Assembly Bill No. 165-Assemblymen Anderson, Bache, Collins, Parks, Carpenter, Perkins, Herrera, Berman, Manendo, Koivisto, Segerblom and Ohrenschall
February 13, 1997
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Referred to Committee on Commerce
SUMMARY--Provides for certification of inspectors of real estate. (BDR 54-274)
FISCAL NOTE: Effect on Local Government: Yes.
Effect on the State or on Industrial Insurance: Yes.
EXPLANATION - Matter in italics is new; matter in brackets [ ] is material to be omitted.
AN ACT relating to real estate; providing for the certification of inspectors of structures by the real estate division of the department of business and industry; imposing a fee; providing penalties; and providing other matters properly relating thereto.
THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:
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Section 1 Title 54 of NRS is hereby amended by adding thereto a new chapter to consist of the provisions set forth as sections 2 to 28, inclusive, of this act.
Sec. 2 As used in this chapter, unless the context otherwise requires, the words and terms defined in sections 3 to 9, inclusive, of this act have the meanings ascribed to them in those sections.
Sec. 3 "Administrator" means the real estate administrator.
Sec. 4 "Certificate" means a certificate issued to an inspector pursuant to this chapter.
Sec. 5 "Certified inspector" means an inspector to whom a certificate has been issued pursuant to this chapter.
Sec. 6 "Division" means the real estate division of the department of business and industry.
Sec. 7 "Inspection" means a physical examination of the mechanical, electrical or plumbing systems of a structure or of the structural components of a structure. The term includes any consultation regarding a structure that is represented to be a certified inspection or any other title, word or other designation intended to imply or designate that the consultation is a certified inspection.
Sec. 8 "Inspection report" means an analysis, opinion or conclusion, regarding the condition of a structure, that is:
1. Provided after an inspection, in a written report, for or with the expectation of receiving compensation for the report; and
2. Designed to describe and identify the inspected systems or structural components of the structure, their physical condition, any material defect and any recommendation for evaluation by another person.
Sec. 9 "Inspector" means a person who examines any component of a structure and prepares or communicates an inspection report. The term does not include any person who merely relays an inspection report on behalf of the person who prepares it.
Sec. 10 The provisions of this chapter do not apply to:
1. A federal or state employee, or an employee of a local government, who prepares or communicates an inspection report as part of his official duties, unless a certificate is required as a condition of his employment.
2. A person appointed to evaluate real estate pursuant to chapter 152 of NRS or NRS 269.125, except as required by the appointing judge.
3. A board of appraisers acting pursuant to NRS 269.135.
4. A person licensed, certified or registered pursuant to chapter 645, 645C or 684A of NRS while he is performing an act within the scope of his license, certification or registration.
5. A person who makes an evaluation of an improvement as an incidental part of his employment for which special compensation is not provided, if that evaluation is only provided to his employer for internal use within the place of his employment.
6. A person who provides an estimate of cost, repair or replacement of any improvements upon real estate.
Sec. 11 1. The division shall administer the provisions of this chapter and may employ legal counsel, investigators and other professional consultants necessary to discharge its duties pursuant to this chapter.
2. An employee of the division shall not:
(a) Be employed by or have an interest in any business that prepares inspection reports; or
(b) Act as an inspector or as an agent for an inspector.
Sec. 12 The division shall adopt:
1. Regulations prescribing the education and experience required to obtain a certificate.
2. Regulations prescribing a standard of practice and code of ethics for certified inspectors. Such regulations must establish a degree of care that must be exercised by a reasonably prudent certified inspector.
3. Such other regulations as are necessary for the administration of this chapter.
Sec. 13 1. The division shall maintain a record of:
(a) Persons from whom it receives applications for a certificate;
(b) Investigations conducted by it that result in the initiation of formal disciplinary proceedings;
(c) Formal disciplinary proceedings; and
(d) Rulings or decisions upon complaints filed with it.
