Bill 165 2016

An Act to regulate home inspectors

CONTENTS

 

Preamble

The purchase of a home is the largest investment most homeowners will make in their lifetime and homebuyers are increasingly reliant on home inspectors. The current unregulated environment for home inspectors poses risk for the consumer. An unqualified home inspection poses a primarily financial risk from situations such as an unexpected repair and maintenance costs. In addition to financial risk, in some circumstances the condition of homes could also constitute a safety risk to homeowners. These risks ultimately hurt consumer confidence and hurt the home inspection industry as a whole.

Home inspections are a good tool for homebuyers, especially new ones. The regulation of home inspectors will ensure the health of the industry and will create accountability that is helpful for consumers. As the complexity of home inspections rises, licensing will raise the standards of the industry.

It is important for the Province to protect homebuyers by regulating the home inspection industry. Increased protection for homebuyers through licensing will increase consumer trust in the real estate transaction and decrease unnecessary consumer risk.

Therefore, Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

Part I
Interpretation

Definitions

   1.  In this Act,

"administrative authority" means the corporation that the Lieutenant Governor in Council has designated as such under subsection 2 (1); ("organisme d'application")

"board" means the board of directors of the administrative authority; ("conseil")

"home inspection" means, subject to the regulations, the provision of an opinion, in the form of a written report, on the condition of a residential dwelling based on the results of non-destructive testing; ("inspection d'habitations")

"licence" means a licence issued under this Act; ("permis")

"licensee" means the holder of a licence; ("titulaire de permis")

"Minister" means the Minister of Government and Consumer Services or any other member of the Executive Council to whom the responsibility for the administration of this Act is assigned or transferred under the Executive Council Act; ("ministre")

"Registrar" means the Registrar of the administrative authority appointed under section 24; ("registrateur")

"regulations" means the regulations made under this Act; ("règlements")

"residential dwelling" means any premises or part of a premises occupied exclusively as living accommodation; ("logement")

"Tribunal" means the Licence Appeal Tribunal established under the Licence Appeal Tribunal Act, 1999. ("Tribunal")

Part II
Administration

Delegation

Designation of administrative authority

   2.  (1)  The Lieutenant Governor in Council may, by regulation, designate a not-for-profit corporation without share capital incorporated under the laws of Ontario as the administrative authority for the purposes of this Act.

Delegation of administration

   (2)  If the Lieutenant Governor in Council designates a corporation as the administrative authority, the administration of all provisions of this Act and the regulations, except for this Part and Part V, is delegated to the authority and the authority shall carry out the administration of the delegated provisions.

Administrative agreement

   3.  (1)  The Lieutenant Governor in Council shall not designate a corporation under subsection 2 (1) as the administrative authority until the Minister and the corporation have entered into an agreement to be known as the administrative agreement.

Contents

   (2)  The administrative agreement shall include, at a minimum, terms related to the following matters with respect to the administrative authority:

    1.  The governance of the authority, including providing for the election of members to the board.

    2.  All matters that the Minister considers necessary for the authority to carry out the administration of the delegated provisions.

    3.  The maintenance by the authority of adequate insurance against liability arising out of the carrying out of its powers and duties under this Act or the regulations.

Compliance with operating principle

   (3)  The administrative agreement shall require the administrative authority to comply with the principle of promoting the protection of the public interest.

Amendment by Minister

   (4)  Subject to section 9, the Minister may unilaterally amend the administrative agreement, after giving the administrative authority the notice that the Minister considers reasonable in the circumstances.

Policy directions

   4.  (1)  Subject to section 9, the Minister may issue policy directions to the administrative authority related to its powers and duties under this Act or the regulations, after giving the authority the notice that the Minister considers reasonable in the circumstances.

Part of the administrative agreement

   (2)  The policy directions are deemed to form part of the administrative agreement.

Compliance

   (3)  The administrative authority shall comply with the policy directions and shall implement measures to do so.

Compliance by administrative authority

   5.  In carrying out its powers and duties under this Act or the regulations, the administrative authority shall comply with the administrative agreement, this Act, the regulations and other applicable law.

