H. B. No. 604 As Introduced

As Introduced

129th General Assembly

Regular Session

2011-2012

H. B. No. 604

Representative Patmon

A BILL

To amend sections 4722.02 and 4745.01 and to enact

sections 4785.01 to 4785.17, 4785.20, and 4785.99

of the Revised Code to require licensure of

residential construction contractors and to create

the Residential Builders' and Maintenance and

Alteration Contractors' Licensing Board to

regulate the licensure and performance of

residential construction contractors.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 4722.02 and 4745.01 be amended and	9
sections 4785.01, 4785.02, 4785.03, 4785.04, 4785.05, 4785.06,	10
4785.07, 4785.08, 4785.09, 4785.10, 4785.11, 4785.12, 4785.13,	11
4785.14, 4785.15, 4785.16, 4785.17, 4785.20, and 4785.99 of the	12
Revised Code be enacted to read as follows:	13

Sec. 4722.02. (A) Except as provided in division (C) of this	14
section, no home construction service supplier shall perform any	15
home construction service the cost of which equals or exceeds	16
twenty-five thousand dollars unless the supplier enters into a	17
written home construction services contract with the owner. The	18
contract shall include all agreements and conditions related to	19
the home construction service, including all of the following:	20

(1) The supplier's name, physical business address, business	21
telephone number, ~~and~~ taxpayer identification number, and	22
information regarding the supplier's license issued under Chapter	23
4785. of the Revised Code;	24

(2) The owner's name, address, and telephone number;

(3) The address or location of the property where the home	26
construction service is to be performed;	27

(4) A general description of the home construction service,	28
including the goods and services to be furnished as part of the	29
service;	30

(5) The anticipated date or time period the home construction	31
service is to begin and the anticipated date or time period it is	32
to be completed;	33

(6) The total estimated cost of the home construction	34
service;	35

(7) Any cost of installation, delivery, or other cost that	36
the total estimated cost does not cover;	37

(8) A copy of the supplier's certificate of insurance showing	38
general liability coverage in an amount of not less than two	39
hundred fifty thousand dollars;	40

(9) The dated signatures of the owner and the supplier.

(B)(1) If the total amount of reasonably unforeseen, but	42
necessary, excess costs of a home construction service at any time	43
exceeds five thousand dollars over the course of the entire home	44
construction contract, prior to performing the work related to the	45
excess costs, the home construction service supplier shall provide	46
an owner with a notice that contains a written or oral estimate,	47
depending on which type the owner has designated in the contract.	48

(2) To determine the type of notice an owner requires when	49
the costs of a home construction service exceed the estimate	50
provided in the contract, the contract shall include a statement	51
in substantially the following language:	52

"EXCESS COSTS

IF AT ANY TIME A HOME CONSTRUCTION SERVICE REQUIRES EXTRA	54
COSTS ABOVE THE COST SPECIFIED OR ESTIMATED IN THE CONTRACT THAT	55
WERE REASONABLY UNFORESEEN, BUT NECESSARY, AND THE TOTAL OF ALL	56
EXTRA COSTS TO DATE EXCEEDS FIVE THOUSAND DOLLARS OVER THE COURSE	57
OF THE ENTIRE HOME CONSTRUCTION CONTRACT, YOU HAVE A RIGHT TO AN	58
ESTIMATE OF THOSE EXCESS COSTS BEFORE THE HOME CONSTRUCTION	59
SERVICE SUPPLIER BEGINS WORK RELATED TO THOSE COSTS. INITIAL YOUR	60
CHOICE OF THE TYPE OF ESTIMATE YOU REQUIRE:	61

..... written estimate ..... oral estimate"	62

(3) If the contract stipulates that the specified cost of the	63
home construction service is a firm price and the home	64
construction service supplier will not charge the owner with any	65
excess costs, the home construction service supplier need not	66
comply with the notice requirements of this division.	67

(C) A home construction service supplier who enters into a	68
cost-plus contract with an owner for a home construction service	69
need not comply with the requirements in divisions (A) and (B) of	70
this section.	71

Sec. 4745.01. (A) "Standard renewal procedure," as used in	72
Chapters 905., 907., 909., 911., 913., 915., 918., 921., 923.,	73
927., 942., 943., 953., 1321., 3710., 3713., 3719., 3742., 3748.,	74
3769., 3783., 3921., 3951., 4104., 4105., 4143., 4169., 4561.,	75
4703., 4707., 4709., 4713., 4715., 4717., 4723., 4725., 4727.,	76
4728., 4729., 4731., 4733., 4734., 4735., 4739., 4741., 4747.,	77
4749., 4752., 4753., 4755., 4757., 4758., 4759., 4761., 4766.,	78
4773., ~~and~~ 4775., and 4785. of the Revised Code, means the license	79
renewal procedures specified in this chapter.	80

(B) "Licensing agency," as used in this chapter, means any	81
department, division, board, section of a board, or other state	82
governmental unit subject to the standard renewal procedure, as	83
defined in this section, and authorized by the Revised Code to	84
issue a license to engage in a specific profession, occupation, or	85
occupational activity, or to have charge of and operate certain	86
specified equipment, machinery, or premises.	87

(C) "License," as used in this chapter, means a license,	88
certificate, permit, card, or other authority issued or conferred	89
by a licensing agency by authority of which the licensee has or	90
claims the privilege to engage in the profession, occupation, or	91
occupational activity, or to have control of and operate certain	92
specific equipment, machinery, or premises, over which the	93
licensing agency has jurisdiction.	94

(D) "Licensee," as used in this chapter, means either the	95
person to whom the license is issued or renewed by a licensing	96
agency, or the person, partnership, or corporation at whose	97
request the license is issued or renewed.	98