2. Except as otherwise provided in this section, records kept in the office of the division pursuant to this chapter are open to the public for inspection pursuant to regulations adopted by the division. The division shall keep confidential, unless otherwise ordered by a court:
(a) Information obtained by the division while investigating alleged violations of this chapter; and
(b) The criminal and financial records of an inspector or of an applicant for a certificate.
Sec. 14 1. All fees, penalties and other charges received by the division pursuant to this chapter must be deposited with the state treasurer for credit to the state general fund.
2. Money for the support of the division in carrying out the provisions of this chapter must be provided by direct legislative appropriation and be paid out on claims as other claims against the state are paid.
Sec. 15 1. The attorney general shall render to the division opinions upon questions of law relating to the construction or interpretation of this chapter, or arising in the administration thereof, submitted to him by the division.
2. The attorney general shall act as the attorney for the division in all actions and proceedings brought against or by the division pursuant to any of the provisions of this chapter.
Sec. 16 1. Any person who, in this state, engages in the business of, acts in the capacity of, or advertises or assumes to act as an inspector without first obtaining a certificate pursuant to this chapter is guilty of a misdemeanor.
2. The division may file a complaint in any court of competent jurisdiction for a violation of this section and assist in presenting the law or facts at any hearing upon the complaint.
3. At the request of the administrator, the attorney general shall prosecute such a violation. Unless the violation is prosecuted by the attorney general, the district attorney shall prosecute a violation that occurs in his county.
Sec. 17 An application for a certificate must be in writing upon a form prepared and furnished by the division. The application must include the following information:
1. The name, age and address of the applicant.
2. The place or places, including the street number, city and county, at which the applicant intends to maintain an office to conduct business as an inspector.
3. The business, occupation or other employment of the applicant during the 5 years immediately preceding the date of the application, and the location thereof.
4. The applicant's education and experience to qualify for a certificate.
5. Whether the applicant has ever been convicted of, is under indictment for, or has entered a plea of guilty or nolo contendere to:
(a) A felony, and if so, the nature of the felony.
(b) Forgery, embezzlement, obtaining money under false pretenses, larceny, extortion, conspiracy to defraud or any crime involving moral turpitude.
6. If the applicant is a member of a partnership or association or is an officer of a corporation, the name and address of the principal office of the partnership, association or corporation.
7. Any other information relating to the qualifications or background of the applicant that the division requires.
Sec. 18 1. Every application for a certificate must be accompanied by the fee for the certificate.
2. Each applicant must:
(a) At his own expense and on a card provided by the division, arrange to be fingerprinted by an agency of law enforcement; and
(b) Attach the completed card to his application.
3. The division may:
(a) Require more than one set of fingerprints;
(b) Mail a completed card to the Federal Bureau of Investigation or any other agency of law enforcement; and
(c) Request from such an agency any information regarding the applicant's criminal history that the division deems necessary.
Sec. 19 1. The administrator shall require each applicant for an original certificate and each applicant for renewal of a certificate to submit proof that he or his employer holds a policy of insurance covering:
(a) Liability for errors or omissions in an amount of not less than $100,000; and
(b) General liability in an amount of not less than $100,000.
2. Each certified inspector or his employer shall maintain a policy of insurance that complies with the requirements of subsection 1.
Sec. 20 1. The administrator shall issue a certificate to any person who:
(a) Is of good moral character, honesty and integrity;
(b) Has the education and experience prescribed in the regulations adopted pursuant to section 12 of this act; and
(c) Has submitted proof that he or his employer holds a policy of insurance that complies with the requirements of subsection 1 of section 19 of this act.
2. The administrator may deny an application for a certificate to any person who:
(a) Has been convicted of, or entered a plea of guilty or nolo contendere to, forgery, embezzlement, obtaining money under false pretenses, larceny, extortion, conspiracy to defraud or any crime involving moral turpitude;
(b) Makes a false statement of a material fact on his application;
(c) Has had a certificate suspended or revoked pursuant to this chapter within the 10 years immediately preceding the date of his application; or
(d) Has not submitted proof that he or his employer holds a policy of insurance that complies with the requirements of subsection 1 of section 19 of this act.