Review

   6.  (1)  The Minister may,

  (a)  require that policy, legislative or regulatory reviews related to the powers and duties of the administrative authority under this Act, the regulations or the administrative agreement be carried out,

           (i)  by or on behalf of the authority, or

          (ii)  by a person or entity specified by the Minister; or

  (b)  require that reviews of the administrative authority, of its operations, or of both, including, without limitation, performance, governance, accountability and financial reviews, be carried out,

           (i)  by or on behalf of the authority, or

          (ii)  by a person or entity specified by the Minister.

Access to records

   (2)  If a review is carried out by a person or entity specified by the Minister, the administrative authority shall give the person or entity specified by the Minister and the employees of the person or entity access to all records and other information required to conduct the review.

Conflict

   7.  In the event of conflict, this Act and the regulations prevail over,

  (a)  the administrative agreement;

  (b)  the Corporations Act, the Corporations Information Act or a regulation made under either of those Acts;

   (c)  the administrative authority's constating documents, by-laws and resolutions.

Revocation of designation

   8.  (1)  The Lieutenant Governor in Council may, by regulation, revoke the designation of the administrative authority if the Lieutenant Governor in Council considers it advisable to do so in the public interest.

Revocation for non-compliance

   (2)  The Lieutenant Governor in Council may, by regulation, revoke the designation of the administrative authority if,

  (a)  the authority has failed to comply with this Act, the regulations, other applicable law or the administrative agreement;

  (b)  the Minister has allowed the authority the opportunity of remedying its default within a specified time period that the Minister considers reasonable in the circumstances; and

   (c)  the authority has not remedied its default to the Minister's satisfaction within the specified time period mentioned in clause (b) and the Minister has so advised the Lieutenant Governor in Council.

Same, no restriction on subs. (1)

   (3)  Nothing in subsection (2) restricts the ability of the Lieutenant Governor in Council to act under subsection (1).

Revocation on request

   (4)  The Lieutenant Governor in Council may, by regulation, revoke the designation of the administrative authority on the terms that the Lieutenant Governor in Council considers advisable in the public interest if the authority requests the revocation.

Transition

   (5)  If the Lieutenant Governor in Council revokes the designation of the administrative authority under this section, the Lieutenant Governor in Council may, by regulation, provide for any transitional matter necessary for the effective implementation of the revocation.

Same

   (6)  If the Lieutenant Governor in Council revokes the designation of the administrative authority under this section, any licence that was valid on the day of the revocation remains valid until three months after the day that a new administrative authority is designated under subsection 2 (1).

Condition precedent for exercise of certain powers

   9.  The Minister may exercise a power under subsection 3 (4) or 4 (1) only if the Minister is of the opinion that it is advisable to exercise the power in the public interest because at least one of the following conditions is satisfied:

    1.  The exercise of the power is necessary to prevent serious harm to the interests of the public, home inspectors, owners or purchasers or other affected parties.

    2.  An event of force majeure has occurred.

    3.  The administrative authority is insolvent.

    4.  The number of members of the board is insufficient for a quorum.

Administrative Authority

Criteria and directives re board members

   10.  (1)  The Minister may, by order,

  (a)  establish competency criteria for members of the board; and

  (b)  make rules about the nomination of members, the appointment or election process, the length of their terms and whether they may be reappointed or re-elected.

Competency criteria

   (2)  A person is qualified to be appointed or elected to the board only if he or she meets any competency criteria established under clause (1) (a).

Conflict

   (3)  In the event of conflict, an order made under subsection (1) prevails over a by-law or resolution of the administrative authority.

Board appointments

   11.  (1)  The Minister may appoint one or more members to the board for a term specified in the appointment.

Majority

   (2)  The number of members appointed by the Minister shall not form a majority of the board.

Composition

   (3)  The members appointed by the Minister may include,

  (a)  representatives of home inspection interest groups; and

  (b)  representatives of other interests as the Minister determines.

Change in number of directors

   12.  The Minister may, by order, increase or decrease the number of members of the board.

Appointment of a chair

   13.  The Minister may appoint a chair from among the members of the board.

Public access to corporate by-laws

   14.  (1)  The administrative authority shall make its corporate by-laws available for public inspection,

  (a)  within the time and manner specified in the administrative agreement; or

  (b)  within 10 days after the by-laws are made by the board, if no time is specified in the administrative agreement.