(E) "Renewal" and "renewed," as used in this chapter and in	99
the chapters of the Revised Code specified in division (A) of this	100
section, includes the continuing licensing procedure provided in	101
Chapter 3748. of the Revised Code and rules adopted under it and	102
in sections 1321.05 and 3921.33 of the Revised Code, and as	103
applied to those continuing licenses any reference in this chapter	104
to the date of expiration of any license shall be construed to	105
mean the due date of the annual or other fee for the continuing	106
license.	107

Sec. 4785.01. As used in this chapter:

108

(A) "Nonresidential building" and "residential building" have	109
the same meanings as in section 3781.06 of the Revised Code.	110

(B) "Residential builder" means either of the following:

111

(1) A person who is engaged in the construction of a	112
residential building or a combination residential and	113
nonresidential building and who, for a fixed sum, price, fee,	114
percentage, valuable consideration, or other compensation other	115
than wages for personal labor only, undertakes with another or	116
offers to undertake or purports to have the capacity to undertake	117
with another for the erection, construction, replacement, repair,	118
alteration, or an addition to, subtraction from, improvement of,	119
wrecking of, or demolition of, a residential building or	120
combination residential and nonresidential building;	121

(2) A person who erects a residential building or combination	122
residential and nonresidential building.	123

(C) "Residential maintenance and alteration contractor" means	124
either of the following:	125

(1) A person who, for a fixed sum, price, fee, percentage,	126
valuable consideration, or other compensation other than wages for	127
personal labor only, undertakes with another for the repair,	128
alteration, or an addition to, subtraction from, improvement of,	129
wrecking of, or demolition of a residential building or	130
combination residential and nonresidential building, the building	131
of a garage, or laying of concrete on residential property;	132

(2) A person who engages in the purchase, substantial	133
rehabilitation or improvement, and resale of a residential	134
building, and who engages in that activity on the same building	135
more than twice in one calendar year.	136

(D)(1) "Salesperson" means an employee or agent, other than a	137
qualifying officer, of a residential builder or residential	138
maintenance and alteration contractor licensed under this chapter,	139
who for a salary, wage, fee, percentage, commission, or other	140
consideration, sells or attempts to sell, negotiates or attempts	141
to negotiate, solicits for or attempts to solicit for, obtains or	142
attempts to obtain a contract or commitment for, or furnishes or	143
attempts or agrees to furnish, the goods and services of a	144
residential builder or residential maintenance and alteration	145
contractor.	146

(2) "Salesperson" does not include a person working for a	147
residential builder or residential maintenance and alteration	148
contractor licensed under this chapter who makes sales that are	149
occasional and incidental to the person's principal employment.	150

(E) "Wages" means money paid or to be paid on an hourly or	151
daily basis by an owner, lessor, or occupant of a residential	152
building or combination residential and nonresidential building as	153
consideration for the performance of personal labor on the	154
structure by a person who does not perform or promise to perform	155
the labor for any other fixed sum, price, fee, percentage,	156
valuable consideration, or other compensation and who does not	157
furnish or agree to furnish the material or supplies required to	158
be used in the performance of the labor or an act listed in	159
division (B) or (C) of this section.	160

Sec. 4785.02. (A) Except as otherwise provided in division	161
(B) of this section, no person shall engage or attempt to engage	162
in the practice of a residential builder, residential maintenance	163
and alteration contractor, or salesperson unless the person is	164
licensed pursuant to this chapter.	165

(B) This chapter does not apply to any of the following	166
persons:	167

(1) An authorized representative of the United States	168
government, this state, or a political subdivision of this state;	169

(2) An owner of property, with reference to a residential	170
building on the property for the owner's own use and occupancy;	171

(3) An owner of rental residential property, with reference	172
to the maintenance and alteration of that property;	173

(4) An officer of the court acting within the terms of the	174
officer's office;	175

(5) A person other than a salesperson who engages solely in	176
the business of performing work and services under contract with a	177
residential builder or a residential maintenance and alteration	178
contractor licensed under this chapter;	179

(6) A person working on one undertaking or project by one or	180
more contracts, the aggregate contract price for which labor,	181
material, and any other item is less than six hundred dollars;	182

(7) An electrical contractor who is licensed under Chapter	183
4740. of the Revised Code or who holds a certificate issued by the	184
state fire marshal pursuant to section 3737.65 of the Revised	185
Code, only with respect to the electrical installation,	186
maintenance, or repair work performed by the contractor;	187

(8) A plumbing contractor licensed under Chapter 4740. of the	188
Revised Code only with respect to plumbing installation,	189
maintenance, or repair work performed by the contractor;	190

(9) A heating, ventilating, and air conditioning contractor	191
licensed under Chapter 4740. of the Revised Code, only with	192
respect to any heating, ventilating, and air conditioning	193
installation, maintenance, or repair work performed by the	194
contractor;	195

(10) A refrigeration contractor licensed under Chapter 4740.	196
of the Revised Code, only with respect to refrigeration	197
installation, maintenance, or repair work performed by the	198
contractor.	199

(C) The exemption described in division (B)(6) of this	200
section does not apply if the work is only a part of a larger or	201
major operation, regardless of whether the operation is undertaken	202
by the same or a different residential builder or residential	203
maintenance and alteration contractor, or in which a division of	204
the operation is made in contracts of amounts less than six	205
hundred dollars to evade compliance with this chapter.	206

Sec. 4785.03. (A) There is hereby created in the department	207
of commerce the residential builders' and maintenance and	208
alteration contractors' board. The board shall consist of the	209
following nine members, who shall be appointed by the governor	210
with the advice and consent of the senate:	211

(1) Four members who are residential builders licensed under	212
this chapter;	213

(2) Two members who are maintenance and alteration	214
contractors licensed under this chapter;	215

(3) Three members who represent the general public, one of	216
whom is certified under section 3781.10 of the Revised Code to	217
inspect residential buildings.	218

