46th legislature - STATE OF NEW MEXICO - first session, 2003
RELATING TO PROFESSIONAL AND VOCATIONAL LICENSING; ENACTING THE HOME INSPECTOR LICENSING ACT; CREATING A FUND; PROVIDING PENALTIES; MAKING AN APPROPRIATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:
Section 1. SHORT TITLE.--This act may be cited as the "Home Inspector Licensing Act".
Section 2. PURPOSE.--The purpose of the Home Inspector Licensing Act is to provide for regulation and supervision of the business of home inspection and evaluation, including assessing the condition of domestic real estate, providing comprehensive analysis of the condition of property and providing necessary evidence of condition to clients.
Section 3. DEFINITIONS.--As used in the Home Inspector Licensing Act:
A. "board" means the home inspector licensing board;
B. "client" means a person who engages or seeks to engage the services of a home inspector for the purpose of obtaining inspection of and a written home inspection report upon the condition of a residential building;
C. "compensation" means direct or indirect payment, including the expectation of payment, whether or not actually received;
D. "component" means a readily accessible and observable aspect of a system, such as a floor or wall, but not individual pieces, such as boards or nails where many similar pieces make up a system;
E. "fund" means the home inspector fund;
F. "home inspection" means a noninvasive, nondestructive inspection for the purposes of providing a professional opinion of the condition of a building and its carports and garages, any reasonable accessible installed components and the operation of the building systems, including the controls normally operated by the owner of a residential building, such as the heating system, cooling system, plumbing system, structural components, foundation, roof covering, exterior and interior components and site aspects as they affect the building;
G. "home inspection report" means a written report prepared for compensation and issued after a home inspection that includes:
(1) information on the systems and components inspected that are significantly deficient or are near the end of their service lives;
(2) the reason why a system or component is significantly deficient or near the end of its service life;
(3) the home inspector's recommendations to correct or monitor the deficiency; and
(4) any systems and components designated for inspection in the standards of practice that were not inspected and the reason they were not inspected;
H. "home inspector" means a person who has a license pursuant to the Home Inspector Licensing Act as a home inspector and who engages in the business of performing home inspections and writing home inspection reports;
I. "qualified trainee" means a candidate who wishes to become a home inspector and who has met the requirements set forth in the rules of the board;
J. "readily accessible" means available for visual inspection without moving personal property, dismantling, destructive measures or any action that likely will involve risk to persons or property;
K. "residential building" means a structure consisting of from one to four family dwelling units;
L. "significantly deficient" means a system or component that is unsafe or not functioning;
M. "society" means the American society of home inspectors;
N. "system" means a combination of interactive or interdependent components assembled to carry out one or more functions; and
O. "technically exhaustive" means an investigation that involves dismantling, the extensive use of advanced techniques, measurements, instruments, testing, calculations or other means.
Section 4. BOARD CREATED--COMPOSITION.--
A. The "home inspector licensing board" is created. The board is comprised of five members appointed by the governor.
B. One board member shall be a person with no interest in or connection to the home inspection business, and four board members shall be home inspectors:
(1) who have actively engaged in the practice of home inspections for at least four years immediately preceding their appointment;
(2) who have performed a minimum of five hundred home inspections for compensation;
(3) who demonstrate that they have passed the national home inspector examination offered by the examination board of professional home inspectors;
(4) who are representative of a widely diverse and geographically dispersed cross-section of the state's population; and
(5) no two of whom are from the same county.
C. Board members shall be appointed to four-year terms and shall serve until their successors are appointed and qualified.
D. The board shall ensure continuity with staggered terms, and at the first meeting of the board, two members shall be selected by lot to serve two-year terms. Thereafter, all members shall serve four-year terms.
E. A vacancy on the board shall be filled by appointment by the governor for the unexpired term within sixty days of the vacancy.