Access to compensation information

   (2)  The administrative authority shall make available to the public the prescribed information relating to the compensation for members of its board or officers or employees of the authority and relating to any other payments that it makes or is required to make to them, and shall do so in the prescribed manner.

Processes and procedures

   (3)  The administrative authority shall follow the prescribed processes and procedures with respect to providing access to the public to records of the authority and with respect to managing personal information contained in those records.

Employees

   15.  (1)  Subject to the administrative agreement, the administrative authority may employ or retain the services of any qualified person to carry out any of its powers and duties under this Act or the regulations.

Not Crown employees

   (2)  The following persons are not employees of the Crown and shall not hold themselves out as such:

    1.  Persons who are employed or whose services are retained under subsection (1).

    2.  Members, officers and agents of the administrative authority.

    3.  Members of the board, including those appointed by the Minister.

Not Crown agency

   16.  (1)  Despite the Crown Agency Act, the administrative authority is not an agent of the Crown for any purpose and shall not hold itself out as such.

Same

   (2)  The following persons are not agents of the Crown and shall not hold themselves out as such:

    1.  Persons who are employed or whose services are retained by the administrative authority.

    2.  Members, officers and agents of the administrative authority.

    3.  Members of the board, including those appointed by the Minister.

No personal liability, Crown employee

   17.  (1)  No action or other proceeding shall be instituted against an employee of the Crown for an act done in good faith in the execution or intended execution of a duty under this Act or the regulations or for an alleged neglect or default in the execution in good faith of the duty.

Tort by Crown employee

   (2)  Despite subsections 5 (2) and (4) of the Proceedings Against the Crown Act, subsection (1) does not relieve the Crown of liability in respect of a tort committed by an employee of the Crown to which it would otherwise be subject.

No Crown liability

   18.  (1)  No cause of action arises against the Crown as a direct or indirect result of any act or omission that a person who is not an employee or agent of the Crown takes or makes in the execution or intended execution of any of the person's powers or duties under this Act or the regulations.

No proceeding

   (2)  No action or other proceeding for damages, including but not limited to a proceeding for a remedy in contract, restitution, tort or trust, shall be instituted against the Crown in connection with any cause of action described in subsection (1).

Indemnification of the Crown

   19.  The administrative authority shall indemnify the Crown, in accordance with the administrative agreement, in respect of damages and costs incurred by the Crown for any act or omission of the authority or its members, officers, directors, employees or agents in the execution or intended execution of their powers and duties under this Act, the regulations or the administrative agreement.

No personal liability, board members and others

   20.  (1)  No action or other proceeding shall be instituted against a person mentioned in subsection (2), for an act done in good faith in the execution or intended execution of any of the person's powers or duties under this Act or the regulations or for an alleged neglect or default in the execution in good faith of that power or duty.

Same

   (2)  Subsection (1) applies to,

  (a)  members of the board;

  (b)  persons who perform functions under this Act or the regulations as employees, agents or officers of the administrative authority or as persons whose services it retains;

   (c)  individuals who perform functions under this Act or the regulations.

Liability of administrative authority

   (3)  Subsection (1) does not relieve the administrative authority of liability to which it would otherwise be subject.

Not public money

   21.  (1)  The money that the administrative authority collects in carrying out its powers and duties under this Act or the regulations is not public money within the meaning of the Financial Administration Act.

Same

   (2)  The administrative authority may use the money described in subsection (1) to carry out activities in accordance with its objects, subject to any restrictions in this Part.

Audit

   22.  (1)  The Auditor General appointed under the Auditor General Act may conduct an audit of the administrative authority, other than an audit required under the Corporations Act.

Access to records and information

   (2)  If the Auditor General conducts an audit under subsection (1), the administrative authority shall give the Auditor General and employees of the Auditor General access to all records and other information required to conduct the audit.

Reports

   23.  (1)  The board shall report to the Minister on its activities and financial affairs as they relate to this Act and the administrative agreement.

Form and contents

   (2)  The report shall be in a form acceptable to the Minister and shall provide the information that the Minister requires.

