H. B. No. 140 As Introduced

As Introduced

130th General Assembly

Regular Session

2013-2014

H. B. No. 140

Representative Patmon

Cosponsors: Representatives Strahorn, Stebelton

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 designated under section 4785.07 of the Revised	138
Code, of a residential builder or residential maintenance and	139
alteration contractor licensed under this chapter, who for a	140
salary, wage, fee, percentage, commission, or other consideration,	141
sells or attempts to sell, negotiates or attempts to negotiate,	142
solicits for or attempts to solicit for, obtains or attempts to	143
obtain a contract or commitment for, or furnishes or attempts or	144
agrees to furnish, the goods and services of a residential builder	145
or residential maintenance and alteration 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 of a license has satisfied the requirements for the	281
license or renewal;	282

(6) Develop with the director the examinations required under	283
sections 4785.05 and 4785.09 of the Revised Code.	284

(B) The examinations developed by the board and the director	285
pursuant to division (A)(6) of this section shall test an	286
applicant's or licensee's knowledge of the obligations of a	287
residential builder or residential maintenance and alteration	288
contractor to the public and to the applicant's or licensee's	289
principal, and the applicant's or licensee's knowledge of the laws	290
relating to the license for which the applicant applied or that	291
the licensee holds.	292

The board and the director, in developing the examination	293
under that division, may adopt an examination or test prepared by	294
another agency if the board and the director determine that the	295
examination or test serves as a basis for determining whether a	296
person has the knowledge and skills to perform as a residential	297
builder, residential maintenance and alteration contractor, or	298
salesperson. Notwithstanding section 121.22 of the Revised Code,	299
the material required by the board and the director to develop an	300
examination may be considered by the board in an executive	301
session, if the board satisfies the requirements of division (G)	302
of that section. The board and the director, in determining the	303
form of the recommended examination, shall give special emphasis	304
to an alternative form of testing that permits a person to	305
demonstrate a special qualification the person may have that is	306
not evident under a written examination, but is related to being a	307
residential builder, residential maintenance and alteration	308
contractor, or salesperson. The alternative form of testing shall	309
be structured to give weight to a person's experience,	310
noninstitutional training, and innate skills and shall be flexible	311
enough to enable a person with a mental or physical disability to	312
demonstrate that the person has the requisite knowledge and	313
skills.	314

(C)(1) A member of the board, at the discretion of the board,	315
may attend an informal conference conducted under section 4785.14	316
of the Revised Code.	317

(2) The board may adopt rules to establish the minimum	318
standards of acceptable practice as a residential builder,	319
residential maintenance and alteration contractor, or salesperson.	320

Sec. 4785.05. (A) The director of commerce shall issue a	321
license to an applicant for a residential builder license,	322
residential maintenance and alteration contractor license, or a	323
salesperson license if the applicant does all of the following:	324

(1) Satisfactorily demonstrates to the director that the	325
applicant is of good moral character and is financially stable;	326

(2) Submits a copy of a driver's license, commercial driver's	327
license, or state identification card issued pursuant to Chapter	328
4506. or 4507. of the Revised Code or the equivalent law of	329
another state, to demonstrate proof of identity;	330

(3) Passes the examination described in divisions (A)(6) and	331
(B) of section 4785.04 of the Revised Code;	332

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

333

(5) Pays the fees required under section 4785.20 of the	334
Revised Code.	335

(B) An applicant for a salesperson license is not required to	336
satisfy the requirement described in division (A)(4) of this	337
section to receive a salesperson license.	338

(C) Notwithstanding division (A) of this section, a person or	339
qualifying officer for a corporation or member of a partnership or	340
other business association who holds a residential builder or	341
residential maintenance and alteration contractor license is not	342
required to retake an examination for that license when applying	343
for an additional license. However, a residential maintenance and	344
alteration contractor who holds a license and applies for a	345
license as a residential builder is required to take an	346
examination for the residential builder license.	347

(D) A residential builder or residential maintenance and	348
alteration contractor shall submit the application for a	349
salesperson license on behalf of an employee of the builder or	350
contractor who wishes to be licensed as a salesperson.	351

