SB 1007

1. SB 1007 SB 1007 What does it mean to us?

2. What are the changes? • The bill gives the Board authority to increase CE requirements up to 20 hours per year. • Requires an additional 4 hours of education for three years (three 16 hour mandatory classes) focusing on reporting and inspection techniques • Establishes a formal pre licensing education program- up to 200 hours- and eliminates the Associate program • Requires anyone coming in under the contractor’s, architect or engineer’s exemption to wait at least 6 months before taking the HI exam and requires them to keep the enabling license • Requires all Inspectors to carry general liability insurance- with parameters to be established by the Board

3. What else does it do? • Increases the required net assets from $5,000 to $17,500, while providing alternatives for those lacking sufficient assets (This part is being changed!) • The bill changes Summary page requirements and puts the right to include safety items into law • Discourages Inspectors from writing up building code violations • Requires anyone convicted of a criminal offense to report that fact to the Board within 6 weeks • Requires anyone reactivating an inactive license to make up the CE missed, up to 24 hours • Prohibits someone from taking the licensing exam more than once every 6 months

4. Section 143-151.64(a) • Annual continuing education hour requirements shall be determined by the Board, but shall not be more less than 12 credit hours and no more than 20 hours.

5. Section 1.2 • The North Carolina Home Inspector Licensure Board has the authority under G.S. 143-151.49(a)(12) and G.S. 143-151.55(a) to establish continuing education requirements as a condition of licensure renewal. Under that authority, the Board must require home inspectors and associate home inspectors licensed on or before September 30, 2011, to complete a continuing education program that focuses on inspection techniques and reporting requirements. The program must consist of 48 hours of instruction, composed of three separate 16 hour segments. A separate segment must be offered each renewal period. A licensee must complete one segment of the program for each of the three license renewal periods beginning with the license renewal period that starts on October 1, 2011. A license must complete the three-year program by October 1, 2014. Completion of each program segment satisfies the continuing education requirements under G.S. 143-151.64 for the renewal period in which it is completed. The Board may not allow continuing education credit for an unapproved course under G.S. 143-151.64(c) to be substituted for the continuing education requirements of this section.

6. 143-151.49 • (12) Establish continuing education requirements for persons licensed under this Article. • 27 (13) Adopt rules necessary to implement this Article. • 28 (b) Exam. Education Requirements. The education program adopted by the Board may not consist of more than 200 hours of instruction. The instruction may include field training, classroom instruction, distance learning, peer review, and any other educational format approved by the Board."

7. 143-151.51 • (a) Licensure Eligibility. -- To be eligible to be licensed as a home inspector, an applicant must do all of the following: • (1) Submit a completed application to the Board upon a form provided by the Board. • (2) Pass a licensing examination prescribed by the Board. • (3) Deleted (old financial requirements) • (4) Pay the applicable fees. • (5) Meet one of the following three conditions: • a. Have a high school diploma or its equivalent, and satisfactorily complete an education program approved by the Board. The program must be completed within three years of the date the applicant submits an application for licensure under this section. • b. Have education and experience the Board considers to be equivalent to that required by subpart a. sub-subdivision a of this subdivision. • c. Be licensed for at least six months as a general contractor under Article 1 of Chapter 87 of the General Statutes, as an architect under Chapter 83A of the General Statutes, or as a professional engineer under Chapter 89C of the General Statutes. A person qualifying under this sub-subdivision must remain in good standing with the person's respective licensing board."

8. 143-151.51 (cont.) • (b) License. – The Board must issue a license to an applicant that meets the conditions of licensure under subsection (a) of this section and all of the insurance requirements of this subsection. • (1) General liability insurance in the amount of two hundred fifty thousand dollars ($250,000), which insurance may be individual coverage or coverage under an employer policy, with coverage parameters established by the Board. • (2) One of the following: • a. Minimum net assets in an amount determined by the Board, which amount may not be less than seventeen thousand five hundred dollars ($17,500) nor more than thirty-five thousand dollars ($35,000). This is being changed! • b. A bond in an amount determined by the Board, which amount may not be less than seventeen thousand five hundred dollars ($17,500) nor more than thirty-five thousand dollars ($35,000). • c. Errors and omissions insurance in the amount of two hundred fifty thousand dollars ($250,000), which insurance may be individual coverage or coverage under an employer policy, with coverage parameters established by the Board.