Section 5. DUTIES OF THE BOARD.--The board shall:
A. adopt rules and procedures necessary to administer and enforce the provisions of the Home Inspector Licensing Act;
B. issue and renew licenses to home inspectors pursuant to the provisions of that act;
C. suspend, revoke or deny the license of a home inspector;
D. establish standards for the training and experience requirements of home inspectors and for continuing education requirements;
E. adopt and publish a code of ethics and standards of practice for home inspectors, which may be the code of ethics and standards of practice set forth by the society;
F. prescribe or change the fees charged for examinations, licenses, renewals and other services of the board; and
G. perform other functions and duties as may be necessary to carry out the provisions of the Home Inspector Licensing Act.
Section 6. BOARD--ORGANIZATION--MEETINGS.--
A. The board shall organize itself by electing a chair, vice chair and secretary from among its members. A majority of the board constitutes a quorum and may exercise all powers and duties established by the provisions of the Home Inspector Licensing Act.
B. The board shall keep a record of its proceedings and a register of persons licensed or seeking licensing as home inspectors, showing the name and place of business of each, and shall retain all records and applications submitted to the board pursuant to the Home Inspector Licensing Act.
C. The board shall meet not less frequently than once each calendar quarter at such place as may be designated by the board, and special meetings may be held on five days' written notice to each of the members by the chair.
Section 7. REIMBURSEMENT AND EXPENSES.--The board may appoint such committees of the board and employ such persons to assist the board as may be necessary. Each member of the board shall receive per diem and mileage as provided in the Per Diem and Mileage Act and shall receive no other perquisite, compensation or allowance. Compensation for employees, any necessary supplies and equipment shall be paid from the fund.
Section 8. LICENSE REQUIRED--EXCEPTIONS.--
A. It is unlawful for a person to provide, or represent himself as able to provide, a home inspection unless licensed in accordance with the provisions of the Home Inspector Licensing Act.
B. A person, unless licensed by the board, shall not:
(1) assume any title, designation or abbreviation likely to create the impression of a licensed home inspector; or
(2) use the term "state licensed" or "licensed" to refer to any inspection prepared by him.
C. A business entity shall not provide home inspection services unless each of the home inspectors employed by the business entity is licensed in accordance with the provisions of the Home Inspector Licensing Act.
D. A business entity shall not use, in connection with the name or signature of the business entity, the title "home inspectors" to describe the business entity's services, unless each of the home inspectors employed by the business entity is licensed in accordance with the provisions of the Home Inspector Licensing Act.
E. The requirement of licensing does not apply to a state, county or municipal employee who, as part of his duties, is required to perform home inspections. The requirement does not apply to a person engaged with a bank solely to monitor progress on the construction of a residential building or to a person who is employed as a residential property manager for a residential building and whose duties and responsibilities include inspecting the residential building or performing an inspection on the building if the person does not receive separate compensation for the inspection work.
F. A qualified trainee, pursuant to rules of the board, under the supervision of a home inspector, may provide a home inspection while in training without a license. The board may, in its discretion, provide a provisional license to a qualified trainee.
Section 9. QUALIFICATION FOR LICENSING.--
A. A home inspector license shall be granted only to a person who is deemed by the board to be of good repute and competent to perform home inspections.
B. An applicant for a home inspector license shall be a resident of New Mexico, except as otherwise provided in the Home Inspector Licensing Act, who has reached the age of majority and who has received a high school diploma or its equivalent.
C. An applicant for a home inspector license shall have completed a course of study that covers all the components of a residential building, including the heating system, cooling system, plumbing system, electrical system, structural components, foundation, exterior and interior components and site aspects as they affect the building.
D. An applicant shall acquire the required training and meet the experience requirements as established by the board and shall pass the national home inspector examination offered by the examination board of professional home inspectors. An applicant who passed the examination before the effective date of the Home Inspector Licensing Act shall be deemed to have completed the requirements of this subsection.
E. A qualified trainee under the supervision of a home inspector may perform a home inspection and submit a home inspection report, which shall be approved by the home inspector, as provided in the rules of the board.