(E) If a residential builder or residential maintenance and	352
alteration contractor has more than one place of business in this	353
state, the director shall issue a branch license to the	354
residential builder or residential maintenance and alteration	355
contractor for each place of business maintained. A residential	356
builder or residential maintenance and alteration contractor shall	357
submit an application to the director for each branch office.	358

(F) A residential builder or residential maintenance and	359
alteration contractor licensed under this chapter shall report to	360
the director a change of name or address or a change of members or	361
addresses of the partnership, association, or corporation holding	362
a license under this chapter within thirty days after the change	363
occurs.	364

Sec. 4785.06. (A)(1) A person issued a license as a	365
residential maintenance and alteration contractor under section	366
4785.05 of the Revised Code is authorized to engage in the	367
following crafts or trades:	368

(a) Carpentry;

369

(b) Concrete;

370

371

(d) Waterproofing a basement;

372

(e) Excavation;

373

(f) Insulation work;

374

(g) Masonry work;

375

(h) Painting and decorating;

376

(i) Roofing;

377

(j) Siding and gutters;

378

(k) Screen or storm sash installation;

379

(l) Tile and marble work;

380

(m) House wrecking.

381

(2) The director of commerce shall specify on the license the	382
particular craft or trade for which the licensee is qualified to	383
perform. Nothing in this section prohibits a residential	384
maintenance and alteration contractor from taking and executing a	385
contract involving the use of two or more crafts or trades if the	386
performance of the work in the craft or trade other than the craft	387
or trade for which the contractor is licensed is incidental and	388
supplemental to the performance of work in the craft or trade for	389
which the contractor is licensed.	390

(B) A salesperson shall be licensed in the employ of only one	391
residential builder or residential maintenance and alteration	392
contractor. If a licensed salesperson wishes to change employment	393
from one residential builder or residential maintenance and	394
alteration contractor to another, the salesperson shall forward	395
the license to the director of commerce and the new residential	396
builder or residential maintenance and alteration contractor shall	397
apply for a transfer and the issuance of a new license under the	398
salesperson's new employer.	399

Sec. 4785.07. If a corporation, partnership, association,	400
limited liability company, or other entity applies for a license	401
under section 4785.05 of the Revised Code, the applicant shall	402
designate one of its officers, partners, members, or managing	403
agents as a qualifying officer who, upon taking and passing the	404
examination, and satisfying all other requirements of this	405
chapter, shall receive a license to act for the entity. The	406
qualifying officer also shall obtain and maintain a license under	407
this chapter as an individual. The qualifying officer is	408
responsible for exercising the supervision or control of the	409
building or construction operations necessary to secure full	410
compliance with this chapter and the rules adopted under it. The	411
director of commerce shall not issue a license to a corporation,	412
partnership, association, limited liability company, or other	413
entity unless each partner, trustee, director, officer, or member	414
or a person exercising control of the entity is at least eighteen	415
years of age and satisfies the requirements for a license under	416
section 4785.05 of the Revised Code other than those requirements	417
relating to knowledge and experience. If an individual licensee is	418
also a qualifying officer, the director shall list the	419
individual's name and license number on any license issued to the	420
individual as a qualifying officer. In the case of a license	421
issued under this section, each officer, partner, member, or	422
managing agent, regardless of whether the person is the qualifying	423
officer, shall provide a copy of the person's driver's license,	424
commercial driver's license, or state identification card issued	425
pursuant to Chapter 4506. or 4507. of the Revised Code or the	426
equivalent law of another state for use by the director only for	427
identification purposes.	428

The license issued to a corporation, partnership,	429
association, limited liability company, or other entity is	430
suspended when a license or license application of a qualifying	431
officer, partner, trustee, director, officer, member, or a person	432
exercising control of the entity is suspended, revoked, or denied.	433
The suspension remains in effect until the residential builders'	434
and maintenance and alteration contractors' board determines that	435
the disability created by the suspension, revocation, or denial	436
has been removed.	437

If a qualifying officer of a licensee ceases to be the	438
licensee's qualifying officer, the licensee's license is	439
suspended. However, upon request, the director may permit the	440
license to remain in force for a reasonable time to permit the	441
qualification of a new qualifying officer.	442