(B) Each member of the board shall be at least eighteen years	219
of age and shall be a resident of this state. The director of	220
commerce is an ex officio member of the board and shall not vote	221
on any matter before the board and is not a member for purposes of	222
determining whether a quorum is present. In making appointments to	223
the board, the governor shall seek nominations from a wide range	224
of interested groups and persons, including appropriate	225
professional associations, consumer associations, labor unions,	226
and other organizations or individuals.	227

(C) Not later than ninety days after the effective date of	228
this section, the governor shall make the initial appointments to	229
the board. Of the initial appointments to the board, one member	230
representing residential builders, one member representing	231
residential maintenance and alteration contractors, and one member	232
representing the general public shall be appointed for terms of	233
four years; two members representing residential builders and one	234
member representing the general public shall be appointed for	235
terms of three years; and the remaining members shall be appointed	236
for a term of two years. Thereafter, each term shall be for four	237
years, ending on the same day of the same month as the term that	238
it succeeds. Each member shall hold office from the date of	239
appointment until the end of the term for which appointed.	240
Vacancies shall be filled in the manner provided for original	241
appointments. A member appointed to fill a vacancy prior to the	242
expiration of a term shall hold office for the remainder of that	243
term. A member shall continue in office subsequent to the	244
expiration of the term until the member's successor takes office.	245
No member may be appointed for more than two consecutive terms of	246
four years.	247

(D) Each member of the board shall be paid an amount fixed	248
pursuant to division (J) of section 124.15 of the Revised Code for	249
each day or portion thereof spent in the discharge of the member's	250
official duties and shall be reimbursed for the member's actual	251
and necessary expenses incurred in the discharge of those duties.	252

(E) The board shall meet as often as necessary to fulfill its	253
duties under this chapter, but shall meet not less than twice a	254
year and at other dates set by the director. A majority of the	255
members appointed and serving shall constitute a quorum. A member	256
of a board shall not vote by proxy.	257

(F) The board annually shall elect a chairperson, a	258
vice-chairperson, and other officers the board determines	259
necessary. The board may adopt bylaws for the regulation of its	260
internal affairs. The board shall report its activities to the	261
director annually and at any additional time as the director	262
requests.	263

Sec. 4785.04. (A) The residential builders' and maintenance	264
and alteration contractors' board shall do all of the following:	265

(1) Interpret a licensure requirement of this chapter, and,	266
if necessary, furnish aid in an investigation conducted under	267
section 4785.10 of the Revised Code;	268

(2) Assist the director of commerce in implementing this	269
chapter;	270

(3) Adopt any rules as required under this chapter that are	271
necessary and appropriate in accordance with Chapter 119. of the	272
Revised Code;	273

(4) Impose, after a hearing conducted pursuant to Chapter	274
119. of the Revised Code, any penalties that the board determines	275
appropriate in accordance with sections 4785.12 and 4785.13 of the	276
Revised Code;	277

(5) Aid the director in interpreting a licensure requirement	278
set forth in this chapter that is incomplete or subjective in	279
nature to determine whether the person seeking a license or a	280
renewal has satisfied the requirements for the license or renewal;	281

(6) Develop with the director the examinations required under	282
sections 4785.05 and 4785.09 of the Revised Code.	283

(B) The examinations developed by the board and the director	284
pursuant to division (A)(6) of this section shall test an	285
applicant's or licensee's knowledge of the obligations of a	286
residential builder or residential maintenance and alteration	287
contractor to the public and to the applicant's or licensee's	288
principal, and the applicant's or licensee's knowledge of the laws	289
relating to the license for which the applicant applied or that	290
the licensee holds.	291

The board and the director, in developing the examination	292
under that division, may adopt an examination or test prepared by	293
another agency if the board and the director determine that the	294
examination or test serves as a basis for determining whether a	295
person has the knowledge and skills to perform as a residential	296
builder, residential maintenance and alteration contractor, or	297
salesperson. Notwithstanding section 121.22 of the Revised Code,	298
the material required by the board and the director to develop an	299
examination may be considered by the board in an executive	300
session, if the board satisfies the requirements of division (G)	301
of that section. The board and the director, in determining the	302
form of the recommended examination, shall give special emphasis	303
to an alternative form of testing that permits a person to	304
demonstrate a special qualification the person may have that is	305
not evident under a written examination, but is related to being a	306
residential builder, residential maintenance and alteration	307
contractor, or salesperson. The alternative form of testing shall	308
be structured to give weight to a person's experience,	309
noninstitutional training, and innate skills and shall be flexible	310
enough to enable a person with a mental or physical disability to	311
demonstrate that the person has the requisite knowledge and	312
skills.	313

(C)(1) A member of the board, at the discretion of the board,	314
may attend an informal conference conducted under section 4785.14	315
of the Revised Code.	316

(2) The board may adopt rules to establish the minimum	317
standards of acceptable practice as a residential builder,	318
residential maintenance and alteration contractor, or salesperson.	319

Sec. 4785.05. (A) The director of commerce shall issue a	320
license to an applicant for a residential builder license,	321
residential maintenance and alteration contractor license, or a	322
salesperson license if the applicant does all of the following:	323

(1) Satisfactorily demonstrates to the director that the	324
applicant is of good moral character and is financially stable;	325

(2) Submits a copy of a driver's license, commercial driver's	326
license, or state identification card issued pursuant to Chapter	327
4506. or 4507. of the Revised Code or the equivalent law of	328
another state, to demonstrate proof of identity;	329

(3) Passes the examination described in divisions (A)(6) and	330
(B) of section 4785.04 of the Revised Code;	331

(4) Maintains a principal place of business in this state;

332

(5) Pays the fees required under section 4785.20 of the	333
Revised Code.	334

(B) An applicant for a salesperson license is not required to	335
satisfy the requirement described in division (A)(4) of this	336
section to receive a salesperson license.	337

(C) Notwithstanding division (A) of this section, a person or	338
qualifying officer for a corporation or member of a partnership or	339
other business association who holds a residential builder or	340
residential maintenance and alteration contractor license is not	341
required to retake an examination for that license when applying	342
for an additional license. However, a residential maintenance and	343
alteration contractor who holds a license and applies for a	344
license as a residential builder is required to take an	345
examination for the residential builder license.	346

