HB 207: "An Act relating to the registration of persons who perform home inspections; and providing for an effective date."
00HOUSE BILL NO. 207 01 "An Act relating to the registration of persons who perform home inspections; 02 and providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 08 is amended by adding a new chapter to read: 05 Chapter 57. Home Inspectors. 06 Article 1. Registration. 07 Sec. 08.57.010. Registration required. (a) Unless exempt under 08 AS 08.57.900 or serving lawfully as an apprentice under (b) of this section, a person 09 may not perform a home inspection until that person has been issued a certificate of 10 registration by the department. A partnership or joint venture shall be considered 11 registered if one of the general partners or venturers whose name appears in the name 12 under which the partnership or venture does business is registered. 13 (b) Notwithstanding (a) of this section, a person who is not registered under 14 this chapter may perform a home inspection as an apprentice if the person
01 (1) is employed by a registered home inspector who directly supervises 02 the person's work; and 03 (2) has not performed home inspections for more than two years 04 without being registered under this chapter. 05 (c) A home inspector who employs an apprentice under (b) of this section is 06 liable for the work done by the apprentice. 07 Sec. 08.57.020. Qualifications; continued competency. (a) The department 08 shall issue a home inspection registration to a person who 09 (1) passes a home inspection examination, which shall be offered by 10 the department at least once each year in each judicial district; the examination, which 11 shall be written and practical, must test competence in relation to arctic structural and 12 thermal construction techniques and other matters as determined by the department in 13 consultation with representatives of the construction industry; 14 (2) applies for registration within six months after passing the 15 examination required under (1) of this subsection; 16 (3) within the seven years preceding the date of application, has not 17 been under a sentence for an offense related to forgery, theft in the first or second 18 degree, extortion, or conspiracy to defraud creditors or for a felony involving 19 dishonesty; and 20 (4) pays the appropriate fees. 21 (b) The department may not renew a registration issued under this section 22 unless the applicant submits proof of continued competency relating to home 23 inspecting that satisfies the department. A lapsed registration may be reinstated within 24 two years after the lapse upon proof of continued competency, payment of a renewal 25 fee for the intervening time period, and payment of any penalty fee established under 26 AS 08.01.100(b). If the registration has been lapsed for more than two years, the 27 department may not reinstate it until the person also passes the home inspection 28 examination described in (a) of this section. 29 Sec. 08.57.030. Certificate of registration. (a) A certificate of registration 30 shall be renewed under the same requirements as for an original registration. The 31 commissioner shall issue to the applicant a certificate of registration upon compliance
01 with the registration requirements of this chapter. 02 (b) The commissioner may not issue a certificate of registration or renew the 03 registration of an applicant whose registration has been revoked or suspended or 04 against whom a fine has been imposed under this chapter until the period of revocation 05 or suspension has expired and any fine has been paid. 06 Sec. 08.57.040. Fees. (a) The department shall set fees under AS 08.01.065 07 for 08 (1) registration and renewal of registration for home inspectors; 09 (2) examination for home inspectors; and 10 (3) departmental publications and seminars related to this chapter. 11 (b) A person who fails a home inspector examination shall pay the 12 examination fee set by the department if the person applies to retake an examination. 13 Sec. 08.57.050. Identification requirements. (a) Except as provided 14 otherwise by law, a person who has registered under one name as required by this 15 chapter may not act in the capacity of a home inspector under any other name unless 16 that name also is registered. 17 (b) All advertising, contracts, correspondence, cards, signs, posters, papers, and 18 documents prepared by a home inspector for the home inspection business must show 19 the home inspector's name, mailing address, and address of the home inspector's 20 principal place of business. Advertising and contracts must also include the home 21 inspector's registration number. 22 (c) Individual home inspectors and partners, associates, agents, salespeople, 23 solicitors, officers, and employees of home inspectors shall use their true names and 24 addresses and the true name of the home inspecting firm at all times while acting in 25 the capacity of a home inspector or performing related activities. 26 Article 2. Bond and Insurance. 27 Sec. 08.57.100. Bond required. (a) Each applicant shall, at the time of 28 applying for a certificate of registration, file with the commissioner a $100,000 surety 29 bond running to the state conditioned upon the applicant's promise to pay all 30 (1) taxes and contributions due the state and political subdivisions; 31 (2) persons furnishing labor or material or renting or supplying
