Pennsylvania Act 2000-114 — REAL AND PERSONAL PROPERTY (68 PA.C.S.) - AMEND

act-2000-0-1142000 Pa. Act 114Law

Act text
REAL AND PERSONAL PROPERTY (68 PA.C.S.) - AMEND
                 Act of Dec. 20, 2000, P.L. 815, No. 114              Cl. 68
                             Session of 2000
                               No. 2000-114

     SB 1032

                                  AN ACT

     Amending Title 68 (Real and Personal Property) of the
        Pennsylvania Consolidated Statutes, relating to residential
        real estate transfers; providing for disclosures by sellers
        of residential real estate and for home inspections; and
        making a repeal.

        The General Assembly of the Commonwealth of Pennsylvania
     hereby enacts as follows:

        Section 1.  Title 68 of the Pennsylvania Consolidated Statutes
     is amended by adding a part to read:
                                 PART III
                        RESIDENTIAL REAL PROPERTY
     Chapter
       71.  General Provisions
       73.  Seller Disclosures
       75.  Home Inspections
                                CHAPTER 71
                            GENERAL PROVISIONS
     Sec.
     7101.  Short title of part.
     7102.  Definitions.
     7103.  Application of part.
      § 7101.  Short title of part.
        This part shall be known and may be cited as the Residential
     Real Estate Transfers Law.
      § 7102.  Definitions.
        Subject to additional definitions contained in subsequent
     provisions of this part which are applicable to specific
     provisions of this part, the following words and phrases when
     used in this part shall have the meanings given to them in this
     section unless the context clearly indicates otherwise:
        "Agent."  Any broker, associate broker or salesperson, as
     defined in the act of February 19, 1980 (P.L.15, No.9), known as
     the Real Estate Licensing and Registration Act.
        "Agreement of transfer."  A contract between a buyer and
     seller setting forth the terms of a residential real estate
     transfer.
        "Buyer."  Any person receiving any estate or interest in real
     property in a transfer subject to this part.
        "Commission."  The State Real Estate Commission.
        "Final settlement."  The time at which the buyer and seller
     have signed and delivered all papers and consideration necessary
     to convey title to the estate or interest in real property being
     conveyed.
        "Material defect."  A problem with a residential real
     property or any portion of it that would have a significant
     adverse impact on the value of the property or that involves an
     unreasonable risk to people on the property. The fact that a
     structural element, system or subsystem is near, at or beyond
     the end of the normal useful life of such a structural element,
     system or subsystem is not by itself a material defect.
        "Seller."  Any person transferring any estate or interest in
     residential real property in a transfer subject to this part.
      § 7103.  Application of part.
        (a)  General rule.--This part shall apply to and the term
     "residential real estate transfer" when used in this part shall
     mean a transfer of any interest in real property located within
     this Commonwealth, other than a transfer described in subsection
     (b), that consists of not less than one nor more than four
     residential dwelling units, whether by sale, exchange,
     installment sales contract, lease with an option to purchase,
     grant or transfer of unit in a residential condominium or
     cooperative.
        (b)  Exceptions.--This part shall not apply to a transfer:
            (1)  Pursuant to court order, including, but not limited
        to, transfers ordered by a probate court in the
        administration of an estate, transfers pursuant to a writ of
        execution, transfers by a trustee in bankruptcy, transfers by
        eminent domain and condemnation and transfers resulting from
        a decree for specific performance.
            (2)  To a mortgagee by a mortgagor or successor in
        interest who is in default; to a beneficiary of a deed of
        trust by a trustee or successor in interest who is in
        default; by any foreclosure sale after default in an
        obligation secured by a mortgage; by a sale under a power of
        sale or any foreclosure sale under a decree of foreclosure
        after default in an obligation secured by a deed of trust or
        secured by any other instrument containing a power of sale;
        or by a mortgagee or a beneficiary under a deed of trust who
        has acquired the real property at a sale conducted pursuant
        to a power of sale under a mortgage or deed of trust or a
        sale pursuant to a decree of foreclosure or who has acquired
        the real property by a deed in lieu of foreclosure.