Sec. 21 1. If an application for a certificate is denied:
(a) The division shall notify the applicant within 15 days after its decision; and
(b) The applicant may not reapply until he petitions the division for leave to file another application. The division may grant or deny that leave in its sole discretion.
2. If the applicant, within 30 days after receipt of the notice denying his application, files a written request containing allegations that, if true, qualify the applicant for a certificate, the administrator shall set the matter for a hearing before a hearing officer of the division to be conducted within 60 days after receipt of the applicant's request. The decision of the hearing officer is a final decision for the purposes of judicial review.
Sec. 22 The division, upon the discovery of an error in the issuance of a certificate that is related to the qualifications or fitness of the holder thereof, may invalidate the certificate upon written notice to the holder. The holder shall surrender the certificate to the division within 20 days after the notice is sent by the division. A person whose certificate is invalidated pursuant to this section, and who has surrendered his certificate, may request a hearing on the matter in the same manner as for the denial of an application pursuant to section 21 of this act.
Sec. 23 1. The division shall issue a certificate to each eligible person in the form and size prescribed by the division. A certificate must:
(a) Indicate the name and address of the inspector and the location of each place where he transacts business as an inspector; and
(b) Contain any additional matter prescribed by the division.
2. A certificate is valid for 2 years after the first day of the first calendar month immediately following the date it is issued.
3. If an inspector fails to apply for the renewal of his certificate and pay the fee for renewal before the certificate expires, and applies for renewal:
(a) Not later than 1 year after the date of expiration, he must pay a fee equal to 150 percent of the amount otherwise required for renewal.
(b) Later than 1 year after the date of expiration, he must apply in the same manner as for an original certificate.
Sec. 24 The following fees must be charged and collected by the division:
Application for a certificate $100
Issuance or renewal of a certificate 250
Sec. 25 1. Grounds for disciplinary action against a certified inspector are:
(a) Unprofessional conduct;
(b) Professional incompetence; and
(c) A criminal conviction for a felony or any offense involving moral turpitude.
2. If grounds for disciplinary action against a certified inspector exist, the division may, after providing the inspector with notice and an opportunity for a hearing, do one or more of the following:
(a) Revoke or suspend his certificate.
(b) Place conditions upon his certificate or upon the reissuance of a certificate revoked pursuant to this section.
(c) Impose a fine of not more than $1,000 for each violation.
3. If a certificate is revoked by the division, another certificate must not be issued to the same inspector for at least 1 year after the date of the revocation, or at any time thereafter except in the sole discretion of the administrator, and then only if the inspector satisfies the requirements for an original certificate.
Sec. 26 A certified inspector is guilty of unprofessional conduct if he:
1. Fails to disclose to any person with whom he is dealing any material fact or other information he knows, or in the exercise of reasonable care and diligence should know, concerning any improvement he inspects, including any interest he has in the improvement or the real estate to which it is affixed;
2. Knowingly communicates a false or fraudulent inspection report to any interested person or otherwise engages in any deceitful, fraudulent or dishonest conduct;
3. Before obtaining his certificate, engaged in any conduct of which the division is not aware that would be a ground for the denial of a certificate;
4. Makes a false statement of material fact on his application for a certificate; or
5. Performs any repairs for compensation upon any improvement for which he has prepared an inspection report.
Sec. 27 1. Whenever the division believes from evidence satisfactory to it that any person has violated or is about to violate a provision of this chapter, or a provision of any regulation, ruling or decision of the division, it may bring an action, in the name of the division, in the district court of the State of Nevada in and for the county where the person resides or, if the person resides outside the State of Nevada, in any court of competent jurisdiction within or outside the State of Nevada, against the person to enjoin him from engaging in or continuing the violation, or from doing any act or acts in furtherance of the violation.
2. If the action is brought in a district court of the State of Nevada, an order or judgment may be entered, if proper, awarding a temporary restraining order, preliminary injunction or final injunction. A preliminary injunction or temporary restraining order must not be granted without at least 5 days' notice to the opposite party.
