Current through Register Vol. 50, No. 9, March 1, 2024
RELATES TO: KRS 198B.706, 198B.712, 198B.722, 198B.728,
198B.730, 411.270-411.282
NECESSITY, FUNCTION AND CONFORMITY: KRS 198B.706(15) requires
the Kentucky Board of Home Inspectors, with the approval of the executive
director of the Kentucky Real Estate Authority, to promulgate administrative
regulations to carry out the effective administration and requirements of KRS 198B.700 to 198B.738. KRS 198B.706(13) authorizes the board to establish
standards of practice for home inspectors. KRS 198B.706(1) requires the board
to determine the requirements for and prescribe the form of documents required
by KRS 198B.700 to 198B.738. KRS 198B.706(4) requires the board to investigate,
and take action if appropriate, complaints concerning licensees, or persons the
board has reason to believe should be licensees, including complaints
concerning failure to comply with KRS Chapter 198B or 831 KAR Chapter 2. KRS 198B.728 requires the board to take disciplinary actions against or impose
sanctions on a licensee for failing to comply with any provision of KRS 198B.700 to 198B.738 or administrative regulations promulgated thereunder. KRS 198B.730(1) requires the board to schedule and conduct an administrative
hearing in accordance with the provisions of KRS Chapter 13B. KRS 411.272(2)
requires KRS 411.270 to 411.282 to prevail over any conflicting law otherwise
applicable to any action, claim or cause of action against a home inspector,
with specified exceptions. This administrative regulation establishes standards
of conduct for home inspectors, standards for advertising by home inspectors,
and the process for filing and investigating complaints. This administrative
regulation also establishes supplemental administrative hearing procedures for
matters before the board and the required forms for a complaint or
answer.
Section 1. Standards of
Conduct. A licensed home inspector or an entity under which the inspector
conducts business shall:
(1) Act as an
unbiased third party to the real estate transaction;
(2) Discharge the duties of a home inspector
with integrity and fidelity to the client;
(3) Only express an opinion on any aspect of
the inspected property if that opinion is based upon the experience, training,
education, and professional opinion of the inspector;
(4) Provide a written disclosure to the
client of any interest the inspector maintains in the transaction and advise
the client to obtain competitive bids before products or additional services
are offered by the licensee including:
(a)
Products or additional services to be purchased from or provided by the
inspector, his or her agents, or employees;
(b) Products or additional services to be
purchased from or provided by any entity, organization, or venture in which the
inspector has an interest; or
(c)
Products or additional services to be purchased that will result in any
additional compensation or benefit to the inspector, financial or
otherwise;
(5) Provide
the license number, following the licensee's signature, on any document signed
by the home inspector pertaining to the home inspection; and
(6) Report a conviction, plea of guilty, or
an "Alford" plea to any felony or a misdemeanor involving sexual misconduct,
theft, attempted sexual misconduct, or attempted theft to the board within
thirty (30) days.
Section
2. Prohibited Conduct. In addition to the affirmative duties
imposed by Section 1 of this administrative regulation, a licensed home
inspector or an entity under which the licensee conducts business shall not:
(1) Engage in or knowingly cooperate in the
commission of fraud or material deception to obtain a license to engage in the
practice of home inspection, including cheating on the licensing
examination;
(2) Perform repairs or
modifications for compensation, or for other direct or indirect financial
benefit, to a residential dwelling within twelve (12) months after performing a
home inspection on the same residential dwelling, if the repairs or
modifications are based upon the findings in the home inspection report. This
subsection shall not apply if the home inspector purchases the residence after
performing the inspection;
(3)
Perform a home inspection to the client that does not conform to the Standards
of Practice selected on the initial or renewal application for licensure
submitted pursuant to 831 KAR 2:020;
(4) Provide services that constitute the
unauthorized practice of any profession that requires a special license if the
home inspector does not hold that license;
(5) Provide any compensation, inducement, or
reward, either directly or indirectly, to any person or entity other than the
client for the referral of business to the inspector. The purchase or use of
advertising, marketing services, or products shall not be considered
compensation, inducement, or reward;
(6) Conduct a home inspection or prepare a
home inspection report for which the inspector's fee is contingent upon the
conclusions contained in the report;
(7) Misrepresent the financial interests,
either personally or through his or her employment, of any of the parties to
the transfer or sale of a residential dwelling upon which the licensee has
performed a home inspection;
(8)
Disclose any information concerning the results or content of the home
inspection report without the prior, written approval of the client for whom
the home inspection was performed. The home inspector may disclose information
if:
(a) There is an imminent danger to life,
health, or safety; or
(b) The home
inspector is compelled to disclose information by court order or a lawfully
issued subpoena;
(9)
Accept compensation, financial or otherwise, from more than one (1) interested
party for the same home inspection on the same property without the written
consent of all interested parties;
(10) Make a false or misleading
representation regarding the:
(a) Condition of
a residential dwelling for which the licensee has performed or contracted to
perform a home inspection;
(b)
Extent of services the licensee has performed or will perform; or
(c) Type of license held by the
licensee;
(11) Be
convicted of a crime in the course of the practice of home inspection or commit
any act constituting a violation of state law during the course of a home
inspection;
(12) Fail to
continuously maintain the liability insurance required by KRS 198B.712(3)(d)
and 831 KAR 2:020;
(13) Engage in
any course of lewd or immoral conduct in connection with the delivery of
services to clients;
(14) Use the
term "certified" in advertising, unless the certification is current and the
full name of the certifying body is clearly identified;
(15) Use the term "fully insured," unless the
person or entity has business liability and worker's compensation insurance
coverage in effect at the time of the advertisement;
(16) Continue to practice, if the licensed
home inspector has become unfit to practice due to:
(a) Professional incompetence;
(b) Failure to keep abreast of current
professional theory or practice;
(c) Physical or mental disability;
or
(d) Addiction to, abuse of, or
severe dependency on alcohol or other drugs that endanger the public by
impairing a licensed home inspector's ability to practice safely;
(17) Omit information in a home
inspection report required to be disclosed to a client by the Standards of
Practice selected on the initial application for licensure or the application
for renewal submitted pursuant to 831 KAR 2:020; or
(18) Fail to comply with an order of the
board.