            (3)  From one co-owner to one or more other co-owners.
            (4)  Made to a spouse or to a person or persons in the
        lineal line of consanguinity of one or more of the
        transferors.
            (5)  Between spouses resulting from a decree of
        dissolution of marriage or a decree of legal separation or
        from a property settlement agreement incidental to the
        decree.
            (6)  By a corporation, partnership or other association
        to its shareholders, partners or other equity owners in
        connection with the liquidation of the corporation,
        partnership or other association.
            (7)  Of a property to be converted by the buyer into a
        use other than residential use or to be demolished.
            (8)  Of unimproved real property.
                                CHAPTER 73
                            SELLER DISCLOSURES
     Sec.
     7301.  Short title of chapter.
     7302.  Application of chapter.
     7303.  Disclosure of material defects.
     7304.  Disclosure form.
     7305.  Delivery of disclosure form.
     7306.  Information unavailable to seller.
     7307.  Information subsequently rendered inaccurate.
     7308.  Affirmative duty of seller.
     7309.  Nonliability of seller.
     7310.  Nonliability of agent.
     7311.  Failure to comply.
     7312.  Amendment of disclosure.
     7313.  Specification of items for disclosure no limitation on
                other disclosure obligations.
     7314.  Cause of action.
     7315.  Preemption of local requirements.
      § 7301.  Short title of chapter.
        This chapter shall be known and may be cited as the Real
     Estate Seller Disclosure Law.
      § 7302.  Application of chapter.
        (a)  General rule.--This chapter shall apply to all
     residential real estate transfers except the following:
            (1)  Transfers by a fiduciary in the course of the
        administration of a decedent's estate, guardianship,
        conservatorship or trust.
            (2)  Transfers of new residential construction that has
        not been previously occupied when:
                (i)  the buyer has received a one-year or longer
            written warranty covering such construction;
                (ii)  the dwelling has been inspected for compliance
            with the applicable building code or, if there is no
            applicable code, for compliance with a nationally
            recognized model building code; and
                (iii)  a certificate of occupancy or a certificate of
            code compliance has been issued for the dwelling.
        (b)  Limitations in the case of condominiums or
     cooperatives.--Any seller of a unit in a condominium created
     under Subpart B of Part II (relating to condominiums) or a
     similar provision of prior law or a cooperative as defined in
     section 4103 (relating to definitions) shall be obligated to
     make disclosures under this chapter only with respect to the
     seller's own unit and shall not be obligated by this chapter to
     make any disclosure with respect to any common elements or
     common facilities of the condominium or cooperative. The
     provisions of section 3407 (relating to resales of units) shall
     control disclosures a seller is required to make concerning
     common elements in a condominium, and section 4409 (relating to
     resales of cooperative interests) shall control disclosures a
     seller is required to make concerning common elements in a
     cooperative.
      § 7303.  Disclosure of material defects.
        Any seller who intends to transfer any interest in real
     property shall disclose to the buyer any material defects with
     the property known to the seller by completing all applicable
     items in a property disclosure statement which satisfies the
     requirements of section 7304 (relating to disclosure form). A
     signed and dated copy of the property disclosure statement shall
     be delivered to the buyer in accordance with section 7305
     (relating to delivery of disclosure form) prior to the signing
     of an agreement of transfer by the seller and buyer with respect
     to the property.
      § 7304.  Disclosure form.
        (a)  General rule.--A form of property disclosure statement
     that satisfies the requirements of this chapter shall be
     promulgated by the State Real Estate Commission. Nothing in this
     chapter shall preclude a seller from using a form of property
     disclosure statement that contains additional provisions that
     require greater specificity or that call for the disclosure of
     the condition or existence of other features of the property.
        (b)  Contents of property disclosure statement.--The form of
     property disclosure statement promulgated by the State Real
     Estate Commission shall call for disclosures with respect to all
     of the following subjects:
            (1)  Seller's expertise in contracting, engineering,
        architecture or other areas related to the construction and
        conditions of the property and its improvements.