01 equipment to the applicant; and 02 (3) amounts that may be adjudged against the applicant by reason of 03 negligent or improper work or breach of contract in the conduct of the home inspecting 04 business or by reason of damage to public facilities occurring in the course of a home 05 inspection. 06 (b) In lieu of the surety bond required under (a) of this section, the applicant 07 may file with the commissioner a cash deposit or other negotiable security acceptable 08 to the commissioner in the amount specified for the bond. 09 (c) The bond required by this section remains in effect until cancelled by 10 action of the surety, the principal, or the commissioner. An action may not be 11 commenced upon the bond later than three years after its cancellation. 12 Sec. 08.57.110. Claims against home inspector. (a) A person having a claim 13 against a home inspector for an item referred to in AS 08.57.100 may bring suit on the 14 bond in the district court of the judicial district in which venue lies. A copy of the 15 complaint shall be served by registered or certified mail on the commissioner at the 16 time suit is filed, and the commissioner shall maintain a record, available for public 17 inspection, of all suits commenced. Two additional copies shall be served on the 18 director of the division of insurance with the payment to the director of a fee set under 19 AS 21.06.250, taxable as costs in the action. This service on the director shall 20 constitute service on the surety, and the director shall transmit the complaint or a copy 21 of it to the surety within 72 hours after it has been received. The surety on the bond 22 is not liable in an aggregate amount in excess of that named in the bond, but in case 23 claims pending at any one time exceed the amount of the bond, the claims shall be 24 satisfied from the bond in the following order: 25 (1) labor, including employee benefits; 26 (2) taxes and contributions due the state, city, and borough, in that 27 order; 28 (3) material and equipment; 29 (4) claims for breach of contract; 30 (5) repair of public facilities. 31 (b) If a judgment is entered against the cash deposit, the commissioner, on
01 receipt of a certified copy of a final judgment, shall pay the judgment from the amount 02 of the deposit in accordance with the priorities set out in (a) of this section. 03 Sec. 08.57.120. Cancellation of bond. This chapter does not impair the right 04 of a bonding company to cancel its bond of a home inspector for lawful reasons. 05 Sec. 08.57.130. Insurance required. Each applicant, at the time of applying 06 for registration or on renewal of registration, shall file with the commissioner 07 satisfactory evidence that the applicant has in effect 08 (1) to the extent required under AS 23.30, workers' compensation 09 insurance that is purchased from a private insurer who is admitted to do business in 10 the state and that shows coverage in this state, appropriate employee classifications, 11 and rates applicable in this state, or a valid workers' compensation self-insurance 12 certificate issued by the Alaska Workers' Compensation Board; and 13 (2) public liability and property damage insurance covering the 14 applicant's home inspecting operations in this state in the sum of not less than $20,000 15 for damage to property, $50,000 for injury, including death, to any one person, and 16 $100,000 for injury, including death, to more than one person. 17 Sec. 08.57.140. Advertising bond and insurance. Home inspectors may not 18 advertise that they are bonded and insured simply because they have complied with the 19 bond and insurance requirements of this chapter. 20 Sec. 08.57.150. Return of cash deposit. (a) A home inspector who has filed 21 a cash deposit and who ceases doing business as a home inspector may request the 22 return of as much of that cash deposit as is held by the commissioner by filing a 23 notarized statement with the commissioner 24 (1) that the home inspector has ceased doing business as a home 25 inspector; and 26 (2) at least three years after filing the statement in (1) of this subsection 27 that 28 (A) requests return of the cash deposit; 29 (B) certifies that the former home inspector has not been 30 engaged in business as a home inspector for at least three years; and 31 (C) certifies that to the best of the home inspector's knowledge
