked within the business of
3 home inspection for a minimum of five years; and
4 (iii) meets other criteria established by the board.
5 (2) verify the information submitted on the approved and
6 notarized application form; or
7 (3) complete a board-approved training program or course
8 of study involving the performance of home inspections and
9 pass a valid examination prescribed or approved by the board,
10 where such study program shall be for no less than 120 hours
11 of instruction and include no less than 40 hours of actual
12 in-field training.
13 (d) Waivers moving from another jurisdiction.--The licensing
14 requirements for a home inspector may be waived for a person who
15 moves to this Commonwealth from another jurisdiction, and the
16 person may be granted a license as a home inspector if the
17 person meets all of the following requirements:
18 (1) The other jurisdiction grants the same privileges to
19 licensees of Pennsylvania as the Commonwealth grants to
20 licensees of that other jurisdiction.
21 (2) The person is licensed in the other jurisdiction.
22 (3) The licensing requirements of the other jurisdiction
23 are substantially similar to the requirements of this
24 chapter.
25 (4) The person provides a notarized statement that the
26 person has studied, is familiar with and will abide by the
27 provisions of this chapter and the administrative regulations
28 promulgated by the board.
29 (e) Advertising without license.--An individual shall not
30 advertise nor claim to be a licensee and shall not conduct home
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1 inspection services for compensation without first obtaining a
2 license issued by the board.
3 (f) Ownership of licenses.--All licenses issued by the board
4 shall remain the property of the board.
5 (g) Information change notification.--A licensee shall
6 notify the board within 30 days of any change of:
7 (1) name;
8 (2) name under which the licensee conducts business;
9 (3) business address; or
10 (4) lapse, change or cancellation of insurance coverage.
11 (h) License renewal.--A licensee may renew the license in
12 accordance with the rules and regulations promulgated by the
13 board which shall include the following provisions:
14 (1) The home inspector shall furnish evidence showing
15 successful completion of the continuing education
16 requirements of this chapter, pay the renewal fee established
17 by the board and show proof of professional liability
18 insurance as required by section 7509 (relating to liability
19 insurance).
20 (2) The board shall send a renewal notice to each
21 licensee at least 60 days prior to the expiration of the
22 license. The notice shall inform the licensee of the need to
23 renew and the requirement to submit an application and to pay
24 the renewal fee. If the board fails to send the notice of
25 expiration within such time period, the licensee shall not be
26 subject to a sanction for failure to renew. If the board
27 later sends the renewal notice to the licensee, the licensee
28 must submit a complete application and renewal fee to the
29 board within 45 days of the receipt of the renewal notice, or
30 be subject to a sanction for failure to renew.
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1 (3) Renewal fees shall be paid with a draft, money
2 order, cashier's check, certified or other personal check,
3 or, if payment is made in person, the payment may be made in
4 cash. If the board receives an uncertified personal check for
5 the renewal fee and if the check does not clear the bank, the
6 board may refuse to renew the license.
7 (4) Before the end of each license period, the licensee
8 shall complete the continuing education required by the
9 board.
10 (i) Inactive licenses.--The board may, through the
11 promulgation of rules and regulations:
12 (1) Establish an inactive license for licensees who do
13 not actively perform home inspections but wish to maintain
14 the license. This inactive status shall not exceed a term of
15 three years.
16 (2) Reduce license and renewal fees for inactive
17 licenses.
18 (3) Waive the insurance requirements established in
19 section 7509 for inactive licenses except that the inactive
20 licensee must maintain insurance tail coverage for the first
21 year of inactivity.
22 § 7504.6. Nonresident home inspectors.
23 (a) Nonresident licensing.--A nonresident individual who the
24 board determines meets the requirements of this chapter and
25 files a written consent may be licensed as a home inspector.
26 (b) Nonresident consent form.--A nonresident applicant shall
27 file with the board a written and notarized consent stating
28 that, if licensed:
29 (1) The applicant agrees to the commencement of any
30 action arising out of the conduct of the applicant's business
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1 in this Commonwealth in the county in which the events giving
2 rise to the cause of action occurred.
3 (2) The applicant:
4 (i) agrees to provide to the board the name and
5 address of an agent to receive service of process in this
6 Commonwealth; or
7 (ii) consents to the board acting as the applicant's
8 agent for the purpose of receiving service of process if:
9 (A) an agent's name and address have not been
10 filed with the board, or the agent's name and address
11 on file with the board are incorrect; and
12 (B) the applicant agrees that service of process
13 in accordance with the Pennsylvania Rules of Civil
14 Procedure is proper service and subjects the
15 applicant to the jurisdiction of Pennsylvania courts.