Sec. 4785.08. Notwithstanding division (A)(4) of section	443
4785.05 of the Revised Code, the director of commerce may issue a	444
license under that section to an applicant who does not have a	445
principal place of business in this state if the applicant	446
otherwise complies with this chapter. The director shall not issue	447
a license to a foreign corporation as defined in section 1701.01	448
of the Revised Code unless the corporation is authorized to do	449
business in this state by the secretary of state. The applicant	450
shall file an irrevocable consent to service of process. The	451
consent shall be signed by the applicant or by an authorized	452
officer, member, or partner of the applicant and shall be	453
notarized. If the applicant is a corporation, the consent shall be	454
accompanied by a certified copy of the resolution of the	455
corporation authorizing the consent. A process or pleading served	456
upon the director shall be sufficient service upon the licensee. A	457
process or pleading served upon the director under this section	458
shall be in duplicate. The director immediately shall forward by	459
registered mail one copy of the process or pleading to the main	460
office of the licensee served.	461

Sec. 4785.09. A license issued under section 4785.05 or	462
4785.08 of the Revised Code is valid for a period of three years	463
after the date the license is issued. The license shall be renewed	464
in accordance with the standard renewal procedure under Chapter	465
4745. of the Revised Code, except that, notwithstanding section	466
4745.02 of the Revised Code, the director of commerce shall cause	467
to be mailed the notice and renewal application for a residential	468
builder or residential maintenance and alteration contractor	469
license on or before the sixtieth day prior to the expiration of	470
the license. The director shall renew a salesperson license if the	471
licensee so requests and pays the fee listed in section 4785.20 of	472
the Revised Code. To renew a residential builder license or	473
residential maintenance and alteration contractor license, a	474
licensee shall do all of the following:	475

(A) State in the renewal application that the licensee has a	476
current copy of the residential building code in effect in the	477
area where the licensee performs work;	478

(B) Pass the examination described in divisions (A)(6) and	479
(B) of section 4785.04 of the Revised Code;	480

(C) Pay the fees listed in section 4785.20 of the Revised	481
Code for the examination and renewal.	482

For purposes of section 4745.02 of the Revised Code, the	483
director shall not accept a renewal application for a residential	484
builder or residential alteration and maintenance contractor	485
license until the licensee passes the required examination.	486

Sec. 4785.10. (A) Any person may file a complaint with the	487
director of commerce that alleges that a person has violated this	488
chapter or a rule adopted or order issued under it. A complaint	489
shall be filed not later than eighteen months after the latest of	490
the following events regarding a residential building or a	491
combination of residential and nonresidential building:	492

(1) In the case of a residential maintenance and alteration	493
contract, completion of the contract or occupancy or purchase of	494
the building;	495

(2) In the case of a project involving construction of a new	496
residential building or requiring an occupancy permit, issuance of	497
the certificate of occupancy or temporary certificate of occupancy	498
or closing.	499

(B) A person shall describe in writing in the complaint	500
submitted to the director the factual basis for the allegation.	501
The person shall send a copy of the initial complaint to the	502
licensee identified in the complaint concurrent with the	503
submission of the complaint to the director.	504

(C) If the complaint is filed by an owner of a building, the	505
director shall proceed with an investigation only if the owner	506
demonstrates that the owner provided notice to the licensee	507
describing reasonable times and dates that the building was	508
accessible for any needed repairs and submits proof acceptable to	509
the director that the repairs were not made within sixty days	510
after the date the notice was sent. The director may waive the	511
requirements of this division if the director determines that a	512
waiver is necessary to safeguard the building or to protect an	513
occupant's health and safety. If the director waives the	514
requirements, the director may utilize any remedy available under	515
division (A) of section 4785.11 of the Revised Code.	516

(D) The director, upon receipt of a complaint, immediately	517
shall begin an investigation of the allegations of the complaint	518
and shall open a correspondence file. The director shall make a	519
written acknowledgment of the complaint within fifteen days after	520
receipt of the complaint to the person making the complaint. If	521
the complaint is made by the director, the director shall	522
designate one or more employees of the director to act as the	523
person making the complaint. The director shall conduct the	524
investigation.	525

