BILL NUMBER: SB 258 CHAPTERED
BILL TEXT
CHAPTER 338
FILED WITH SECRETARY OF STATE AUGUST 19, 1996
APPROVED BY GOVERNOR AUGUST 17, 1996
PASSED THE SENATE AUGUST 5, 1996
PASSED THE ASSEMBLY JULY 11, 1996
AMENDED IN ASSEMBLY JUNE 6, 1996
AMENDED IN ASSEMBLY APRIL 8, 1996
AMENDED IN SENATE JUNE 20, 1995
AMENDED IN SENATE JUNE 12, 1995
AMENDED IN SENATE MAY 11, 1995
AMENDED IN SENATE MAY 2, 1995
AMENDED IN SENATE APRIL 17, 1995
INTRODUCED BY Senator O'Connell
FEBRUARY 8, 1995
An act to add Chapter 9.3 (commencing with Section 7195) to
Division 3 of the Business and Professions Code, relating to home
inspectors.
LEGISLATIVE COUNSEL'S DIGEST
SB 258, O'Connell. Home inspectors.
Existing law does not regulate persons who perform home
inspections for a fee.
This bill would define terms related to paid home inspections,
establish a standard of care for home inspectors, and prohibit
certain inspections in which the inspector or the inspector's
employer, as specified, has a financial interest. The bill would
also provide that contractual provisions seeking to waive the
statutory duty of care or limit the liability of a home inspector to
the cost of the home inspection report are contrary to public policy
and invalid. The bill would provide that the time for commencement
of a legal action for breach of duty arising from a home inspection
report shall not exceed 4 years from the date of the inspection.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. It is the intent of the Legislature in enacting this
act to assure that consumers of home inspection services can rely
upon the competence of home inspectors. It is the intent of the
Legislature that, in ascertaining the degree of care that would be
exercised by a reasonably prudent home inspector pursuant to Section
7196 of the Business and Professions Code, the court may consider the
standards of practice and code of ethics of the California Real
Estate Inspection Association, the American Society of Home
Inspectors, or other nationally recognized professional home
inspection associations.
SEC. 2. Chapter 9.3 (commencing with Section 7195) is added to
Division 3 of the Business and Professions Code, to read:
CHAPTER 9.3. HOME INSPECTORS
7195. For purposes of this chapter, the following definitions
apply:
(a) "Home inspection" is a noninvasive, physical examination,
performed for a fee in connection with a transfer, as defined in
subdivision (e), of real property, of the mechanical, electrical, or
plumbing systems or the structural and essential components of a
residential dwelling of one to four units designed to identify
material defects in those systems, structures and components. "Home
inspection" also includes any consultation regarding the property
that is represented to be a home inspection or any confusingly
similar term.
(b) A "material defect" is a condition that significantly affects
the value, desirability, habitability, or safety of the dwelling.
Style or aesthetics shall not be considered in determining whether a
system, structure, or component is defective.
(c) A "home inspection report" is a written report prepared for a
fee and issued after a home inspection. The report clearly describes
and identifies the inspected systems, structures, or components of
the dwelling, any material defects identified, and any
recommendations regarding the conditions observed or recommendations
for evaluation by appropriate persons.
(d) A "home inspector" is any individual who performs a home
inspection.
(e) "Transfer" is a transfer by sale, exchange, installment land
sale contract, as defined in Section 2985 of the Civil Code, lease
with an option to purchase, any other option to purchase, or ground
lease coupled with improvements, of real property or residential
stock cooperative, improved with or consisting of not less than one
nor more than four dwelling units.
7196. It is the duty of a home inspector who is not licensed as a
general contractor, structural pest control operator, or architect,
or registered as a professional engineer to conduct a home inspection
with the degree of care that a reasonably prudent home inspector
would exercise.
7196.1. (a) Nothing in this chapter shall be construed to allow
home inspectors who are not registered engineers to perform any
analysis of the systems, components, or structural integrity of a
dwelling that would constitute the practice of civil, electrical, or
mechanical engineering, or to exempt a home inspector from Chapter 3
(commencing with Section 5500), Chapter 7 (commencing with Section
6700), Chapter 9 (commencing with Section 7000), or Chapter 14
(commencing with Section 8500) of Division 3.
(b) This chapter does not apply to a registered engineer, licensed
land surveyor, or licensed architect acting pursuant to his or her
professional registration or license, nor does it affect the
obligations of a real estate licensee or transferor under Article 1.5
(commencing with Section 1102) of Chapter 2 of Title 4 of Part 3 of
Division 2 of, or Article 2 (commencing with Section 2079) of Chapter
3 of Title 6 of Part 4 of Division 3 of, the Civil Code.
7197. It is an unfair business practice for a home inspector, a
company that employs the 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) To perform or offer to perform, for an additional fee, any
repairs to a structure on which the inspector, or the inspector's
company, has prepared a home inspection report in the past 12 months.
(b) Inspect for a fee any property in which the inspector, or the
inspector's company, has any financial interest or any interest in
the transfer of the property.
(c) To offer or deliver any compensation, inducement, or reward to
the owner of the inspected property, the broker, or agent, for the
referral of any business to the inspector or the inspection company.
(d) Accept an engagement to make an inspection or to prepare a
report in which the employment itself or the fee payable for the
inspection is contingent upon the conclusions in the report,
preestablished findings, or the close of escrow.
(e) A home protection company that is affiliated with or that
retains the home inspector does not violate this section if it
performs repairs pursuant to claims made under the home protection
contract.
7198. Contractual provisions that purport to waive the duty owed
pursuant to Section 7196, or limit the liability of the home
inspector to the cost of the home inspection report, are contrary to
public policy and invalid.
7199. The time for commencement of a legal action for breach of
duty arising from a home inspection report shall not exceed four
years from the date of the inspection.