(D) A residential builder or residential maintenance and	347
alteration contractor shall submit the application for a	348
salesperson license on behalf of an employee of the builder or	349
contractor who wishes to be licensed as a salesperson.	350

(E) If a residential builder or residential maintenance and	351
alteration contractor has more than one place of business in this	352
state, the director shall issue a branch license to the	353
residential builder or residential maintenance and alteration	354
contractor for each place of business maintained. A residential	355
builder or residential maintenance and alteration contractor shall	356
submit an application to the director for each branch office.	357

(F) A residential builder or residential maintenance and	358
alteration contractor licensed under this chapter shall report to	359
the director a change of name or address or a change of members or	360
addresses of the partnership, association, or corporation holding	361
a license under this chapter within thirty days after the change	362
occurs.	363

Sec. 4785.06. (A)(1) A person issued a license as a	364
residential maintenance and alteration contractor under section	365
4785.05 of the Revised Code is authorized to engage in the	366
following crafts or trades:	367

(a) Carpentry;

368

(b) Concrete;

369

370

(d) Waterproofing a basement;

371

(e) Excavation;

372

(f) Insulation work;

373

(g) Masonry work;

374

(h) Painting and decorating;

375

(i) Roofing;

376

(j) Siding and gutters;

377

(k) Screen or storm sash installation;

378

(l) Tile and marble work;

379

(m) House wrecking.

380

(2) The director of commerce shall specify on the license the	381
particular craft or trade for which the licensee is qualified to	382
perform. Nothing in this section prohibits a residential	383
maintenance and alteration contractor from taking and executing a	384
contract involving the use of two or more crafts or trades if the	385
performance of the work in the craft or trade other than the craft	386
or trade for which the contractor is licensed is incidental and	387
supplemental to the performance of work in the craft or trade for	388
which the contractor is licensed.	389

(B) A salesperson shall be licensed in the employ of only one	390
residential builder or residential maintenance and alteration	391
contractor. If a licensed salesperson wishes to change employment	392
from one residential builder or residential maintenance and	393
alteration contractor to another, the salesperson shall forward	394
the license to the director of commerce and the new residential	395
builder or residential maintenance and alteration contractor shall	396
apply for a transfer and the issuance of a new license under the	397
salesperson's new employer.	398

Sec. 4785.07. If a corporation, partnership, association,	399
limited liability company, or other entity applies for a license	400
under section 4785.05 of the Revised Code, the applicant shall	401
designate one of its officers, partners, members, or managing	402
agents as a qualifying officer who, upon taking and passing the	403
examination, and satisfying all other requirements of this	404
chapter, shall receive a license to act for the entity. The	405
qualifying officer also shall obtain and maintain a license under	406
this chapter as an individual. The qualifying officer is	407
responsible for exercising the supervision or control of the	408
building or construction operations necessary to secure full	409
compliance with this chapter and the rules adopted under it. The	410
director of commerce shall not issue a license to a corporation,	411
partnership, association, limited liability company, or other	412
entity unless each partner, trustee, director, officer, or member	413
or a person exercising control of the entity is at least eighteen	414
years of age and satisfies the requirements for a license under	415
section 4785.05 of the Revised Code other than those requirements	416
relating to knowledge and experience. If an individual licensee is	417
also a qualifying officer, the director shall list the	418
individual's name and license number on any license issued to the	419
individual as a qualifying officer. In the case of a license	420
issued under this section, each officer, partner, member, or	421
managing agent, regardless of whether the person is the qualifying	422
officer, shall provide a copy of the person's driver's license,	423
commercial driver's license, or state identification card issued	424
pursuant to Chapter 4506. or 4507. of the Revised Code or the	425
equivalent law of another state for use by the director only for	426
identification purposes.	427

The license issued to a corporation, partnership,	428
association, limited liability company, or other entity is	429
suspended when a license or license application of a qualifying	430
officer, partner, trustee, director, officer, member, or a person	431
exercising control of the entity is suspended, revoked, or denied.	432
The suspension remains in effect until the residential builders'	433
and maintenance and alteration contractors' board determines that	434
the disability created by the suspension, revocation, or denial	435
has been removed.	436

If a qualifying officer of a licensee ceases to be the	437
licensee's qualifying officer, the licensee's license is	438
suspended. However, upon request, the director may permit the	439
license to remain in force for a reasonable time to permit the	440
qualification of a new qualifying officer.	441

Sec. 4785.08. Notwithstanding division (A)(4) of section	442
4785.05 of the Revised Code, the director of commerce may issue a	443
license under that section to an applicant who does not have a	444
principal place of business in this state if the applicant	445
otherwise complies with this chapter. The director shall not issue	446
a license to a foreign corporation as defined in section 1701.01	447
of the Revised Code unless the corporation is authorized to do	448
business in this state by the secretary of state. The applicant	449
shall file an irrevocable consent to service of process. The	450
consent shall be signed by the applicant or by an authorized	451
officer, member, or partner of the applicant and shall be	452
notarized. If the applicant is a corporation, the consent shall be	453
accompanied by a certified copy of the resolution of the	454
corporation authorizing the consent. A process or pleading served	455
upon the director shall be sufficient service upon the licensee. A	456
process or pleading served upon the director under this section	457
shall be in duplicate. The director immediately shall forward by	458
registered mail one copy of the process or pleading to the main	459
office of the licensee served.	460