9. PART III. ASSOCIATE HOME INSPECTOR LICENSURE SUNSET • 3.1. The Board may not accept an application for licensure as an associate home inspector after April 1, 2011. The Board may not issue a license for an associate home inspector on or after October 1, 2011. The Board may not renew an associate home inspector license on or after October 1, 2013. • SECTION 3.2. Notwithstanding G.S. 143-151.51, as rewritten by Section 2.2 of this act, a person who holds a license as an associate home inspector on October 1, 2011, may satisfy the education program requirement for licensure as a home inspector by being engaged as a licensed associate home inspector for one year and completing 100 home inspections for compensation. A person licensed as a home inspector under this section must complete the continuing education requirements of Section 1.2 of this act. An associate home inspector may take one or more of the program segments required under Section 1.2 of this act while licensed as an associate home inspector.

10. G.S. 143-51.58-1 • SECTION 4.1. is amended by adding two new subsections to read: • "(a1) Summary Page. – A written report provided under subsection (a) of this section for a prepurchase home inspection of three or more systems must include a summary page that contains the information required by this subsection. All other subject matters pertaining to the home inspection must appear in the body of the report. The summary page must contain the following statement: 'This summary page is not the entire report. The complete report may include additional information of interest or concern to you. It is strongly recommended that you promptly read the complete report. For information regarding the negotiability of any item in this report under the real estate purchase contract, contact your North Carolina real estate agent or an attorney.' • The summary page must describe any system or component of the home that does not function as intended, allowing for normal wear and tear. The summary page may describe the following: • (1) Any system or component that, based upon documented visible evidence, either requires subsequent examination because the system or component appears not to function as intended or that requires further investigation by a specialist. • (2) Any system or component that poses a safety concern.

11. G.S. 143-51.58-1 (cont.) • (a2) State Building Code. – If a licensee includes a deficiency in the written report of a home inspection that is stated as a violation of the North Carolina State Residential Building Code, the licensee must do all of the following: • (1) Determine the construction date or dates of the home. • (2) Determine the State, and municipal building codes in effect at the time of construction. • (3) Conduct the home inspection using the building codes in effect at the time of the construction."

12. 143-151.54 • (b) Report Criminal Convictions and Disciplinary Actions. – A license holder who is convicted of any felony or misdemeanor or is disciplined by any governmental agency in connection with any other occupational or professional license shall file with the Board a written report of the conviction or disciplinary action within 60 days of the final judgment, order, or disposition of the case."

13. SECTION 5.2. G.S. 143-151.55 • (C) ….. To change a license from inactive status to active status, the license holder must complete the same number of continuing education credit hours that would have been required of the license holder had the license holder maintained an active license. The number of continuing education credit hours required to return an inactive license to active status shall not exceed 24 credit hours.

14. SECTION 5.3. G.S. 143-151.57(b) • ….. An individual may take the examination only once every 180 days."

15. What about the Board? • NCLHIA and NC ASHI were asked by the Board to lobby for the pre licensing education program last year. We both agreed to do so • The Board DID NOT vote to oppose the full bill, only four sections. Motion: The North Carolina Home Inspector Licensure Board (the Board) recognizes the positive aspects of SB 1007, but wants to inform the NC Legislature of the Board's position on the following four items/sections.

16. 1. Contractor’s License exemption • 1. The Board desires removal of the proposed exemption to complete the approved pre-licensing education program provided to general contractors, architects, and professional engineers. • WE AGREE! Unfortunately the NC-HBA does not, and promised to kill the pre licensing section of this bill if their exemption was removed or altered. The Board has negotiated with them for 2 years and got nothing. NCLHIA and NC ASHI, working together, got more concessions in 6 weeks of negotiations than the Board did in 2 years!

17. 2. Summary Page • The Board desires removal of the proposed "Summary Page" section [143-151-.58. (a1)]. • WE DISAGREE! NCLHIA remembers the fight we were in 2 years ago when political appointees to the Board tried to take away the right to report safety items in the summary. Today the Board is in our favor, but they are all political appointees and can be changed tomorrow. We believe putting this into legislation is the best way to protect our clients and our industry in an uncertain future.

18. 3. Building code • The Board desires removal of the proposed "North Carolina State Building Code" section [143-151-58. (a2)]. • As we said earlier, NCLHIA believes this probably would be better in board rules, but they have had 13 years to do something with it and have not. Since we do not believe it will make much difference to our members whether this is in rules or legislation, given our limited resources we do not think this is worth fighting over.

19. 4. High School Diploma • The Board desires that the requirement to have a high school diploma or its equivalent remain as one of the conditions to be licensed as a home inspector. • NCLHIA agrees, and we got this section of the bill changed to reflect the desires of our members, the Board, and the interest of the general public.