Section 10. INTERIM LICENSING.--Until July 1, 2004, to be eligible for a license as a home inspector, an applicant shall:
A. be of good moral character;
B. have successfully completed high school or its equivalent;
C. have been engaged in the practice of home inspection for compensation for not fewer than two years prior to the effective date of the Home Inspector Licensing Act;
D. have performed not fewer than two hundred fifty home inspections for compensation; and
E. have passed the national home inspector examination offered by the examination board of professional home inspectors.
Section 11. ISSUANCE AND RENEWAL OF LICENSES.--
A. A license is renewable every three years with payment of the applicable fees on or before April 30. During the first year of operation, the board may issue licenses for one-, two- or three-year terms for the purpose of coordinating continuing education requirements with license renewal requirements.
B. An application for renewal shall be accompanied by proof of compliance with continuing education requirements.
C. The board shall renew a license in the absence of any reason or condition that might warrant the refusal of the license.
D. The board may renew an expired license upon application, payment of the annual renewal fee, submission of proof of continuing education requirements and payment of a reinstatement fee in addition to any other fee permitted under the Home Inspector Licensing Act, provided that the board may treat the former licensee as a new applicant and require reexamination as a condition for reissuance of the license.
E. If during a period of one year from the date the license expires the licensee has been on active duty with the military service, reexamination shall not be required by the board within the three-month period following return to the state, and upon application the license shall be renewed. A copy of military orders shall accompany the application.
Section 12. DENIAL, SUSPENSION OR REVOCATION OF A LICENSE.--
A. The board shall deny, suspend or revoke a license if the applicant:
(1) procured or attempted to procure a license by knowingly making a false statement or submitting false information or through any form of fraud or misrepresentation;
(2) refused to provide complete information in response to a question in an application for licensing or failed to meet the minimum qualifications established by the Home Inspector Licensing Act;
(3) paid money, other than as provided for in the Home Inspector Licensing Act, to any member or employee of the board to procure a license;
(4) was convicted of a crime that is substantially related to the qualifications, functions or duties of a person providing home inspection services;
(5) committed an act involving dishonesty, fraud or misrepresentation or by omission engaged in a dishonest or fraudulent act or misrepresentation with the intent to substantially benefit the license holder or another person or with the intent to substantially injure another person;
(6) willfully disregarded or violated any provisions of the Home Inspector Licensing Act or the rules of the board adopted pursuant to that act;
(7) accepted a home inspection assignment when the employment itself was contingent upon reporting a predetermined result or opinion or when the fee to be paid for the home inspection report was contingent upon the opinion or conclusion reached or upon the consequences resulting from the home inspection and home inspection report;
(8) suffered the entry of a final civil judgment on the grounds of fraud, misrepresentation or deceit in making an inspection and submitting a false home inspection report; or
(9) committed any other conduct that is related to home inspections and that constitutes or demonstrates bad faith, untrustworthiness, impropriety, fraud, dishonesty or any unlawful act.
B. The board shall refuse to issue or renew a license and shall suspend or revoke a license when the board determines that the applicant or licensee in the performance of home inspections has:
(1) repeatedly failed to observe one or more of the standards for the performance of home inspection as set forth in the rules adopted pursuant to the Home Inspector Licensing Act;
(2) repeatedly failed or refused, without good cause, to exercise reasonable diligence in performing a home inspection or issuing a home inspection report;
(3) repeatedly been negligent or incompetent in performing a home inspection or issuing a home inspection report; or
(4) violated any confidential matter obtained in the performance of a home inspection.
C. An action of the board relating to the issuance, suspension or revocation of a license shall be governed by the provisions of the Uniform Licensing Act. The board shall participate in any hearings required or conducted by the board pursuant to the Uniform Licensing Act.
D. The provisions of the Criminal Offender Employment Act shall govern any consideration of criminal records required or permitted under the Home Inspector Licensing Act.
E. Nothing in the Home Inspector Licensing Act shall be construed to preclude any other remedies otherwise available under common law or statutes of this state.
Section 13. STANDARDS OF PROFESSIONAL HOME INSPECTION PRACTICE.--
A. A home inspector shall comply with generally accepted standards of professional home inspection practice and generally accepted ethical rules to be observed by a home inspector. Generally accepted standards of professional home inspection practice shall be as currently evidenced by the society standards and adopted as rules by the board.