Section 3.
Content of Report.
(1) A home inspection
report shall state the Standards of Practice being followed by the
licensee.
(2) A home inspection
report shall include a statement that the report does not address environmental
hazards and shall list all other exclusions with specificity. The presence or
evidence of the following environmental hazards shall not be addressed in the
report:
(a) Air-borne hazards;
(b) The air quality or the sickness of any
building, including the presence or absence of all manner of biological
activity, such as hazardous plants, insects, birds, pets, mammals, and other
flora and fauna, and their consequent physical damage, toxicity, noxiousness,
odors, waste products, and wood destroying animals and fungi;
(c) Animals, insects, or rodents;
(d) Asbestos;
(e) Carcinogens, including radon;
(f) Contaminants in soil, water, and
air;
(g) Electro-magnetic
fields;
(h) Hazardous materials
including the presence of lead in paint;
(i) Hazardous waste conditions;
(j) Mold, mildew, or fungus;
(k) Hazardous plants or animals including
wood destroying organisms, wood destroying insects, or diseases harmful to
humans including molds or mold-like substances;
(l) Noise;
(m) Potability of any water;
(n) Toxins;
(o) Urea formaldehyde;
(p) The effectiveness of any system installed
or method utilized to control or remove suspected environmental hazards;
and
(q) Compliance with regulatory
requirements (for example, codes, regulations, laws, and ordinances), any
manufacturer's recalls, conformance with manufacturer installation or
instructions, or any information for consumer protection purposes.
Section 4. Maintenance
of Records.
(1) A licensed home inspector
shall retain for at least three (3) years from the date of the inspection:
(a) The written reports; and
(b) The contract.
(2) Records may be retained in retrievable,
electronic format.
(3) A licensee
shall provide all records requested by the board within ten (10) days of
receipt of the request.
Section
5. Advertising Standards.
(1)
Every person licensed as a home inspector or claiming to be a home inspector
shall identify and display his or her license number in all advertising
disseminated, either directly or indirectly, to the general public, unless the
advertisement is a promotional item.
(2) Any vehicle used in advertising a home
inspector business shall bear the license number of the home inspector in a
conspicuous location. The letters and numbers shall be at least two (2) inches
in height and shall be visible and legible while the vehicle is being
operated.
(3) If the home inspector
is operating under the name of a business entity, the requirements of this
administrative regulation shall be satisfied by displaying the license number
of the owner or an employee of the business who is a licensed home
inspector.
Section 6.
Complaints.
(1) A complaint may be initiated
by the board, an individual, an entity, or a governmental agency. The complaint
shall be submitted on a Complaint Form, KBHI-7.
(2) If the complaint is initiated by the
public, it shall be notarized by a notary public.
(3) If the complaint screening committee
recommends that a response is needed from the licensee pursuant to Section 7 of
this administrative regulation, a copy of the initiating complaint shall be
mailed to the licensee. The licensee shall file a written response to the
initiating complaint with the board within twenty-one (21) days. The written
response shall:
(a) Identify the
respondent;
(b) State his or her
response to the complaint;
(c)
Include any documentation in dispute of the complaint;
(d) If applicable, state if he or she
proposes to inspect the residence that is the subject of the claim and state
the date by which the inspection will be complete. Any proposal shall include
the statement that the home inspector shall, based on the inspection:
1. Offer to remedy the defect, compromise by
payment, or dispute the claim;
2.
Offer to compromise and settle the claim by monetary payment without
inspection; or
3. State that the
home inspector disputes the claim; and
(e) Be notarized by a notary
public.
(4) A complaint
shall be filed within one (1) year of the date the complainant knew or should
have known of a violation by the licensee.