01 no action has been commenced on the cash deposit that has not been dismissed 02 or reduced to a final judgment that has been satisfied. 03 (b) The commissioner, after paying judgments against the cash deposit under 04 AS 08.57.110(b), shall return the remainder of a former home inspector's cash deposit 05 to the home inspector if 06 (1) the former home inspector has complied with (a) of this section; 07 and 08 (2) all actions that have been commenced on the cash deposit have 09 been dismissed or reduced to a final judgment that has been satisfied. 10 Article 3. Enforcement. 11 Sec. 08.57.200. Investigations. Either the department or the Department of 12 Labor may investigate alleged or apparent violations of this chapter. These 13 departments, upon showing proper credentials, may enter, during regular hours of 14 work, a site where it appears that home inspecting work is being done. The 15 departments may make inquiries about the identity of the home inspector or the person 16 acting in the capacity of a home inspector. On demand, a home inspector or person 17 acting in the capacity of a home inspector, or that person's representative, shall 18 produce evidence of current registration. 19 Sec. 08.57.210. Issuance of citations. Either the department or the 20 Department of Labor may issue a citation for a violation if there is probable cause to 21 believe a person has violated this chapter. Each day a violation continues after a 22 citation for the violation has been issued constitutes a separate violation. 23 Sec. 08.57.220. Procedure and form of citation issuance and procedure. 24 (a) A citation issued under this chapter must be in writing. A person receiving the 25 citation is not required to sign a notice to appear in court. 26 (b) The time specified in the notice to appear on a citation issued under this 27 chapter must be at least five days, not including weekends and holidays, after the 28 issuance of the citation unless the person cited requests an earlier hearing. 29 (c) The department and the Department of Labor are responsible for the 30 issuance of books containing appropriate citations, and each shall maintain a record of 31 each book issued and each citation contained in it. Each department shall require and
01 retain a receipt for every book issued to an employee of that department. 02 (d) The department that issues a citation under this chapter shall deposit the 03 original or a copy of the citation with a court having jurisdiction over the alleged 04 offense. Upon its deposit with the court, the citation may be disposed of only by trial 05 in the court or other official action taken by the magistrate, judge, or prosecutor. The 06 department that issued the citation may not dispose of it or copies of it or of the record 07 of its issuance except as required under this subsection and (e) of this section. 08 (e) The department and the Department of Labor shall require the return of a 09 copy of every citation issued by the respective department under this chapter and of 10 all copies of every citation that has been spoiled or upon which an entry has been 11 made and not issued to an alleged violator. The departments shall also maintain, in 12 connection with every citation issued by the respective department, a record of the 13 disposition of the charge by the court where the original or copy of the citation was 14 deposited. 15 (f) If the form of citation issued under this chapter includes the essential facts 16 constituting the offense charged, and if the citation is sworn to as required under the 17 laws of this state for a complaint charging commission of the offense alleged in the 18 citation, then the citation when filed with a court having jurisdiction is considered to 19 be a lawful complaint for the purpose of prosecution. 20 Sec. 08.57.230. Failure to obey citation. Unless the citation has been voided 21 or otherwise dismissed by the magistrate, judge, or prosecutor, a person who without 22 lawful justification or excuse fails to appear in court to answer a citation issued under 23 this chapter, regardless of the disposition of the charge for which the citation was 24 issued, is guilty of a class B misdemeanor. 25 Sec. 08.57.240. Suspension and revocation of registration. (a) If the 26 insurance required in AS 08.57.130 ceases to be in effect, the registration of the home 27 inspector shall be suspended until the insurance has been reinstated. 28 (b) If a final judgment impairs the liability of the surety upon the bond or 29 depletes the cash deposit so that there is not in effect a bond undertaking or cash 30 deposit in the full amount prescribed in AS 08.57.100, the registration of the home 31 inspector involved shall be suspended until the bond liability in the required amount,