(E) The director shall request the appropriate building	526
official to inspect the property that is the subject of the	527
complaint. Upon receipt of a building inspection report issued to	528
the director by a state or local building enforcement official	529
that verifies or confirms the substance of a complaint, the	530
director shall send by certified mail a copy of the verified	531
complaint to the licensee. If the director does not send a copy of	532
the verified complaint within thirty days after receipt of the	533
building inspection report, the residential builders' and	534
maintenance and alteration contractors' board shall not assess a	535
fine against the licensee under section 4785.13 of the Revised	536
Code, but the director may pursue restitution, license suspension,	537
or other remedies provided under that section.	538

(F) If the owner and a licensed residential builder or	539
residential maintenance and alteration contractor have agreed	540
contractually on mutually acceptable performance guidelines	541
relating to workmanship, the director shall consider those	542
guidelines in the director's evaluation of the complaint. The	543
guidelines shall be consistent with the residential building code	544
adopted pursuant to Chapter 3781. of the Revised Code.	545

(G) In furtherance of an investigation, the director may	546
request that the attorney general petition a court of competent	547
jurisdiction to issue a subpoena requiring a person to appear	548
before the director and be examined with reference to a matter	549
within the scope of the investigation and to produce books,	550
papers, or documents pertaining to the investigation.	551

Sec. 4785.11. (A) The director of commerce shall conclude an	552
investigation conducted under section 4785.10 of the Revised Code	553
within thirty days after the complaint is filed. The director may	554
take additional time if the director gives the parties to the	555
complaint written notice of the extension before the initial	556
thirty-day period expires.	557

If the investigation does not disclose a violation of this	558
chapter or a rule adopted or an order issued under it, the	559
director shall close the complaint. The director shall forward the	560
reasons for closing the complaint to the parties, who then may	561
provide additional information to reopen the complaint.	562

If the investigation discloses evidence of a violation, the	563
director shall prepare the appropriate action against the person,	564
which may be any of the following:	565

(1) A formal complaint;

566

(2) A cease and desist order;

567

(3) Summary suspension;

568

(4) A citation.

569

(B)(1) If the director issues a formal complaint under	570
division (A)(1) of this section, the director shall serve the	571
formal complaint upon the parties to the complaint. At the same	572
time, the director shall serve the respondent with a notice that	573
includes both of the following:	574

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

575

(i) An opportunity to meet with the director to negotiate a	576
settlement of the matter;	577

(ii) An opportunity for a hearing under Chapter 119. of the	578
Revised Code.	579

(b) A description of the process for an informal conference	580
under section 4785.14 of the Revised Code and for a hearing under	581
Chapter 119. of the Revised Code.	582

(2) The respondent, within fifteen days after the receipt of	583
notice described in division (B)(1) of this section, shall select	584
one of the options described in that division. If a respondent	585
does not select one of those options within that time period, then	586
the director shall proceed with a hearing held under Chapter 119.	587
of the Revised Code.	588

(C) If a cease and desist order has been issued under	589
division (A)(2) of this section, the person ordered to cease and	590
desist may request a hearing in accordance with Chapter 119. of	591
the Revised Code. Upon a violation of a cease and desist order,	592
the attorney general may apply in a court with appropriate	593
jurisdiction to restrain and enjoin, temporarily or permanently,	594
or both, the person from further violating the cease and desist	595
order.	596

(D) The director may issue a summary suspension under	597
division (A)(3) of this section based on an affidavit by a person	598
familiar with the facts set forth in the affidavit, or, if	599
appropriate, based upon an affidavit on information and belief	600
that an imminent threat to the public health, safety, and welfare	601
exists.	602

(E)(1) A citation issued pursuant to division (A)(4) of this	603
section shall contain all of the following:	604

(a) The date of the citation;

605

(b) The name and title of the individual issuing the	606
citation;	607

(c) The name and address of the respondent, indicating that	608
the respondent is being cited for a violation of this chapter or	609
rules adopted or orders issued under it;	610

(d) A brief description of the conduct or conditions that are	611
considered to be a violation and a reference to the section of the	612
chapter, the rule, or the order the respondent is alleged to have	613
violated;	614