16 § 7504.7. Continuing education of home inspectors.
17 The board shall promulgate rules and regulations concerning
18 the continuing education required for the renewal of a home
19 inspector license and shall:
20 (1) Establish procedures for approving organizations
21 that provide continuing education.
22 (2) Prescribe the content, duration and organization of
23 continuing education courses that contribute to the
24 competence of home inspectors.
25 § 7504.8. Registration or licensing of home inspectors by
26 political subdivisions.
27 No agency or political subdivision of this Commonwealth,
28 other than the board, shall impose the following on individuals
29 licensed under this chapter:
30 (1) A registration or licensing requirement for
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1 conducting home inspections.
2 (2) A license fee to obtain any local license, except
3 that this prohibition shall not prevent any local government
4 from imposing an occupational license tax on any person
5 operating as a home inspector within the jurisdiction of the
6 local government.
7 § 7504.9. Disciplinary proceedings by board.
8 (a) Disciplinary actions.--The board shall take disciplinary
9 action against or impose sanctions on a licensee for failing to
10 comply with any provision of this chapter or any rules and
11 regulations promulgated to carry out this chapter as follows:
12 (1) The board may summarily suspend a license for up to
13 90 days before a final adjudication or during an appeal of
14 the board's determination if the board finds that the
15 licensee represents a clear and immediate danger to the
16 public's health, safety, financial interest or to property if
17 allowed to perform home inspections. The summary suspension
18 may be renewed at a hearing before the board for up to 90
19 days.
20 (2) If the board:
21 (i) Determines that an individual is not licensed
22 under this chapter and is engaged in or believed to be
23 engaged in activities for which a license is required
24 under this chapter, then the board shall issue an order
25 to that individual requiring the individual to show cause
26 why the individual should not be ordered to cease and
27 desist from the activities. The show cause order shall
28 set forth a date, time and place for a hearing at which
29 the individual shall appear and show cause why the
30 individual should not be subject to licensing under this
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1 chapter.
2 (ii) After a hearing, determines that the activities
3 in which the individual is engaged are subject to
4 licensure under this chapter, the board may issue a cease
5 and desist order that identifies the individual and
6 describes activities that are the subject of the order.
7 (3) A cease and desist order issued under this section
8 shall be enforceable in the Commonwealth Court.
9 (b) Violations of chapter.--An individual is in violation of
10 this chapter when the individual commits any of the following:
11 (1) Performs or offers to perform home inspections for
12 compensation without being licensed as a home inspector and
13 without being exempt from licensure under this chapter.
14 (2) Presents as the individual's own license, the
15 license of another.
16 (3) Intentionally gives false or materially misleading
17 information to the board or to a board member in connection
18 with a licensing matter.
19 (4) Impersonates another licensee.
20 (5) Uses an expired, suspended, revoked or an otherwise
21 restricted license.
22 (c) Fee or compensation.--The board shall add to any penalty
23 imposed the amount of any fee or other compensation earned by
24 the individual in the commission of the violation. Each
25 transaction involving an unauthorized activity as described in
26 this chapter shall constitute a separate violation.
27 (d) Legal advice.--The Department of State shall act as the
28 legal adviser for the board and provide any legal assistance
29 necessary to carry out this chapter.
30 (e) Revocation or suspension of license.--The board shall
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1 adopt provisions to revoke or suspend a license pending
2 investigation for any of the following:
3 (1) A conviction in any jurisdiction of a misdemeanor
4 involving moral turpitude or of a felony. A plea of nolo
5 contendere shall be considered a conviction.
6 (2) An action demonstrating untrustworthiness,
7 incompetence, dishonesty, gross negligence, material
8 misrepresentation, fraud or unethical conduct in any dealings
9 subject to the provisions of this chapter or the rules and
10 regulations promulgated by the board.
11 (3) Use of advertising or solicitation that is false,
12 misleading or otherwise deemed unprofessional by the board.
13 All advertisements, contracts, correspondence and other
14 documents utilized by a home inspector shall prominently
15 include the home inspector's name and registration number as
16 a licensee according to this chapter.
17 (4) Habitual or excessive use of intoxicants or illegal
18 drugs.