01 unimpaired by unsatisfied judgment claims, has been furnished. 02 (c) If a bonding company cancels its bond of a home inspector, the home 03 inspector's registration shall be revoked. The home inspector may again obtain 04 registration by complying with the requirements of this chapter. 05 (d) If a registered home inspector fails to fulfill the home inspector's 06 obligations as set out in AS 08.57.100, the home inspector's registration shall be 07 suspended for a period of time the commissioner determines is appropriate. After 08 three suspensions, the home inspector's registration may be permanently revoked. 09 (e) The department may suspend, revoke, or refuse to grant or renew a home 10 inspector's registration on a finding that 11 (1) the application is fraudulent or misleading; 12 (2) the home inspector has knowingly violated this chapter or a lawful 13 order or regulation of the department; 14 (3) the home inspector is incompetent or has engaged in fraudulent 15 practices. 16 (f) If the department or the Department of Labor determines that a home 17 inspector or a person acting in the capacity of a home inspector is in violation of this 18 chapter, that department may give written notice to the person prohibiting further 19 action by the person as a home inspector. The prohibition continues until the person 20 has submitted evidence acceptable to that department showing that the violation has 21 been corrected. 22 (g) A person affected by an order issued under this chapter may seek equitable 23 relief preventing the department or the Department of Labor from enforcing the order. 24 (h) Proceedings for the denial, suspension, or revocation of a home inspector's 25 registration are governed by AS 44.62 (Administrative Procedure Act). 26 Sec. 08.57.250. Injunction. In an action instituted in the superior court by the 27 department or the Department of Labor, the court may enjoin a person from acting in 28 the capacity of a home inspector in violation of this chapter. In addition to other relief, 29 the court may impose a civil penalty of not more than $250 for each violation. Each 30 day that an unlawful act continues constitutes a separate violation. 31 Sec. 08.57.260. Violations. (a) A home inspector or a person acting in the
01 capacity of a home inspector who knowingly violates AS 08.57.010 is guilty of a 02 class B misdemeanor. A person who violates another provision of this chapter is 03 guilty of a violation punishable under AS 12. 04 (b) Criminal prosecution for a violation of this chapter does not preclude the 05 department or the Department of Labor from seeking available civil remedies. 06 Article 4. Miscellaneous Provisions. 07 Sec. 08.57.300. Legal actions by home inspector. A person acting in the 08 capacity of a home inspector may not bring an action in a court of this state for the 09 collection of compensation for the performance of a home inspection or for breach of 10 a contract for which registration is required under this chapter without alleging and 11 proving that the person was a registered home inspector at the time of contracting for 12 the performance of the work. 13 Sec. 08.57.310. Inspection report required. (a) Before performing a home 14 inspection, a home inspector shall provide to the person on whose behalf a home is 15 inspected a written document specifying 16 (1) the scope of intended inspection, including the structural elements, 17 systems, and subsystems that will be inspected according to the checklist developed 18 by the department under (c) of this section; 19 (2) that the inspection will be visual; and 20 (3) that the home inspector will notify in writing the person on whose 21 behalf the inspection is being made of defects noted during the inspection along with 22 a recommendation, if any, that experts be retained to determine the extent of defects 23 and corrective action necessary to address the defects. 24 (b) After performing a home inspection, a home inspector shall provide to the 25 person on whose behalf the inspection was performed a completed checklist of the type 26 developed under (c) of this section and a written description of defects noted during 27 the inspection along with a recommendation, if any, that experts be retained to 28 determine the extent and corrective action necessary to address the defects. 29 (c) The department shall develop a checklist to be used by home inspectors 30 under (a) of this section. The checklist must include elements related to health and 31 safety, hazards, code compliance, short-term maintenance and repair needs, comfort
01 and convenience, small points, good points, disclaimers, and other noteworthy 02 observations. 03 Sec. 08.57.320. Prohibited acts. (a) A person registered under this chapter, 04 a company that employs a person registered under this chapter, or a company that is 05 controlled by a company that also has a financial interest in a company employing a 06 person registered under this chapter may not 07 (1) perform or offer to perform, for an additional fee, repairs to a 08 structure on which the home inspector or the home inspector's company has prepared 09 a home inspection report in the past 12 months; 10 (2) inspect for a fee any property in which the home inspector or the 11 home inspector's company has a financial interest or an interest in the transfer of the 12 property; 13 (3) offer or deliver compensation, an inducement, or a reward to the 14 owner of the inspected property, the broker, or the agent, for the referral of business 15 to the home inspector or the home inspector's company; 16 (4) accept an engagement to make an inspection or to prepare a report 17 in which the employment itself or the fee payable for the inspection is contingent upon 18 the conclusions in the report, preestablished findings, or the close of escrow. 