SENATE FILE 497

BY  COMMITTEE ON STATE GOVERNMENT

(SUCCESSOR TO SF 26)

(As Amended and Passed by the Senate 2011-03-21)

A BILL FOR

An Act establishing a home inspector registration program, providing penalties, and including effective date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

   Section 1.  NEW SECTION  104.1  Title.
   This chapter may be known and cited as the “Iowa Home Inspector Registration and Bonding Act”.
   Sec. 2.  NEW SECTION  104.2  Definitions.
   As used in this chapter, unless the context otherwise requires:
   1.  “Registrant” means a person who registers under this chapter.
   2.  “Department” means the Iowa department of public safety.
   3.  “Governmental subdivision” means any city, county, or combination thereof.
   4.  “Home inspection” means the examination and evaluation of the exterior and interior components of residential real property, which includes the inspection of any two or more of the following components of residential real property in connection with or to facilitate the sale, lease, or other conveyance of, or the proposed sale, lease, or other conveyance of, residential real property:
   a.  Heating, ventilation, or air conditioning system.
   b.  Plumbing system.
   c.  Electrical system.
   d.  Structural composition.
   e.  Foundation.
   f.  Roof.
   g.  Masonry structure.
   h.  Any other residential real property component established by rule under this chapter.
   5.  “Home inspector” means a person who, for compensation either direct or indirect, performs home inspections.
   6.  “Residential real property” means real property that is an owner-occupied single-family or two-family dwelling located in this state and occupied or used or intended to be occupied or used for residential purposes, including an interest in any real property covered under chapter 499B.
   Sec. 3.  NEW SECTION  104.3  Rules.
   The department shall adopt rules necessary to implement this chapter.
   Sec. 4.  NEW SECTION  104.4  Fees.
   1.  A registrant under this chapter shall pay an annual registration fee of fifty dollars to the department.
   2.  All fees collected under this chapter shall be considered repayment receipts as defined in section 8.2 and shall be retained by the department and shall be used for any of the department’s duties under this chapter. Moneys retained by the department pursuant to this section are not subject to transfer or reversion to the general fund of the state.
   Sec. 5.  NEW SECTION  104.5  Registration required —— exception.
   1.  A person shall not perform a home inspection without being registered under this chapter. 
   2.  Following an initial registration, each registrant shall file an annual registration renewal with the department.
   3.  A person shall not engage in the business of home inspections unless at all times a registered home inspector is employed by the person and is actively in charge of performing the home inspections. An individual who performs home inspections pursuant to a business operated as a sole proprietorship shall be a registered home inspector.
   4.  The registration requirements of this chapter shall not apply to any of the following:
   a.  An employee of any unit of state or local government, including but not limited to cities, counties, or school corporations, performing home inspections while acting within the scope of the government employee’s employment.
   b.  An employee or an agent of an insurer organized or operating under chapter 515, 518, or 518A, while acting within the scope of the employee’s or agent’s employment or agency.
   c.  Real estate brokers or salespersons as defined in chapter 543B.
   d.  Professional engineers licensed under chapter 542B.
   e.  Architects registered pursuant to chapter 544A.
   f.  Certified real estate appraisers under chapter 543D.
   g.  An employee or agent of a financial institution, as defined in section 527.2, subsection 9, while acting within the scope of the employee’s or agent’s employment or agency.
   Sec. 6.  NEW SECTION  104.6  Change of residence. 
   If a person registered to perform home inspections under this chapter changes the person’s residence or place of practice, the person shall so notify the department.
   Sec. 7.  NEW SECTION  104.7  Local licensing or registration requirements.
   1.  The provisions of this chapter regarding the registration of home inspectors shall not be construed to supersede or preempt home inspector licensing or registration provisions of a governmental subdivision. 
   2.  Nothing in this chapter shall prohibit a governmental subdivision from assessing and collecting inspection fees related to inspections performed by a registered home inspector.
   Sec. 8.  NEW SECTION  104.8  Insurance and surety bond requirements.
   1.  A person who registers or renews a registration pursuant to this chapter shall, prior to approval of the registration or renewal by the department, provide evidence of a public liability insurance policy and surety bond in an amount of not less than fifteen thousand dollars.
   2.  If the registrant performs home inspections individually through a business conducted as a sole proprietorship, the registrant shall personally obtain the insurance and surety bond required by this section. If the registrant is engaged in the home inspection business as an employee or owner of a legal entity, the insurance and surety bond required by this section shall be obtained by the entity and shall cover all home inspections performed by the entity. 
   3.  The insurance and surety bond shall be written by an entity licensed to do business in this state and each registered home inspector shall maintain on file with the department a certificate evidencing that the insurance or surety bond shall not be canceled without the entity first giving fifteen days’ written notice to the department.
   Sec. 9.  NEW SECTION  104.9  Deceptive representations of registration —— violations.
   1.  Only a person who is duly registered pursuant to this chapter may represent in connection with the sale of home inspection services the fact that the person is registered as a home inspector in the state of Iowa.
   2.  A violation of this chapter or a rule adopted pursuant to this chapter is an unlawful practice pursuant to section 714.16. The provisions of section 714.16, including but not limited to provisions relating to investigation, injunctive relief, and penalties, shall apply to this chapter.
   Sec. 10.  Section 558A.4, subsection 2, Code 2011, is amended to read as follows:
   2.  The disclosure statement may include a report or written opinion prepared by a home inspector registered under chapter 104 or a person qualified to make judgment based on education or experience, as provided by rules adopted by the commission, including but not limited to a land surveyor licensed pursuant to chapter 542B, a geologist, a structural pest control operator licensed pursuant to section 206.6, or a building contractor. The report or opinion on a matter within the scope of the home inspector’s or person’s practice, profession, or expertise shall satisfy the requirements of this section or rules adopted by the commission regarding that matter required to be disclosed. If the report or opinion is in response to a request made for purposes of satisfying the disclosure statement, the report or opinion shall indicate which part of the disclosure statement the report or opinion satisfies.
   Sec. 11.  Section 558A.6, subsection 2, Code 2011, is amended to read as follows:
   2.  The home inspector or person submitting a report or opinion within the scope of the home inspector’s or person’s practice, profession, or expertise, as provided in section 558A.4, for purposes of satisfying the disclosure statement, shall not be liable under this chapter for any matter other than a matter within the home inspector’s or person’s practice, profession, or expertise, and which is required by the disclosure statement, unless the home inspector or person failed to use care ordinary in the home inspector’s or person’s profession, practice, or area of expertise in preparing the information.
   Sec. 12.  EFFECTIVE DATE.  This Act takes effect January 1, 2012.