(5) The complainant may withdraw a complaint,
which shall render the complaint null, void, and without effect, if:
(a) An answer has not been filed in
accordance with this section;
(b)
The withdrawal is made within twenty (20) days of the date the complaint was
filed; or
(c) The withdrawal would
not result in harm to the public.
(6) A withdrawn complaint shall not be
refiled or reheard.
(7) A request
for the board to take or refrain from taking an action shall be made by an oral
or written motion and shall state the basis for the relief sought.
(8) After review by the complaint screening
committee pursuant to Section 7 of this administrative regulation, the board
shall investigate any complaint that alleges a violation of KRS 198B.700 to
198B.738 and 831 KAR Chapter 2.
(9)
The board may appoint any of its members or any agent or representative of the
board to conduct an investigation of the complaint.
(10) Upon the completion of the
investigation, the investigator shall submit a written report to the board
containing a succinct statement of the facts disclosed by the
investigation.
(11) Based on
consideration of the complaint and the investigative report, if any, the board
shall determine if there has been a prima facie violation of KRS 198B.700 to
198B.738 or 831 KAR Chapter 2.
(12)
If the investigator is a member of the board, he or she shall not
vote.
(13) If the board finds that
the facts alleged in the initiating complaint or investigative report:
(a) Do not constitute a prima facie violation
of KRS 198B.700 to 198B.738 or 831 KAR Chapter 2, the board shall dismiss the
complaint and notify the person making the complaint and the licensee that no
further action will be taken at the present time; or
(b) Do constitute a prima facie violation of
KRS 198B.700 to 198B.738 or 831 KAR Chapter 2, the board shall follow the
procedures established in Section 9 of this administrative.
Section 7. Complaint
Screening Committee.
(1) The board chair shall
create a complaint screening committee consisting of at least one (1) board
member who is also a licensed home inspector.
(2) The complaint screening committee shall:
(a) Review new complaints and
responses;
(b) Order investigation
or further investigation;
(c)
Review investigative reports; and
(d) Make recommendations for disposition of
complaints to the full board, including:
1.
Dismissal of the complaint;
2. A
response to the complaint is needed; or
3. An investigation of the complaint is
warranted.
(3) The committee may be assisted by the
board staff and counsel.
(4) The
committee shall report the committee's findings and recommendations to the
board.
Section 8.
Settlement by Informal Proceedings.
(1) The
board, through counsel and the complaint screening committee, may, at any time
during the complaint process established in this administrative regulation,
enter into informal proceedings with the licensee who is the subject of the
complaint for the purpose of appropriately dispensing with the
matter.
(2) An agreed order or
settlement reached through this process shall be approved or denied by the
board and signed by the individual who is the subject of the
complaint.
(3) The board may employ
mediation as a method of resolving the matter informally.
Section 9. Disciplinary Action.
(1)
(a) If
the board finds that there is a prima facie violation of a provision of KRS 198B.700 to 198B.738 or 831 KAR Chapter 2 in accordance with Section 6 of this
administrative regulation, the board shall issue:
1. Written notice of disciplinary action to
the licensee; or
2. Initiate any
remedy permitted by KRS 198B.700 to 198B.738 against an unlicensed
individual.
(b) If a
licensee, the board may propose any combination of discipline permitted by KRS 198B.700 to 198B.738.
(2) The written notice of disciplinary action
shall be sent to the licensee's address on file with the board and inform the
licensee:
(a) Of the specific reason for the
board's action, including:
1. The statutory or
regulatory violation; and
2. The
factual basis on which the disciplinary action is based;
(b) Of the proposed penalty; and
(c) That the licensee may request an
administrative hearing of the penalty to the board within twenty (20) calendar
days of the date of the board's notice.
(3) A written request for an administrative
hearing shall be postmarked no later than twenty (20) calendar days of the date
of the board's notice. The request shall identify the specific issues in
dispute and the legal basis on which the board's decision on each issue is
believed to be erroneous.
(4) If
the request for an administrative hearing is not timely filed, the notice of
disciplinary action shall be effective upon the expiration of the time for the
licensee to request an administrative hearing.
Section 10. Revocation of Probation.
(1) If the board moves to revoke probation
previously granted, the board shall issue written notice of the revocation and
inform the probationee:
(a) Of the factual
basis on which the revocation is based;
(b) Of each probation term violated;
and
(c) That the probationee may
request an administrative hearing of the revocation to the board within twenty
(20) calendar days of the date of notification of revocation. The notification
shall be sent to the last known address on file with the board for the
probationee.
(2) A
written request for an administrative hearing shall be postmarked no later than
twenty (20) calendar days of the date of the board's notice. The request shall
identify the specific issues in dispute and the legal basis on which the
board's decision on each issue is believed to be erroneous.
(3) If the request for an administrative
hearing is not timely filed, the notice of revocation shall be effective upon
the expiration of the time for the probationee to request an administrative
hearing.
Section 11.
Incorporation by Reference.
(1) "Complaint
Form", Form KBHI-7, 9/2018, is incorporated by reference.
STATUTORY AUTHORITY: KRS 198B.706