19 (5) Failure to supervise adequately and in accordance
20 with rules governing direct supervision, an unlicensed
21 inspector performing home inspections under the supervision
22 of the licensed home inspector.
23 (6) Any other reason deemed necessary by the board.
24 Section 3. Sections 7505(b) and (c) and 7506 of Title 68 are
25 amended to read:
26 § 7505. Consumer remedies.
27 * * *
28 (b) Prohibited acts.--Any of the following acts engaged in
29 by a home inspector, an employer of a home inspector or another
30 business or person that controls or has a financial interest in
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1 the employer of a home inspector shall be deemed to be an unfair
2 or deceptive act or practice as defined by section 2(4)(i)
3 through (xxi) of the Unfair Trade Practices and Consumer
4 Protection Law:
5 (1) Performing or offering to perform for an additional
6 fee any repairs to a structure with respect to which the home
7 inspector, the employer of the home inspector or such other
8 business or person has prepared a home inspection report
9 within the preceding 12 months, except that this paragraph
10 shall not apply to remediation for radon or wood destroying
11 insects.
12 (2) Inspecting for a fee any property in which the home
13 inspector, the employer of the home inspector or such other
14 business or person has any financial interest or any interest
15 in the transfer of the property, including, without
16 limitation, engaging in a pay-to-play scheme whereunder the
17 home inspector receives a direct or indirect consideration
18 for receiving services leads towards providing home
19 inspection services, or receipt of a commission as an agent,
20 unless the financial interest or interest in the transfer of
21 the property is disclosed in writing to the buyer before the
22 home inspection is performed and the buyer signs an
23 acknowledgment of receipt of the disclosure.
24 (3) Offering or delivering any commission, referral fee
25 or kickback to the seller of the inspected property or to an
26 agent for either or both of the seller and the buyer for the
27 referral of any business to the home inspector, the employer
28 of the home inspector or such other business or person.
29 (4) Accepting an engagement to perform a home inspection
30 or to prepare a home inspection report in which the
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1 employment itself or the fee payable for the inspection is
2 contingent upon the conclusions in the report, preestablished
3 or prescribed findings or the closing of the transaction.
4 (5) Participation, by any real estate broker or agent,
5 directly or indirectly, in a pay-to-play scheme in which the
6 home inspector receives a direct or indirect consideration
7 for receiving service that leads towards providing home
8 inspection services.
9 (6) When there is a home warranty company which is
10 wholly or appreciably owned or affiliated with a real estate
11 brokerage company, failing to disclose to the consumer such
12 affiliation prior to contracting with the consumer for home
13 inspection services.
14 [(c) Exception.--A home warranty company that is affiliated
15 with or retains the home inspector does not violate subsection
16 (b) if the home warranty company performs repairs pursuant to
17 claims made under a home warranty contract.]
18 * * *
19 § 7506. Required contractual provision regarding home
20 inspections.
21 Except as provided in this section, a provision of an
22 agreement of transfer regarding the right of the buyer to obtain
23 a home inspection report and providing for the consequences, if
24 any, shall provide that the home inspection be performed by a
25 licensee. [full member in good standing of a national home
26 inspection association in accordance with the ethical standards
27 and code of conduct or practice of that association, provided
28 that a home inspection performed by a person who has not
29 attained full membership in a national home inspection
30 association satisfies the requirements of this section if the
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1 person is:
2 (1) licensed or registered as a professional engineer
3 under the act of May 23, 1945 (P.L.913, No.367), known as the
4 Engineer, Land Surveyor and Geologist Registration Law;
5 (2) licensed or registered under the act of December 14,
6 1982 (P.L.1227, No.281), known as the Architects Licensure
7 Law; or
8 (3) supervised by a full member in good standing of a
9 national home inspection association who agrees to be
10 responsible for the home inspection report by signing the
11 report.]
12 A home inspection performed by a person who has not attained
13 licensure satisfies the requirements of this section if the
14 person is directly supervised by a licensee who agrees to be
15 responsible for the home inspection by signing the report.
16 Section 4. Section 7507 of Title 68 is amended by adding a
17 subsection to read:
18 § 7507. Contracts with home inspectors.
19 * * *
20 (c) Recommendation of home inspector.--
21 (1) At the time of the signing of the first written
22 contract to purchase, a real estate broker and salesperson,
23 or the seller, if no broker or salesperson is involved in the
24 sale, shall distribute a brochure, published by the board,
25 educating the consumers about the home inspection process.