19 (b) Contractual provisions that purport to limit the liability of a home inspector 20 to the cost of the home inspection report are contrary to public policy and void. 21 Sec. 08.57.330. Limitation on registrant. A registration issued under this 22 chapter does not authorize the holder to perform an activity for which a license is 23 required under AS 08.48. 24 Article 5. General Provisions. 25 Sec. 08.57.900. Exemptions. Notwithstanding other provisions of this chapter, 26 a person who performs a home inspection is not required to be registered under this 27 chapter if the person is 28 (1) a real estate appraiser performing an appraisal; 29 (2) employed by the federal or state government, a political subdivision 30 of the state, or a municipality or unincorporated community and the employee is 31 performing only duties that are within the employee's official duties;
01 (3) licensed under another provision of this title and is performing only 02 activities that are within the scope of the person's license; or 03 (4) performing a home inspection only with respect to property that is 04 the person's residence or in which the person has a financial interest. 05 Sec. 08.57.990. Definitions. In this chapter, 06 (1) "commissioner" means the commissioner of commerce and 07 economic development; 08 (2) "department" means the Department of Commerce and Economic 09 Development; 10 (3) "home inspection" means a visual noninvasive inspection of the 11 condition of a residence or intended residence performed for compensation on behalf 12 of a prospective buyer, seller, or lender in a real estate transaction or on behalf of the 13 owner of the residence; 14 (4) "real estate transaction" means the transfer or attempted transfer of 15 an interest in a unit of real property or an act conducted as a result of or in pursuit of 16 a contract to transfer an interest in a unit of real property. 17 * Sec. 2. AS 08.01.010 is amended by adding a new paragraph to read: 18 (36) regulation of home inspectors under AS 08.57. 19 * Sec. 3. AS 18.56.300(b) is amended to read: 20 (b) As a condition of a commitment to purchase or approve a loan under this 21 section for residential housing the construction of which begins after June 30, 1992, 22 the corporation shall require inspection of the unit of residential housing that is the 23 subject of the loan. The inspection must be performed by a municipal building 24 inspector, by a person who is approved or certified to perform residential inspections 25 by the International Conference of Building Officials or the International Association 26 of Electrical Inspectors, by a person who is registered under AS 08.57.010 to 27 perform home inspections, or, when the unit of residential housing is located in a 28 rural area, by an architect licensed under AS 08.48, by an engineer licensed under 29 AS 08.48, or by another person approved by the corporation. When the unit of 30 residential housing is located in a rural area, the person who makes the inspection may 31 use methods other than a personal physical inspection to make the inspection if the
01 method is approved by the corporation, and variations from the applicable code may 02 be accepted at the corporation's discretion, if the person authorized to inspect the unit 03 under this subsection satisfies the corporation that the variation does not adversely 04 affect the structural integrity of the unit or the health and safety of the residents. The 05 person who makes the inspection shall determine whether the construction conforms 06 to relevant provisions of the construction codes of the municipality or of the state 07 building code, as applicable, at each of the following stages of construction: 08 (1) plan approval; 09 (2) completion of footings and foundations; 10 (3) completion of electrical installation, plumbing, and framing; 11 (4) completion of installation of insulation; 12 (5) final approval. 13 * Sec. 4. AS 45.50.471(b) is amended by adding a new paragraph to read: 14 (42) violating AS 08.57.320. 15 * Sec. 5. REGULATIONS. The Department of Commerce and Economic Development 16 may proceed to adopt regulations to implement this Act. A regulation adopted under this 17 section takes effect under AS 44.62 (Administrative Procedure Act) but not before the 18 effective date of the law implemented by the regulation. 19 * Sec. 6. AS 08.57.010, 08.57.050, 08.57.110, 08.57.300, and 08.57.310, enacted by sec. 1 20 of this Act, and the amendment of AS 18.56.300(b), made by sec. 3 of this Act, take effect 21 July 1, 2000. 22 * Sec. 7. Except as provided in sec. 6 of this Act, this Act takes effect immediately under 23 AS 01.10.070(c).