            (2)  When the property was last occupied by the seller.
            (3)  Roof.
            (4)  Basements and crawl spaces.
            (5)  Termites/wood destroying insects, dry rot and pests.
            (6)  Structural problems.
            (7)  Additions, remodeling and structural changes to the
        property.
            (8)  Water and sewage systems or service.
            (9)  Plumbing system.
            (10)  Heating and air conditioning.
            (11)  Electrical system.
            (12)  Other equipment and appliances included in the
        sale.
            (13)  Soils, drainage and boundaries.
            (14)  Presence of hazardous substances.
            (15)  Condominiums and other homeowners associations.
            (16)  Legal issues affecting title or that would
        interfere with use and enjoyment of the property.
        (c)  Transitional rule.--Until a form of property disclosure
     statement has been promulgated by the commission, the form
     prescribed under the act of July 2, 1996 (P.L.500, No.84), known
     as the Real Estate Seller Disclosure Act, shall be deemed to be
     the form contemplated under subsection (b).
      § 7305.  Delivery of disclosure form.
        (a)  Method of delivery.--The seller shall deliver the
     property disclosure statement to the buyer by personal delivery;
     first class mail; certified mail, return receipt requested; or
     facsimile transmission to the buyer or the buyer's agent.
        (b)  Parties to whom delivered.--For purposes of this
     chapter, delivery to one prospective buyer or buyer's agent is
     deemed delivery to all persons intending to take title as co-
     tenants, joint tenants or as a tenant by the entireties with the
     buyer. Receipt may be acknowledged on the statement, in an
     agreement of transfer for the residential real property or shown
     in any other verifiable manner.
      § 7306.  Information unavailable to seller.
        If at the time the disclosures are required to be made, an
     item of information required to be disclosed is unknown or not
     available to the seller, the seller may make a disclosure based
     on the best information available to the seller.
      § 7307.  Information subsequently rendered inaccurate.
        If information disclosed in accordance with this chapter is
     subsequently rendered inaccurate prior to final settlement as a
     result of any act, occurrence or agreement subsequent to the
     delivery of the required disclosures, the seller shall notify
     the buyer of the inaccuracy.
      § 7308.  Affirmative duty of seller.
        The seller is not obligated by this chapter to make any
     specific investigation or inquiry in an effort to complete the
     property disclosure statement. In completing the property
     disclosure statement, the seller shall not make any
     representations that the seller or the agent for the seller
     knows or has reason to know are false, deceptive or misleading
     and shall not fail to disclose a known material defect.
      § 7309.  Nonliability of seller.
        (a)  General rule.--A seller shall not be liable for any
     error, inaccuracy or omission of any information delivered
     pursuant to this chapter if:
            (1)  the seller had no knowledge of the error, inaccuracy
        or omission;
            (2)  the error, inaccuracy or omission was based on a
        reasonable belief that a material defect or other matter not
        disclosed had been corrected; or
            (3)  the error, inaccuracy or omission was based on
        information provided by a public agency, home inspector,
        contractor or person registered or licensed under an act
        referred to in section 7503(a) (relating to relationship to
        other laws) about matters within the scope of the agency's
        jurisdiction or such other person's occupation and the seller
        had no knowledge of the error, inaccuracy or omission.
        (b)  Delivery of information by public agency.--The delivery
     of any information required to be disclosed by this chapter to a
     prospective buyer by a public agency or other person providing
     information required to be disclosed under this chapter shall be
     deemed to comply with the requirements of this chapter and shall
     relieve the seller or the agent of the seller from any further
     duty under this chapter with respect to that item of
     information.
        (c)  Report by expert.--The delivery of a report or opinion
     prepared by a home inspector, contractor or person registered or
     licensed under an act referred to in section 7503(a) dealing
     with matters within the scope of the person's registration,
     license or expertise shall be sufficient compliance for
     application of the exemption provided under subsection (a)(3) if
     the information is provided to the prospective buyer in writing.