B. The home inspector is not required to make a determination on the following, except as may otherwise be required by law:
(1) the condition of systems or components that are not readily accessible;
(2) the strength, adequacy, effectiveness or efficiency of a system or component;
(3) the causes of a condition or deficiency;
(4) the materials, methods or costs of corrections;
(5) future conditions, including failure of systems and components;
(6) the suitability of the property for any specialized use;
(7) compliance with regulatory requirements, including codes, rules, laws and ordinances;
(8) the market value of the property or its marketability;
(9) the advisability of the purchase of the property;
(10) the presence of potentially hazardous plants or animals, including wood-destroying organisms or diseases harmful to humans;
(11) the presence of any environmental hazards, including toxins, carcinogens, noise and contaminants in soil, water or air;
(12) the effectiveness of any system installed or methods used to control or remove suspected hazardous substances;
(13) the operating costs of systems or components; and
(14) the acoustical properties of any system or component.
C. Rules adopted by the board shall identify items and actions that will not be offered by home inspectors, items that a home inspector is not required to operate and, when entry is not required by an inspector, items that a home inspector is not required to inspect and actions that a home inspector is not required to perform. Copies of the rules containing the items shall be disseminated by the board.
Section 14. FEES.--The board may establish and collect fees for the following, but not to exceed:
A. one hundred dollars ($100) for an application fee for licensure;
B. one hundred dollars ($100) for examination for licensure;
C. one hundred fifty dollars ($150) for a triennial license;
D. twenty-five dollars ($25.00) for each duplicate license issued because of loss or destruction, with an affidavit as to its loss or destruction; and
E. any fees to cover reasonable and necessary administrative expenses.
Section 15. HOME INSPECTOR FUND CREATED--DISPOSITION--METHOD OF PAYMENT.--
A. The "home inspector fund" is created in the state treasury. The fund shall be administered by the board. All fees collected by the board pursuant to the Home Inspector Licensing Act shall be deposited with the state treasurer to the credit of the fund. Income earned on investment of the fund shall be credited to the fund.
B. Money in the fund shall be used by the board to meet necessary expenses incurred in the enforcement of the provisions of the Home Inspector Licensing Act, in carrying out the duties imposed by that act and for the promotion of education and standards of home inspectors in this state. Payments out of the fund shall be on vouchers issued and signed by the person designated by the board upon warrants drawn by the department of finance and administration. All unexpended or unencumbered balances remaining at the end of each fiscal year shall remain in the fund for use in accordance with the provisions of that act.
Section 16. CONTINUING EDUCATION REQUIREMENTS.--The board shall adopt rules providing for continuing education programs that offer courses in home inspection practices and techniques. The rules shall require that a home inspector, as a condition to renewal of his license, shall successfully complete twenty classroom hours of instruction every three years in courses approved by the board.
Section 17. NONRESIDENT APPLICANTS--RECIPROCITY.--
A. The board shall issue a license to a nonresident home inspector provided that the applicant's resident state's requirements for licensing are the same or substantially similar to the requirements set forth in the Home Inspector Licensing Act. In the event that the other state's requirements are not similar or cannot be verified, a qualifying nonresident may become a licensed home inspector in this state by conforming to all the conditions of the Home Inspector Licensing Act. An examination taken in another state is acceptable in New Mexico provided the examination was at the appropriate level and approved by the society. If it is beneficial to the New Mexico-licensed home inspectors, the board may negotiate agreements with other states allowing reciprocity. The license shall be issued upon payment of the application fee, verification that the applicant has complied with his resident state's current education requirements and filing with the board of a license history with verification of good standing by the licensing board of the other state.
B. The nonresident applicant shall file an irrevocable consent that suits and actions may be commenced against him in the proper court of any county of this state in which a cause of action may arise from his actions as a home inspector or in which the plaintiff may reside by service of any processes or pleadings authorized by the laws of New Mexico on the board, with the consent stipulating and agreeing that such service of processes or pleadings on the board shall be taken and held in all courts to be valid and binding as if personal service has been made upon the applicant in New Mexico. In case a process or pleading mentioned in the case is served upon the board, it shall be by duplicate copies, one of which shall be filed in the office of the board and the other immediately forwarded by registered mail to the nonresident New Mexico-licensed home inspector to whom the processes or pleadings are directed.