Sec. 4785.09. A license issued under section 4785.05 or	461
4785.08 of the Revised Code is valid for a period of three years	462
after the date the license is issued. The license shall be renewed	463
in accordance with the standard renewal procedure under Chapter	464
4745. of the Revised Code, except that, notwithstanding section	465
4745.02 of the Revised Code, the director of commerce shall cause	466
to be mailed the notice and renewal application for a residential	467
builder or residential maintenance and alteration contractor	468
license on or before the sixtieth day prior to the expiration of	469
the license. The director shall renew a salesperson license if the	470
licensee so requests and pays the fee listed in section 4785.20 of	471
the Revised Code. To renew a residential builder license or	472
residential maintenance and alteration contractor license, a	473
licensee shall do all of the following:	474

(A) State in the renewal application that the licensee has a	475
current copy of the residential building code in effect in the	476
area where the licensee performs work;	477

(B) Pass the examination described in divisions (A)(6) and	478
(B) of section 4785.04 of the Revised Code;	479

(C) Pay the fees listed in section 4785.20 of the Revised	480
Code for the examination and renewal.	481

For purposes of section 4745.02 of the Revised Code, the	482
director shall not accept a renewal application for a residential	483
builder or residential alteration and maintenance contractor	484
license until the licensee passes the required examination.	485

Sec. 4785.10. (A) Any person may file a complaint with the	486
director of commerce that alleges that a person has violated this	487
chapter or a rule adopted or order issued under it. A complaint	488
shall be filed not later than eighteen months after the latest of	489
the following events regarding a residential building or a	490
combination of residential and nonresidential building:	491

(1) In the case of a residential maintenance and alteration	492
contract, completion of the contract or occupancy or purchase of	493
the building;	494

(2) In the case of a project involving construction of a new	495
residential building or requiring an occupancy permit, issuance of	496
the certificate of occupancy or temporary certificate of occupancy	497
or closing.	498

(B) A person shall describe in writing in the complaint	499
submitted to the director the factual basis for the allegation.	500
The person shall send a copy of the initial complaint to the	501
licensee identified in the complaint concurrent with the	502
submission of the complaint to the director.	503

(C) If the complaint is filed by an owner of a building, the	504
director shall proceed with an investigation only if the owner	505
demonstrates that the owner provided notice to the licensee	506
describing reasonable times and dates that the building was	507
accessible for any needed repairs and submits proof acceptable to	508
the director that the repairs were not made within sixty days	509
after the date the notice was sent. The director may waive the	510
requirements of this division if the director determines that a	511
waiver is necessary to safeguard the building or to protect an	512
occupant's health and safety. If the director waives the	513
requirements, the director may utilize any remedy available under	514
division (A) of section 4785.11 of the Revised Code.	515

(D) The director, upon receipt of a complaint, immediately	516
shall begin an investigation of the allegations of the complaint	517
and shall open a correspondence file. The director shall make a	518
written acknowledgment of the complaint within fifteen days after	519
receipt of the complaint to the person making the complaint. If	520
the complaint is made by the director, the director shall	521
designate one or more employees of the director to act as the	522
person making the complaint. The director shall conduct the	523
investigation.	524

(E) The director shall request the appropriate building	525
official to inspect the property that is the subject of the	526
complaint. Upon receipt of a building inspection report issued to	527
the director by a state or local building enforcement official	528
that verifies or confirms the substance of a complaint, the	529
director shall send by certified mail a copy of the verified	530
complaint to the licensee. If the director does not send a copy of	531
the verified complaint within thirty days after receipt of the	532
building inspection report, the residential builders' and	533
maintenance and alteration contractors' board shall not assess a	534
fine against the licensee under section 4785.13 of the Revised	535
Code, but the director may pursue restitution, license suspension,	536
or other remedies provided under that section.	537

(F) If the owner and a licensed residential builder or	538
residential maintenance and alteration contractor have agreed	539
contractually on mutually acceptable performance guidelines	540
relating to workmanship, the director shall consider those	541
guidelines in the director's evaluation of the complaint. The	542
guidelines shall be consistent with the residential building code	543
adopted pursuant to Chapter 3781. of the Revised Code.	544

(G) In furtherance of an investigation, the director may	545
request that the attorney general petition a court of competent	546
jurisdiction to issue a subpoena requiring a person to appear	547
before the director and be examined with reference to a matter	548
within the scope of the investigation and to produce books,	549
papers, or documents pertaining to the investigation.	550

Sec. 4785.11. (A) The director of commerce shall conclude an	551
investigation conducted under section 4785.10 of the Revised Code	552
within thirty days after the complaint is filed. The director may	553
take additional time if the director gives the parties to the	554
complaint written notice of the extension before the initial	555
thirty-day period expires.	556

If the investigation does not disclose a violation of this	557
chapter or a rule adopted or an order issued under it, the	558
director shall close the complaint. The director shall forward the	559
reasons for closing the complaint to the parties, who then may	560
provide additional information to reopen the complaint.	561

If the investigation discloses evidence of a violation, the	562
director shall prepare the appropriate action against the person,	563
which may be any of the following:	564

(1) A formal complaint;

565

(2) A cease and desist order;

566

(3) Summary suspension;

567

(4) A citation.

568

(B)(1) If the director issues a formal complaint under	569
division (A)(1) of this section, the director shall serve the	570
formal complaint upon the parties to the complaint. At the same	571
time, the director shall serve the respondent with a notice that	572
includes both of the following:	573

(a) An offer to choose one of the following:

574

(i) An opportunity to meet with the director to negotiate a	575
settlement of the matter;	576

(ii) An opportunity for a hearing under Chapter 119. of the	577
Revised Code.	578

(b) A description of the process for an informal conference	579
under section 4785.14 of the Revised Code and for a hearing under	580
Chapter 119. of the Revised Code.	581

(2) The respondent, within fifteen days after the receipt of	582
notice described in division (B)(1) of this section, shall select	583
one of the options described in that division. If a respondent	584
does not select one of those options within that time period, then	585
the director shall proceed with a hearing held under Chapter 119.	586
of the Revised Code.	587