      § 7310.  Nonliability of agent.
        An agent of a seller or a buyer shall not be liable for any
     violation of this chapter unless the agent had actual knowledge
     of a material defect that was not disclosed to the buyer or of a
     misrepresentation relating to a material defect.
      § 7311.  Failure to comply.
        (a)  General rule.--A residential real estate transfer
     subject to this chapter shall not be invalidated solely because
     of the failure of any person to comply with any provision of
     this chapter. However, any person who willfully or negligently
     violates or fails to perform any duty prescribed by any
     provision of this chapter shall be liable in the amount of
     actual damages suffered by the buyer as a result of a violation
     of this chapter. This subsection shall not be construed so as to
     restrict or expand the authority of a court to impose punitive
     damages or apply other remedies applicable under any other
     provision of law.
        (b)  Statute of limitations.--An action for damages as a
     result of a violation of this chapter must be commenced within
     two years after the date of final settlement.
      § 7312.  Amendment of disclosure.
        Any disclosure made pursuant to this chapter may be amended
     in writing by the seller prior to the signing of an agreement of
     transfer by the seller and buyer.
      § 7313.  Specification of items for disclosure no limitation on
                other disclosure obligations.
        (a)  General rule.--The specification of items for disclosure
     in this chapter or in any form of property disclosure statement
     promulgated by the State Real Estate Commission does not limit
     or abridge any obligation for disclosure created by any other
     provision of law or that may exist in order to avoid fraud,
     misrepresentation or deceit in the transaction.
        (b)  Responsibility of licensee.--Nothing in this chapter
     shall abrogate or diminish the responsibility of a licensee
     under the act of February 19, 1980 (P.L.15, No.9), known as the
     Real Estate Licensing and Registration Act.
        (c)  Duty to provide form.--An agent representing a seller
     must advise a seller of the seller's responsibilities under this
     chapter and must provide the seller with a copy of the form of
     property disclosure statement.
      § 7314.  Cause of action.
        A buyer shall not have a cause of action under this chapter
     against the seller or the agent for either or both of the seller
     or the buyer for:
            (1)  material defects to the property disclosed to the
        buyer prior to the signing of an agreement of transfer by the
        seller and buyer;
            (2)  material defects that develop after the signing of
        the agreement of transfer by the seller and buyer; or
            (3)  material defects that occur after final settlement.
      § 7315.  Preemption of local requirements.
        (a)  General rule.--Except as provided in subsection (b), a
     municipality or local authority shall not have the power to
     mandate that:
            (1)  a seller or an agent of either or both the seller
        and the buyer make any particular disclosures to the buyer in
        connection with a residential real estate transfer; or
            (2)  provisions on any particular subject be included in
        an agreement of transfer.
        (b)  Exception.--Subsection (a) shall not apply to an
     ordinance or regulation adopted by a municipality or local
     authority before the effective date of this section, and such an
     ordinance or regulation shall continue in full force and effect,
     except that the municipality or local authority shall not have
     the power after that date to amend the ordinance or regulation
     in a manner that:
            (1)  imposes new or expanded disclosure requirements;
            (2)  increases the scope of any provision that must be
        included in an agreement of transfer; or
            (3)  imposes new requirements on any agent, buyer or
        seller involved in a residential real estate transfer.
                                CHAPTER 75
                             HOME INSPECTIONS
     Sec.
     7501.  Short title of chapter.
     7502.  Definitions and index of definitions.
     7503.  Relationship to other laws.
     7504.  Duty of care of home inspectors.
     7505.  Consumer remedies.
     7506.  Required contractual provision regarding home
            inspections.
     7507.  Contracts with home inspectors.
     7508.  Home inspection reports.
     7509.  Liability insurance.
     7510.  Reliance by buyer.
     7511.  Penalties.
     7512.  Statute of limitations.
      § 7501.  Short title of chapter.