Time for reports

   (3)  The board shall prepare the report for each year and at the other times that the Minister specifies.

Appointment of Registrar

   24.  The board shall appoint a Registrar who shall perform the duties assigned to the Registrar under this Act.

Part III
Home Inspection LicenCE

Application for licence

   25.  (1)  An individual may apply to the Registrar in the prescribed form for a licence.

Issuance of licence

   (2)  Subject to section 26, the Registrar shall issue a licence to any applicant who meets the prescribed requirements and who pays the prescribed fee.

Expiration of licence

   (3)  A licence expires as prescribed by the regulations.

Renewal of licence

   (4)  Subject to section 26, the Registrar shall renew a licence on the day it expires if the licensee has paid the prescribed renewal fee.

Revocation, suspension or refusal to renew licence

   26.  (1)  The Registrar may revoke, suspend or refuse to issue or renew a licence if the licensee breaches a condition of the licence or no longer meets the prescribed requirements for issuance of a licence.

Registrar's proposed order

   (2)  If the Registrar intends to revoke, suspend or refuse to issue or renew a licence, the Registrar shall serve notice of the proposed order, together with written reasons, on the applicant or licensee.

Right to hearing

   (3)  The notice of the proposed order shall inform the applicant or licensee that the person is entitled to a hearing before the Tribunal.

Request for hearing

   (4)  To request a hearing, the applicant or licensee shall serve a written request on the Registrar and the Tribunal within 15 days after the Registrar serves the notice of the proposed order.

If no hearing

   (5)  The Registrar may make the proposed order, if the applicant or licensee does not request a hearing within the allowed time.

Hearing

   (6)  If the person requests a hearing, the Tribunal shall schedule and hold the hearing.

Order of Tribunal

   (7)  After holding a hearing, the Tribunal may, by order,

  (a)  confirm or set aside the proposed order;

  (b)  direct the Registrar to take the action that the Tribunal considers the Registrar ought to take to give effect to the purposes of this Act.

Discretion of Tribunal

   (8)  In making an order, the Tribunal may substitute its opinion for that of the Registrar.

Conditions of order

   (9)  The Tribunal may attach conditions to its order that it considers appropriate.

Licence conditions

   27.  Every licence is subject to the following conditions:

    1.  The licensee must meet the prescribed standard of practice.

    2.  The licensee must comply with the code of ethics established in the regulations.

    3.  The licensee must maintain the minimum insurance requirements set out in the regulations.

    4.  The licensee must meet any other conditions prescribed by the regulations.

Part IV
Offences

Licence required to perform home inspection

   28.  (1)  No person shall perform a home inspection without a licence.

Title protection

   (2)  No person shall, through an entity or otherwise,

  (a)  take or use the designation "Licensed Home Inspector" or "inspecteur d'habitations  titulaire d'un permis", or the initials "L.H.I." or "I.H.T.P.";

  (b)  take or use any term, title, initials, designation or description implying that the person is a Licensed Home Inspector; or

   (c)  otherwise hold himself or herself out as a Licensed Home Inspector.

Offence

   (3)  A person who contravenes subsection (1) or (2) is guilty of an offence and on conviction is liable to a fine of not more than $10,000 for each day or part of a day on which the offence occurs or continues.

Part V
Regulations

Regulations

   29.  (1)  The Lieutenant Governor in Council may make regulations,

  (a)  exempting any person or class of persons from any provision of this Act and attaching conditions to the exemption;

  (b)  prescribing types of inspections to be included in or excluded from the definition of "home inspection";

   (c)  establishing a code of ethics for the purposes of paragraph 2 of section 27;

  (d)  prescribing anything that, under this Act, may or must be prescribed or done by regulation;

  (e)  providing for and governing the appointment of inspectors;

   (f)  authorizing and governing inspections that may be performed by inspectors for the purpose of determining whether a licensee has met his or her licence conditions;

  (g)  establishing and governing a complaints process with respect to licensees;

  (h)  governing the disclosure of the names of licensees and other information concerning the licensees;

    (i)  requiring the Registrar to make available to the public the names of licensees and prescribing the form and manner in which the names of licensees are made available;

    (j)  prescribing other information in respect of licensees that may be made available to the public;

   (k)  governing the insurance that licensed home inspectors must have, including,

           (i)  prescribing the types of insurance they must have, which must include coverage for errors, omissions and commercial general liability,

          (ii)  prescribing the minimum amounts for which they must be insured under each type of insurance, and

         (iii)  authorizing the board to arrange for and administer group insurance that may be made available to licensed home inspectors;

    (l)  governing transitional matters that, in the opinion of the Lieutenant Governor in Council, are necessary or desirable to facilitate the implementation of this Act;

(m)  generally for carrying out the purposes and provisions of this Act.