Sec. 28 1. A person who obtains or attempts to obtain a certificate by means of intentional misrepresentation, deceit or fraud is guilty of a category E felony and shall be punished as provided in NRS 193.130. In addition to any other penalty, the court may impose a fine of not more than $10,000.
2. A person who:
(a) Holds himself out as a certified inspector;
(b) Uses in connection with his name the words "licensed," "registered," "certified" or any other title, word, letter or other designation intended to imply or designate that he is a certified inspector; or
(c) Describes or refers to any inspection report prepared by him as "certified" or "licensed" in this state, without first obtaining a certificate as provided in this chapter, is guilty of a gross misdemeanor.
Sec. 29 NRS 645C.150 is hereby amended to read as follows:
645C.150 The provisions of this chapter do not apply to:
1. A federal or state employee, or an employee of a local government, who prepares or communicates an appraisal as part of his official duties, unless a license or certificate is required as a condition of his employment.
2. A person appointed to evaluate real estate pursuant to chapter 152 of NRS or NRS 269.125, except as required by the appointing judge.
3. A board of appraisers acting pursuant to NRS 269.135.
4. A person licensed pursuant to chapter 645 or 684A of NRS , or certified pursuant to sections 2 to 28, inclusive, of this act, while he is performing an act within the scope of his license [.] or certificate.
5. A person who makes an evaluation of real estate as an incidental part of his employment for which [no] special compensation is not provided, if that evaluation is only provided to his employer for internal use within the place of his employment.
Sec. 30 NRS 113.150 is hereby amended to read as follows:
113.150 1. If a seller or his agent fails to serve a completed disclosure form in accordance with the requirements of NRS 113.130, the purchaser may, at any time before the conveyance of the property to the purchaser, rescind the agreement to purchase the property without any penalties.
2. If, before the conveyance of the property to the purchaser, a seller or his agent informs the purchaser or his agent, through the disclosure form or another written notice, of a defect in the property that was not identified in the agreement to purchase the property, the purchaser may:
(a) Rescind the agreement to purchase the property at any time before the conveyance of the property to the purchaser; or
(b) Recover from the seller the actual amount necessary to repair or replace the defective part of the property.
3. Rescission of an agreement pursuant to subsection 2 is effective only if made in writing, notarized and served not later than 4 working days after the date on which the purchaser is informed of the defect:
(a) On the holder of any escrow opened for the conveyance; or
(b) If an escrow has not been opened for the conveyance, on the seller or his agent.
4. Except as otherwise provided in subsection 5, if a seller conveys residential property to a purchaser without complying with the requirements of NRS 113.130 or otherwise providing the purchaser or his agent with written notice of all defects in the property of which the seller is aware, and there is a defect in the property of which the seller was aware before the property was conveyed to the purchaser and which was not identified in the agreement to purchase the property, the purchaser is entitled to recover from the seller treble the amount necessary to repair or replace the defective part of the property, together with court costs and reasonable attorney's fees. An action to enforce the provisions of this subsection must be commenced not later than 1 year after the purchaser discovers or reasonably should have discovered the defect or 2 years after the conveyance of the property to the purchaser, whichever occurs later.
5. A purchaser may not recover damages from a seller pursuant to subsection 4 on the basis of an error or omission in the disclosure form that was caused by the seller's reliance upon information provided to the seller by:
(a) An officer or employee of this state or any political subdivision of this state in the ordinary course of his duties; or
(b) A contractor, engineer, land surveyor , certified inspector as defined in section 5 of this act or pesticide applicator, who was authorized to practice that profession in this state at the time the information was provided.
6. A purchaser of residential property may waive any of his rights under this section. Any such waiver is effective only if it is made in a written document that is signed by the purchaser and notarized.
Sec. 31 1. This section and sections 1 to 15, inclusive, 17 to 27, inclusive, 29 and 30 of this act become effective on October 1, 1997.
2. Sections 16 and 28 of this act become effective on July 1, 1998.