        This chapter shall be known and may be cited as the Home
     Inspection Law.
      § 7502.  Definitions and index of definitions.
        (a)  Definitions.--The following words and phrases when used
     in this chapter shall have the meanings given to them in this
     section unless the context clearly indicates otherwise:
        "Home inspection."  A noninvasive visual examination of some
     combination of the mechanical, electrical or plumbing systems or
     the structural and essential components of a residential
     dwelling designed to identify material defects in those systems
     and components and performed for a fee in connection with or
     preparation for a proposed or possible residential real estate
     transfer. The term also includes any consultation regarding the
     property that is represented to be a home inspection or that is
     described by any confusingly similar term. The term does not
     include an examination of a single system or component of a
     residential dwelling such as, for example, its electrical or
     plumbing system or its roof. The term also does not include an
     examination that is limited to inspection for or of one or more
     of the following: wood destroying insects, underground tanks and
     wells, septic systems, swimming pools and spas, alarm systems,
     air and water quality, tennis courts and playground equipment,
     pollutants, toxic chemicals and environmental hazards.
        "Home inspection report."  A written report on the results of
     a home inspection.
        "Home inspector."  An individual who performs a home
     inspection.
        "National home inspectors association."  Any national
     association of home inspectors that:
            (1)  Is operated on a not-for-profit basis and is not
        operated as a franchise.
            (2)  Has members in more than ten states.
            (3)  Requires that a person may not become a full member
        unless the person has performed or participated in more than
        100 home inspections and has passed a recognized or
        accredited examination testing knowledge of the proper
        procedures for conducting a home inspection.
            (4)  Requires that its members comply with a code of
        conduct and attend continuing professional education classes
        as an ongoing condition of membership.
        (b)  Index of other definitions.--The following is a
     nonexclusive list of other definitions applying to this chapter
     and the sections in which they appear:
        "Agent."  Section 7102 (relating to definitions).
        "Agreement of transfer."  Section 7102 (relating to
     definitions).
        "Buyer."  Section 7102 (relating to definitions).
        "Material defect."  Section 7102 (relating to definitions).
        "Residential real estate transfer."  Section 7103 (relating
     to application of part).
        "Seller."  Section 7102 (relating to definitions).
      § 7503.  Relationship to other laws.
        (a)  General rule.--Nothing in this chapter shall be
     construed to allow a home inspector who is not registered or
     licensed under one or more of the following laws to perform any
     activity that would constitute the practice of the profession
     regulated by that law:
            (1)  The act of May 23, 1945 (P.L.913, No.367), known as
        the Engineer, Land Surveyor and Geologist Registration Law.
            (2)  The act of January 24, 1966 (1965 P.L.1535, No.537),
        known as the Pennsylvania Sewage Facilities Act.
            (3)  The act of March 1, 1974 (P.L.90, No.24), known as
        the Pennsylvania Pesticide Control Act of 1973.
            (4)  The act of December 14, 1982 (P.L.1227, No.281),
        known as the Architects Licensure Law.
            (5)  The act of July 9, 1987 (P.L.238, No.43), known as
        the Radon Certification Act.
            (6)  The act of July 10, 1990 (P.L.404, No.98), known as
        the Real Estate Appraisers Certification Act.
        (b)  Exclusions.--This chapter shall not:
            (1)  Apply to a person registered or licensed under an
        act referred to in subsection (a) when acting pursuant to his
        registration or license.
            (2)  Apply to an officer or employee of a municipality or
        local authority when acting in his official capacity.
            (3)  Affect the obligations or immunities of a person
        licensed under the act of February 19, 1980 (P.L.15, No.9),
        known as the Real Estate Licensing and Registration Act, that
        are imposed or provided by that act or Chapter 73 (relating
        to seller disclosures) when the person is acting pursuant to
        his license.
            (4)  Affect the obligations or immunities of a person
        certified under the Real Estate Appraisers Certification Act,
        when the person is acting pursuant to the person's license.
      § 7504.  Duty of care of home inspectors.