Delegation

   (2)  The Lieutenant Governor in Council may, by regulation, delegate to the board the power to make some or all of the regulations under subsection (1), subject to the approval of the Lieutenant Governor in Council.

Part VI
Other Amendments

Amendments to this Act

   30.  (1)  Clause 7 (b) is amended by striking out "the Corporations Act" at the beginning and substituting "the Not-for-Profit Corporations Act, 2010".

Same

   (2)  Subsection 22 (1) is amended by striking out "the Corporations Act" at the end and substituting "the Not-for-Profit Corporations Act, 2010".

Licence Appeal Tribunal Act, 1999

   31.  Subsection 11 (1) of the Licence Appeal Tribunal Act, 1999 is amended by adding the following:

Licensed Home Inspectors Act, 2016

Ontario Labour Mobility Act, 2009

   32.  Table 1 to the Ontario Labour Mobility Act, 2009 is amended by adding the following item:

 

32.0.1

Licensed Home Inspectors Act, 2016

The administrative authority, as defined in section 1 of the authorizing statute

 

Part VII
Commencement and Short Title

Commencement

   33.  (1)  Subject to subsection (2), this Act comes into force on the day it receives Royal Assent.

Same

   (2)  Section 30 comes into force on the later of the day subsection 4 (1) of the Not-for-Profit Corporations Act, 2010 comes into force and the day this Act receives Royal Assent.

Short title

   34.  The short title of this Act is the Licensed Home Inspectors Act, 2016.

 

EXPLANATORY NOTE

The Bill enacts the Licensed Home Inspectors Act, 2016 and makes complementary amendments to the Licence Appeal Tribunal Act, 1999 and to the Ontario Labour Mobility Act, 2009.

Part I

Part I deals with definitions and interpretation.

Part II

Part II allows the Lieutenant Governor in Council to designate a not-for-profit corporation as the administrative authority. If an administrative authority is designated, the administration of specified provisions of the Act and the regulations made under the Act is delegated to the authority and the authority is required to carry out the administration of the delegated provisions.

The Part includes mechanisms for government oversight, including requirements for an administrative agreement between the administrative authority and the Minister, annual and other reports by the authority, competency criteria for board members and oversight by the Auditor General.

The administrative authority is not an agent of the Crown. Employees of the authority are not Crown employees. There is no Crown liability for actions of the authority and the authority is required to indemnify the Crown for damages or costs.

The administrative authority is able to set forms and fees in accordance with processes and criteria approved by the Minister.

If an administrative authority is designated, it is required to appoint a Registrar.

Part III

Part III provides for the issuance of home inspection licences. The Registrar is required to issue a licence if the prescribed requirements have been satisfied.

The Registrar may refuse to issue or renew a licence or suspend a licence if a licence condition is breached or the requirements for issuance of a licence are no longer met. These actions can be appealed to the Licence Appeal Tribunal.

Part III also sets out the conditions that attach to the licences.

Part IV

Part IV sets out offences for performing a home inspection or using a protected title without a licence.

Part V

Part V allows the Lieutenant Governor in Council to make regulations dealing with a broad range of matters to regulate the licensing of home inspectors. The Lieutenant Governor in Council may, by regulation, delegate the making of these powers to the board, subject to the approval of the Lieutenant Governor in Council.

Part VI

Part VI makes minor consequential amendments to this Act. It also amends the Licence Appeal Tribunal Act, 1999 to add this Act to the list of Acts the Tribunal has jurisdiction over. In addition, it amends the Ontario Labour Mobility Act, 2009 to add this Act to the list of that Act's authorizing statutes.