Section 18. PROHIBITED ACTS.--The board may make investigations or conduct hearings to determine whether a violation of the Home Inspector Licensing Act has occurred and may deny, suspend or revoke a home inspector license upon proof to the satisfaction of the board that the holder has participated in an unfair business practice. It is an unfair business practice for a home inspector, a company that employs a home inspector or a company that is controlled by a company that also has a financial interest in a company employing a home inspector to do any of the following:
A. perform or offer to perform for an additional fee any repairs to a structure on which the home inspector or the home inspector's company has prepared a home inspection report in the past twelve months, except that a home protection company that is affiliated with or that retains a home inspector does not violate this section if it performs repairs pursuant to a claim made under the home protection contract;
B. inspect for a fee a property in which the home inspector, or the home inspector's company, has any financial interest or any interest in the transfer of the property;
C. offer or deliver compensation, inducement or reward to the owner of the inspected property or the broker or agent for the referral of any business to the home inspector or the home inspection company; or
D. accept an engagement to make a home inspection or prepare a home inspection report in which the employment itself or the fee payable for the inspection is contingent upon the conclusions in the home inspection report, pre-established findings or the close of escrow.
Section 19. REGISTRY OF COMPLAINTS.--
A. In lieu of proceeding with an investigation, the board may place in a registry a copy of a complaint received by the board against a home inspector, the home inspector's response to the complaint and a copy of records of the board concerning the complaint no later than thirty days after the date on which the board receives a complaint alleging that a home inspector has engaged in conduct that is grounds for discipline. The board shall provide the home inspector with a copy of the complaint.
B. After receiving a copy of the complaint, the home inspector may place in the registry a statement describing the home inspector's opinion of the correctness or relevance of the information contained in the complaint. The board shall make the complaint and the home inspector's response to the complaint available to the public.
C. The board shall remove all complaints against and other information concerning a home inspector from the registry if, for a period of two years from the date of the most recent complaint filed in the registry, no further complaints have been filed against the home inspector.
D. Unworthy or frivolous complaints shall be discarded and shall not be retained in the registry.
Section 20. LIABILITY OF HOME INSPECTORS.--
A. An action to recover damages for any act or omission of a home inspector relating to a home inspection that he conducts shall be commenced within one year after the date that the home inspection is completed.
B. Only a client and no other party shall have recourse to action to recover damages arising from a home inspection or a home inspection report.
Section 21. BOARD-IMPOSED INSURANCE OR BOND REQUIREMENT.--The board may, as a condition of removing a limitation on a license or of reinstating a license that has been suspended or revoked, require the home inspector to:
A. obtain insurance against loss, expense and liability resulting from errors and omissions or neglect in the performance of services as a home inspector; or
B. file with the board a bond that is furnished by a company authorized to do business in this state and is in the amount approved by the board.
Section 22. PENALTY--INJUNCTIVE RELIEF.--
A. A person who violates the provisions of the Home Inspector Licensing Act is guilty of a misdemeanor and shall be punished by a fine of five hundred dollars ($500) or by imprisonment for not more than six months, or both.
B. In the event that a person has engaged in or proposes to engage in an act or practice violating the Home Inspector Licensing Act, the attorney general or the district attorney of the judicial district in which the person resides or the judicial district in which the violation has occurred or will occur shall, upon application of the board, maintain an action in the name of the state to prosecute the violation or to enjoin the proposed act or practice.
Section 23. TERMINATION OF AGENCY LIFE--DELAYED REPEAL.--The home inspector licensing board is terminated on July 1, 2013 pursuant to the Sunset Act. The board shall continue to operate according to the provisions of the Home Inspector Licensing Act until July 1, 2014. Effective July 1, 2014, the Home Inspector Licensing Act is repealed.