        (a)  General rule.--It is the duty of a home inspector to
     conduct a home inspection with the degree of care that a
     reasonably prudent home inspector would exercise.
        (b)  Standard.--In ascertaining the degree of care that would
     be exercised by a reasonably prudent home inspector, the court
     shall consider the standards of practice and codes of ethics of
     national home inspector associations.
      § 7505.  Consumer remedies.
        (a)  General rule.--The performance of a home inspection is a
     service that is subject to the act of December 17, 1968
     (P.L.1224, No.387), known as the Unfair Trade Practices and
     Consumer Protection Law.
        (b)  Prohibited acts.--Any of the following acts engaged in
     by a home inspector, an employer of a home inspector or another
     business or person that controls or has a financial interest in
     the employer of a home inspector shall be deemed to be an unfair
     or deceptive act or practice as defined by section 2(4)(i)
     through (xxi) of the Unfair Trade Practices and Consumer
     Protection Law:
            (1)  Performing or offering to perform for an additional
        fee any repairs to a structure with respect to which the home
        inspector, the employer of the home inspector or such other
        business or person has prepared a home inspection report
        within the preceding 12 months, except that this paragraph
        shall not apply to remediation for radon or wood destroying
        insects.
            (2)  Inspecting for a fee any property in which the home
        inspector, the employer of the home inspector or such other
        business or person has any financial interest or any interest
        in the transfer of the property, including without limitation
        receipt of a commission as an agent, unless the financial
        interest or interest in the transfer of the property is
        disclosed in writing to the buyer before the home inspection
        is performed and the buyer signs an acknowledgment of receipt
        of the disclosure.
            (3)  Offering or delivering any commission, referral fee
        or kickback to the seller of the inspected property or to an
        agent for either or both of the seller and the buyer for the
        referral of any business to the home inspector, the employer
        of the home inspector or such other business or person.
            (4)  Accepting an engagement to perform a home inspection
        or to prepare a home inspection report in which the
        employment itself or the fee payable for the inspection is
        contingent upon the conclusions in the report, preestablished
        or prescribed findings or the closing of the transaction.
        (c)  Exception.--A home warranty company that is affiliated
     with or retains the home inspector does not violate subsection
     (b) if the home warranty company performs repairs pursuant to
     claims made under a home warranty contract.
        (d)  Remedies.--In addition to any other remedies available
     under the Unfair Trade Practices and Consumer Protection Law or
     other applicable provision of law, the owner of a property on
     which repairs are performed in violation of subsection (b)(1)
     shall be entitled to a full refund of any moneys paid for those
     repairs, and any promissory note or other obligation to pay
     given to the person performing those repairs shall be void.
      § 7506.  Required contractual provision regarding home
                inspections.
        A provision of an agreement of transfer regarding the right
     of the buyer to obtain a home inspection report and providing
     for the consequences, if any, shall provide that the home
     inspection be performed by a full member in good standing of a
     national home inspection association in accordance with the
     ethical standards and code of conduct or practice of that
     association. A home inspection performed by a person who has not
     attained full membership in a national home inspection
     association satisfies the requirements of this section if the
     person is supervised by a full member in good standing of a
     national home inspection association who agrees to be
     responsible for the home inspection report by signing the
     report.
      § 7507.  Contracts with home inspectors.
        (a)  Prohibited provisions.--The following types of
     provisions in a contract with a home inspector for the
     performance of a home inspection are contrary to public policy
     and shall be void:
            (1)  a limitation on the liability of the home inspector
        for gross negligence or willful misconduct;
            (2)  a waiver or modification of any provision of this
        chapter.
        (b)  Scope of inspection.--The scope of a home inspection,
     the services to be performed and the systems and conditions to
     be inspected or excluded from inspection may be defined by a
     contract between the home inspector and the client.
      § 7508.  Home inspection reports.
        (a)  Required contents.--A home inspection report must be in
     writing and shall include:
            (1)  A description of the scope of the inspection,
        including without limitation an identification of the
        structural elements, systems and subsystems covered by the
        report.