(C) If a cease and desist order has been issued under	588
division (A)(2) of this section, the person ordered to cease and	589
desist may request a hearing in accordance with Chapter 119. of	590
the Revised Code. Upon a violation of a cease and desist order,	591
the attorney general may apply in a court with appropriate	592
jurisdiction to restrain and enjoin, temporarily or permanently,	593
or both, the person from further violating the cease and desist	594
order.	595

(D) The director may issue a summary suspension under	596
division (A)(3) of this section based on an affidavit by a person	597
familiar with the facts set forth in the affidavit, or, if	598
appropriate, based upon an affidavit on information and belief	599
that an imminent threat to the public health, safety, and welfare	600
exists.	601

(E)(1) A citation issued pursuant to division (A)(4) of this	602
section shall contain all of the following:	603

(a) The date of the citation;

604

(b) The name and title of the individual issuing the	605
citation;	606

(c) The name and address of the respondent, indicating that	607
the respondent is being cited for a violation of this chapter or	608
rules adopted or orders issued under it;	609

(d) A brief description of the conduct or conditions that are	610
considered to be a violation and a reference to the section of the	611
chapter, the rule, or the order the respondent is alleged to have	612
violated;	613

(e) The proposed penalties or actions required for	614
compliance, including the payment of a fine that shall not exceed	615
one hundred dollars for each violation;	616

(f) A space for the respondent to sign as a receipt for the	617
citation;	618

(g) A space for the respondent to indicate that the	619
respondent accepts the citation and agrees to comply or to	620
indicate that the respondent contests the violation contained in	621
the citation;	622

(h) A notice that the respondent must accept or reject the	623
terms of the citation within thirty days after the date of the	624
citation;	625

(i) A brief description of the hearing process under Chapter	626
119. of the Revised Code and the process for settlement through an	627
informal conference as described in section 4785.14 of the Revised	628
Code.	629

(2) The director may send a citation to a respondent by	630
certified mail, return receipt requested, or an employee of the	631
department of commerce may deliver the citation in person.	632

(3) If a respondent accepts the conditions set forth in a	633
citation, the respondent, within thirty days after receiving the	634
citation, shall sign the citation and return it to the director	635
along with any fine or other material required to be submitted by	636
the terms of the citation. The citation and accompanying material	637
shall be placed in the person's records with the director,	638
indicating the nature of the violation and that the person	639
accepted the conditions imposed. A citation issued under this	640
section shall have the same force and effect as a final order	641
issued by the residential builders' and maintenance and alteration	642
contractors' board and may be disclosed to the public. If no	643
further disciplinary actions are placed upon the person's record	644
within five calendar years after the date the citation is issued,	645
the director shall remove the citation and accompanying material	646
from the records. If a respondent so chooses, a one-page	647
explanation prepared by the respondent shall be placed in the	648
director's files and shall be disclosed each time the issuance of	649
the citation is disclosed.	650

(4) If a respondent does not admit to the violation cited,	651
the respondent may state that fact on the citation and return one	652
copy to the director within the thirty days after the date of the	653
citation. Upon receiving a copy of the citation not admitting to	654
the violation, the director shall implement the process described	655
in division (B) of this section, with the citation serving as the	656
formal complaint.	657

(5) The signing of a citation as an indication that the	658
citation was received by the respondent shall be considered to be	659
only a receipt of, not an admission to, the violation cited.	660

Sec. 4785.12. (A) If a licensee or respondent fails to	661
appear or participate in or defend any action, the residential	662
builders' and maintenance and alteration contractors' board shall	663
issue an order granting by default the relief requested, based	664
upon proof submitted to and findings made by a hearing examiner	665
after a hearing conducted under Chapter 119. of the Revised Code.	666

(B) Within sixty days after receipt of a hearing examiner's	667
report, the board shall meet and make a determination of the	668
penalties or disciplinary action to be assessed under section	669
4785.13 of the Revised Code. The board shall make the	670
determination based on the hearing examiner's report. If the board	671
does not determine the appropriate penalty to be assessed or	672
action to be taken within that time period, the director of	673
commerce may determine the appropriate penalty and issue a final	674
order. A member of the board who has participated in an	675
investigation of a complaint filed with the director or who has	676
attended an informal conference under section 4785.14 of the	677
Revised Code shall not participate in making a final determination	678
regarding that complaint.	679

Sec. 4785.13. (A) A licensee or applicant who commits one or	680
more of the following actions may be subject to any of the	681
disciplinary actions set forth in division (B) of this section:	682

(1) Abandonment without legal excuse of a contract,	683
construction project, or operation relating to an activity	684
described in division (B), (C), or (D) of section 4785.01 of the	685
Revised Code that is engaged in or undertaken by the licensee;	686

(2) Diversion of funds or property received for prosecution	687
or completion of a specific construction project or operation, or	688
for a specified purpose in the prosecution or completion of a	689
construction project or operation, and the funds or property are	690
applied or used for another construction project or operation,	691
obligation, or purposes;	692

(3) Failure to account for or remit money coming into the	693
person's possession that belongs to others;	694

(4) A willful departure from or disregard of plans or	695
specifications in a material respect and prejudicial to another,	696
without consent of the owner or an authorized representative and	697
without the consent of the person entitled to have the particular	698
construction project or operation completed in accordance with the	699
plans and specifications;	700

(5) A willful violation of the building laws of this state or	701
of a political subdivision of this state;	702

(6) In a residential maintenance and alteration contract,	703
failure to furnish to a lender the purchaser's signed completion	704
certificate executed upon completion of the work to be performed	705
under the contract;	706

(7) If an individual is a licensed residential builder or	707
licensed residential maintenance and alteration contractor,	708
failure to notify the director of commerce within ten days after a	709
change in the control or direction of the licensee's business	710
resulting from a change in the licensee's partners, directors,	711
officers, or trustees, or a change in the control or direction of	712
the licensee's business resulting from any other occurrence or	713
event;	714