26 (2) A real estate broker and salesperson may not
27 directly recommend a specific home inspection company or home
28 inspector but may, on request, provide a complete list of
29 licensees prepared by the board.
30 (3) The prohibition in paragraph (2) shall not apply if
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1 there is a written contractual agreement or a written agency
2 disclosure between the buyer and the real estate broker
3 specifying that the real estate broker acts exclusively for
4 the buyer as a buyer's broker.
5 Section 5. Section 7509(a) of Title 68 is amended and the
6 section is amended by adding a subsection to read:
7 § 7509. Liability insurance.
8 (a) [Required insurance.--A home inspector shall maintain
9 insurance against errors and omissions in the performance of a
10 home inspection and general liability, with coverages of not
11 less than $100,000 per occurrence and $500,000 in the aggregate
12 and with deductibles of not more than $2,500.] Professional
13 liability coverage.--Every licensee who is engaged in home
14 inspections shall secure, maintain and file with the Secretary
15 of State proof of a certificate of liability coverage, which
16 terms and conditions shall be determined by the Secretary of
17 State in consultation with the board. Every proof of liability
18 coverage required to be filed with the Secretary of State shall
19 provide that cancellation or nonrenewal of the policy shall not
20 be effective unless and until at least ten days' notice of
21 intention to cancel or nonrenew has been received in writing by
22 the Secretary of State.
23 * * *
24 (c) All required insurance coverage shall:
25 (1) Be issued by an insurance company or other legal
26 entity authorized to transact insurance business in this
27 Commonwealth.
28 (2) Identify the Commonwealth as an additional insured.
29 (3) Provide that cancellation and nonrenewal of the
30 insurance policy is not effective until the board receives no
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1 less than ten days' prior written notice of the expiration or
2 earlier termination.
3 (4) Contain any other terms and conditions established
4 by the board.
5 Section 6. Section 7510 of Title 68 is amended to read:
6 § 7510. Reliance by buyer.
7 (a) Reliance.--A buyer shall be entitled to rely in good
8 faith, without independent investigation, on a written
9 representation by a home inspector that the home inspector is[:
10 (1) licensed or registered as a professional engineer
11 under the act of May 23, 1945 (P.L.913, No.367), known as the
12 Engineer, Land Surveyor and Geologist Registration Law;
13 (2) licensed or registered under the act of December 14,
14 1982 (P.L.1227, No.281), known as the Architects Licensure
15 Law; or
16 (3) a full member in good standing of a national home
17 inspection association.]
18 licensed to conduct home inspections in this Commonwealth.
19 (b) Display of license number.--The home inspector shall
20 display his assigned license number on all promotional,
21 marketing and advertising materials provided to the general
22 public.
23 (c) License requirement.--No person shall conduct a home
24 inspection or represent a qualification to conduct a home
25 inspection for compensation unless that person is licensed as a
26 home inspector under this chapter.
27 (d) Business entities.--A business entity may not:
28 (1) provide or offer to provide home inspection services
29 unless each of the home inspectors employed by the business
30 entity satisfies all the requirements of this section; or
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1 (2) use, in connection with the name or signature of the
2 business entity, the title "home inspector" to describe the
3 business entity's services unless each home inspector
4 employed by the business entity satisfies all the
5 requirements of this section.
6 Section 7. Section 7511 of Title 68 is amended by adding a
7 subsection to read:
8 § 7511. Penalties.
9 * * *
10 (c) Unauthorized practice.--Any person subject to an
11 administrative order issued by the board directing the cessation
12 of any activity for which a license is required or suspending or
13 revoking a license previously issued and who directly or
14 indirectly:
15 (1) engages in the business of home inspection;
16 (2) holds himself out to the public as being able to
17 engage in the business of home inspection without a license;
18 (3) engages in the business of home inspection after
19 having his license revoked or suspended; or
20 (4) without a license to engage in the business of home
21 inspection, directly or indirectly employs, permits or
22 authorizes an unlicensed person to engage in the business of
23 home inspection;
24 commits a summary offense and on the first conviction thereof
25 shall be sentenced to a fine of not more than $1,000, or, upon a
26 second or subsequent conviction thereof, shall be sentenced to a
27 fine of not more than $2,500. Each violation of this chapter
28 shall be deemed a separate offense.
29 Section 8. This act shall take effect in 120 days.
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