            (2)  A description of any material defects noted during
        the inspection, along with any recommendation that certain
        experts be retained to determine the extent of the defects
        and any corrective action that should be taken. A "material
        defect" as defined in section 7102 (relating to definitions)
        that poses an unreasonable risk to people on the property
        shall be conspicuously identified as such.
            (3)  The following statements, set forth conspicuously:
                "A home inspection is intended to assist in
            evaluation of the overall condition of the dwelling. The
            inspection is based on observation of the visible and
            apparent condition of the structure and its components on
            the date of inspection."
                "The results of this home inspection are not intended
            to make any representation regarding the presence or
            absence of latent or concealed defects that are not
            reasonably ascertainable in a competently performed home
            inspection. No warranty or guaranty is expressed or
            implied."
                "If the person conducting your home inspection is not
            a licensed structural engineer or other professional
            whose license authorizes the rendering of an opinion as
            to the structural integrity of a building or its other
            component parts, you may be advised to seek a
            professional opinion as to any defects or concerns
            mentioned in the report."
                "This home inspection report is not to be construed
            as an appraisal and may not be used as such for any
            purpose."
        (b)  Confidentiality.--Except as otherwise required by law, a
     home inspector shall not deliver a home inspection report to any
     person other than the client of the home inspector without the
     client's consent. The seller shall have the right, upon request,
     to receive without charge a copy of a home inspection report
     from the person for whom it was prepared.
        (c)  Repair estimates prohibited.--A home inspector shall not
     express either orally or in writing an estimate of the cost to
     repair any defect found during a home inspection, except that
     such an estimate may be included in a home inspection report if:
            (1)  the report identifies the source of the estimate;
            (2)  the estimate is stated as a range of costs; and
            (3)  the report states that the parties should consider
        obtaining an estimate from a contractor who performs the type
        of repair involved.
      § 7509.  Liability insurance.
        (a)  Required insurance.--A home inspector shall maintain
     insurance against errors and omissions in the performance of a
     home inspection and general liability, with coverages of not
     less than $100,000 per occurrence and $500,000 in the aggregate
     and with deductibles of not more than $2,500.
        (b)  Term.--
            (1)  Except as set forth in paragraph (2), a home
        inspector shall maintain insurance under subsection (a) for
        at least one year after the latest home inspection report the
        home inspector delivers.
            (2)  Paragraph (1) shall not apply to a home inspection
        report that was delivered prior to the effective date of this
        section.
      § 7510.  Reliance by buyer.
        A buyer shall be entitled to rely in good faith, without
     independent investigation, on a written representation by a home
     inspector that the home inspector is a full member in good
     standing of a national home inspection association.
      § 7511.  Penalties.
        (a)  Criminal penalty.--A person who violates section 7509
     (relating to liability insurance) or who provides a false
     representation under section 7510 (relating to reliance by
     buyer) commits a summary offense and, upon conviction thereof
     for a first offense, shall be sentenced to pay a fine not
     exceeding $500 or to imprisonment for not more than three
     months, or both, and for a second or subsequent offense commits
     a misdemeanor of the third degree and, upon conviction thereof,
     shall be sentenced to pay a fine of not less than $2,000 but not
     more than $5,000 or to imprisonment for not less than one year
     but not more than two years, or both.
        (b)  Fine.--A person who violates any provision of section
     7508 (relating to home inspection reports) shall, upon
     conviction in a summary proceeding before a district justice, be
     sentenced to pay a fine not exceeding $500.
      § 7512.  Statute of limitations.
        An action to recover damages arising from a home inspection
     report must be commenced within one year after the date the
     report is delivered.
        Section 2.  The act of July 2, 1996 (P.L.500, No.84), known
     as the Real Estate Seller Disclosure Act, is repealed.
        Section 3.  This act shall take effect in one year.

     APPROVED--The 20th day of December, A. D. 2000.

     THOMAS J. RIDGE

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