(8) Failure to deliver to the purchaser the entire agreement	715
of the parties, including any finance or other charge arising out	716
of or incidental to the agreement if the agreement involves	717
repair, alteration, or addition to, subtraction from, improvement	718
of, wrecking of, or demolition of a residential building or	719
combination of residential and nonresidential building, or the	720
building of a garage or laying of concrete on residential	721
property;	722

(9) If the licensee is a salesperson, failure to pay over	723
immediately upon receipt money received by the salesperson, in	724
connection with a transaction governed by this chapter to the	725
residential builder or residential maintenance and alteration	726
contractor under whom the salesperson is licensed;	727

(10) Aiding or abetting an unlicensed person to evade this	728
chapter, or knowingly combining or conspiring with, or acting as	729
agent, partner, or associate for an unlicensed person, allowing	730
one's license to be used by an unlicensed person, or acting as or	731
being an ostensible licensed residential builder or licensed	732
residential maintenance and alteration contractor for an	733
undisclosed person who does or has the right to control or direct,	734
or who may have the right to control or direct, directly or	735
indirectly, the operations of a licensee;	736

(11) Accepting a commission, bonus, or other valuable	737
consideration by a salesperson for the sale of goods or the	738
performance of service specified in this chapter from a person	739
other than the residential builder or residential maintenance and	740
alteration contractor under whom the person is licensed;	741

(12) Becoming insolvent, filing a bankruptcy action, becoming	742
subject to a receivership, assigning for the benefit of creditors,	743
failing to satisfy judgments or liens, or failing to pay an	744
obligation as it becomes due in the ordinary course of business;	745

(13) Performing work that does not meet the standards of the	746
applicable residential code;	747

(14) Practicing fraud or deceit in obtaining a license;

748

(15) Practicing fraud, deceit, or dishonesty as a residential	749
builder, residential maintenance and alteration contractor, or	750
salesperson;	751

(16) Violating a rule of conduct of a residential builder,	752
residential maintenance and alteration contractor, or salesperson;	753

(17) Demonstrating a lack of good moral character;

754

(18) Committing an act of gross negligence in practicing as a	755
residential builder, residential maintenance and alteration	756
contractor, or salesperson;	757

(19) Practicing false advertising;

758

(20) Committing an act that demonstrates incompetence;

759

(21) Violating any other provision of this chapter or a rule	760
adopted under this chapter for which a penalty is not otherwise	761
prescribed;	762

(22) Failing to comply with a subpoena issued under this	763
chapter;	764

(23) Failing to respond to a citation as required by section	765
4785.11 of the Revised Code;	766

(24) Violating or failing to comply with a final order issued	767
by the director, including a stipulation, settlement agreement, or	768
a citation.	769

(B) The residential builders' and maintenance and alteration	770
contractors' board may do any of the following with respect to a	771
person who commits an act described in division (A) of this	772
section:	773

(1) Place a limitation on a license;

774

(2) Suspend a license;

775

(3) Deny issuance or renewal of a license;

776

(4) Revoke a license;

777

(5) Assess a fine against a licensee, not to exceed ten	778
thousand dollars per violation;	779

(6) Censure;

780

(7) Place a licensee on probation;

781

(8) Require that restitution be made, based upon proof	782
submitted to and findings made by the hearing examiner after a	783
hearing.	784

(C) If restitution is required to be made under division	785
(B)(8) of this section, the board may suspend the license of the	786
person required to make the restitution until the restitution is	787
made.	788

(D) A suspension, revocation, or denial of a license of a	789
person shall suspend, revoke, or deny any other license held or	790
applied for by that person issued under this chapter. A	791
suspension, revocation, or denial of a license held by a	792
qualifying officer of a corporation, partnership, association,	793
limited liability company, or other entity by the board shall	794
suspend, revoke, or deny any other license held or applied for	795
under this chapter by that qualifying officer.	796

Sec. 4785.14. (A) A residential builder or residential	797
maintenance and alteration contractor licensed under this chapter	798
may contractually provide for an alternative dispute resolution	799
procedure to resolve complaints filed with the director of	800
commerce. The procedure shall be conducted by a neutral third	801
party for determining the rights and responsibilities of the	802
parties and shall be initiated by the licensee, who shall provide	803
notice of the initiation of the procedure to the complainant by	804
certified mail not less than thirty days before the commencement	805
of that procedure. The procedure shall be conducted at a location	806
mutually agreed to by the parties.	807

(B) Failure of the person bringing a complaint against a	808
licensee to utilize a contractually provided alternative dispute	809
resolution procedure shall be an affirmative defense to an action	810
brought in a court of this state against a licensee under this	811
chapter.	812

The director may initiate a proceeding against a licensee	813
under section 4785.11 of the Revised Code if the licensee has	814
contractually provided for an alternative dispute resolution	815
procedure that has not been utilized and completed, only if any of	816
the following apply:	817

(1) The licensee has not complied with a decision or order	818
issued as a result of that alternative dispute resolution	819
procedure.	820

(2) That alternative dispute resolution procedure was not	821
fully completed within ninety days after the filing of the	822
complaint with the director.	823

(3) An alternative dispute resolution procedure meeting the	824
requirements of division (A) of this section is not available to	825
the complainant.	826

(C) At any time during an investigation under section 4785.10	827
of the Revised Code or after the issuance of a formal complaint,	828
the director may bring together the parties to a complaint for an	829
informal conference. At the informal conference, the director	830
shall attempt to resolve issues raised in the complaint and may	831
attempt to aid the parties in reaching a formal settlement or	832
stipulation.	833

A member of the residential builders' and maintenance and	834
alteration contractors' board, at the discretion of the board, may	835
attend an informal conference. An informal conference may result	836
in a settlement, consent order, waiver, default, or other method	837
of settlement agreed upon by the parties and the director. A	838
settlement may include the denial, revocation, suspension, or	839
limitation of a license; fine; censure; probation; or restitution.	840
The board may reject a settlement and require a hearing under	841
Chapter 119. of the Revised Code.	842

If an informal conference is not held or does not result in a	843
settlement of a complaint, a hearing pursuant to Chapter 119. of	844
the Revised Code shall be held. A member of the board may attend a	845
hearing.	846

Sec. 4785.15. (A) A residential builder or residential	847
maintenance and alteration contractor shall not bring or maintain	848
an action in a court of this state for the collection of	849
compensation for the performance of an act or contract for which a	850
license is required under this chapter without proving that the	851
residential builder or residential maintenance and alteration	852
contractor was licensed under this chapter during the performance	853
of the act or contract.	854

(B) A residential builder or residential maintenance and	855
alteration contractor shall not impose or take any legal or other	856
action to impose a lien on real property unless that builder or	857
contractor was licensed under this chapter during the performance	858
of the act or contract.	859

(C) Divisions (A) and (B) of this section apply only to	860
contracts entered into on or after the effective date of division	861
(A) of section 4785.02 of the Revised Code.	862

Sec. 4785.16. (A) A prosecuting attorney or the attorney	863
general may bring an action for a civil violation in a court of	864
competent jurisdiction against a person not licensed under this	865
chapter who has violated division (A) of section 4785.02 of the	866
Revised Code. The court shall assess a civil fine of not less than	867
five thousand dollars and not more than twenty-five thousand	868
dollars and any additional civil damages or restitution the court	869
considers appropriate.	870

(B) If the attorney general considers it necessary, the	871
attorney general shall intervene in and prosecute all cases	872
arising under this chapter. Nothing in this division prohibits the	873
director of commerce from bringing any civil, criminal, or	874
administrative action for the enforcement of division (A) section	875
4785.02 of the Revised Code. The director has standing to bring an	876
administrative action or to directly bring an action in a court of	877
competent jurisdiction regarding unlicensed practice of an	878
occupation.	879

(C) The attorney general or the appropriate prosecuting	880
attorney may utilize the forfeiture provisions of Chapter 2981. of	881
the Revised Code for items seized and determined to be proceeds of	882
a crime, substituted proceeds of a crime, or the instrumentality	883
of a crime.	884

Sec. 4785.17. The director of commerce shall post on the web	885
site maintained by the department of commerce any final order of	886
the residential builders' and maintenance and alteration	887
contractors' board and the date the order was issued. The director	888
shall post the order within thirty days after the order is issued.	889

The director annually shall post on the web site the number	890
of final orders of the board.	891

Sec. 4785.20. (A) The director of commerce shall charge the	892
following fees with respect to administering this chapter:	893

(1) An application processing fee of fifteen dollars;

894

(2) A fee of fifty dollars to take the complete examination	895
for a license or renewal of a license as a residential builder or	896
residential maintenance and alteration contractor;	897

(3) A fee of thirty dollars to take the law and rules portion	898
of the examination for a license or renewal of a license as a	899
residential builder or residential maintenance and alteration	900
contractor;	901

(4) A fee of thirty dollars to take the practice or trades	902
portion of the examination for a license or renewal of a license	903
as a residential builder or residential maintenance and alteration	904
contractor;	905

(5) A fee of thirty dollars to take the salesperson	906
examination;	907

(6) An examination review fee of twenty dollars;

908

(7) A license and renewal fee of fifty dollars;

909

(8) A late renewal fee of twenty dollars;

910

(9) A duplicate license fee of ten dollars;

911

(10) A change of name, address, or employer fee of ten	912
dollars if the change results in the issuance of a new document.	913

(B) There is hereby created in the state treasury the builder	914
enforcement fund. The director shall deposit any fees and fines	915
the director receives under this chapter into the fund. The	916
director shall use the fund to enforce this chapter and to	917
reimburse the attorney general for the reasonable cost of services	918
provided to the director and for expenses incurred in prosecutions	919
for unlicensed practice or a prosecuting attorney for expenses	920
incurred in conducting prosecutions of unlicensed practice.	921

Sec. 4785.99. Whoever violates division (A) of section	922
4785.02 of the Revised Code is guilty of a misdemeanor, punishable	923
by a fine of not less than five thousand dollars or more than	924
twenty-five thousand dollars, imprisonment for not more than one	925
year, or both. If the offender has been previously convicted of a	926
violation of that division, the person is guilty of a misdemeanor	927
punishable by a fine of not less than five thousand dollars or	928
more than twenty-five thousand dollars, imprisonment for not more	929
than two years, or both. In the case of an offense that causes	930
death or serious injury, the person is guilty of a felony	931
punishable by a fine of not less than five thousand dollars or	932
more than twenty-five thousand dollars, imprisonment for not more	933
than four years, or both.	934

Section 2. That existing sections 4722.02 and 4745.01 of the	935
Revised Code are hereby repealed.	936

Section 3. Division (A) of section 4785.02 of the Revised	937
Code, as enacted by this act, shall take effect one hundred eighty	938
days after the effective date of this act.	939

Section 4. (A) Notwithstanding section 4785.03 of the Revised	940
Code, as enacted by this act, the Governor may appoint, as the	941
initial members of the Residential Builders' and Maintenance and	942
Alteration Contractors' Board who are required to be licensed	943
under that section, an individual who satisfies either of the	944
following qualifications:	945

(1) The individual is certified or otherwise approved by a	946
national organization that certifies or otherwise approves	947
individuals in the occupation to be licensed by the Board.	948

(2) The individual has actively engaged in the business of a	949
residential builder or residential maintenance and alteration	950
contractor, taught in an educational institution that prepares	951
applicants for licensure as a residential builder or residential	952
maintenance and alteration contractor, or both, for not less than	953
two years immediately preceding the date of the individual's	954
appointment.	955

(B) Within three years after the effective date of this act,	956
each individual appointed under division (A) of this section shall	957
be licensed as required under section 4785.02 of the Revised Code,	958
as enacted by this act.	959