(e) The proposed penalties or actions required for	615
compliance, including the payment of a fine that shall not exceed	616
one hundred dollars for each violation;	617

(f) A space for the respondent to sign as a receipt for the	618
citation;	619

(g) A space for the respondent to indicate that the	620
respondent accepts the citation and agrees to comply or to	621
indicate that the respondent contests the violation contained in	622
the citation;	623

(h) A notice that the respondent must accept or reject the	624
terms of the citation within thirty days after the date of receipt	625
of the citation;	626

(i) A brief description of the hearing process under Chapter	627
119. of the Revised Code and the process for settlement through an	628
informal conference as described in section 4785.14 of the Revised	629
Code.	630

(2) The director may send a citation to a respondent by	631
certified mail, return receipt requested, or an employee of the	632
department of commerce may deliver the citation in person.	633

(3) If a respondent accepts the conditions set forth in a	634
citation, the respondent, within thirty days after receiving the	635
citation, shall sign the citation and return it to the director	636
along with any fine or other material required to be submitted by	637
the terms of the citation. The citation and accompanying material	638
shall be placed in the person's records with the director,	639
indicating the nature of the violation and that the person	640
accepted the conditions imposed. A citation issued under this	641
section shall have the same force and effect as a final order	642
issued by the residential builders' and maintenance and alteration	643
contractors' board and may be disclosed to the public. If no	644
further disciplinary actions are placed upon the person's record	645
within five calendar years after the date the citation is issued,	646
the director shall remove the citation and accompanying material	647
from the records. If a respondent so chooses, a one-page	648
explanation prepared by the respondent shall be placed in the	649
director's files and shall be disclosed each time the issuance of	650
the citation is disclosed.	651

(4) If a respondent does not admit to the violation cited,	652
the respondent may state that fact on the citation and return one	653
copy to the director within the thirty days after the date of	654
receipt of the citation. Upon receiving a copy of the citation not	655
admitting to the violation, the director shall implement the	656
process described in division (B) of this section, with the	657
citation serving as the formal complaint.	658

(5) The signing of a citation as an indication that the	659
citation was received by the respondent shall be considered to be	660
only a receipt of, not an admission to, the violation cited.	661

Sec. 4785.12. (A) If a licensee or respondent fails to	662
appear or participate in or defend any action, the residential	663
builders' and maintenance and alteration contractors' board shall	664
issue an order granting by default the relief requested, based	665
upon proof submitted to and findings made by a hearing examiner	666
after a hearing conducted under Chapter 119. of the Revised Code.	667

(B) Within sixty days after receipt of a hearing examiner's	668
report, the board shall meet and make a determination of the	669
penalties or disciplinary action to be assessed under section	670
4785.13 of the Revised Code. The board shall make the	671
determination based on the hearing examiner's report. If the board	672
does not determine the appropriate penalty to be assessed or	673
action to be taken within that time period, the director of	674
commerce may determine the appropriate penalty and issue a final	675
order. A member of the board who has participated in an	676
investigation of a complaint filed with the director or who has	677
attended an informal conference under section 4785.14 of the	678
Revised Code shall not participate in making a final determination	679
regarding that complaint.	680

Sec. 4785.13. (A) A licensee or applicant who commits one or	681
more of the following actions may be subject to any of the	682
disciplinary actions set forth in division (B) of this section:	683

(1) Abandonment without legal excuse of a contract,	684
construction project, or operation relating to an activity	685
described in division (B), (C), or (D) of section 4785.01 of the	686
Revised Code that is engaged in or undertaken by the licensee;	687

(2) Diversion of funds or property received for prosecution	688
or completion of a specific construction project or operation, or	689
for a specified purpose in the prosecution or completion of a	690
construction project or operation, and the funds or property are	691
applied or used for another construction project or operation,	692
obligation, or purposes;	693

(3) Failure to account for or remit money coming into the	694
person's possession that belongs to others;	695

(4) A willful departure from or disregard of plans or	696
specifications in a material respect and prejudicial to another,	697
without consent of the owner or an authorized representative and	698
without the consent of the person entitled to have the particular	699
construction project or operation completed in accordance with the	700
plans and specifications;	701

(5) A willful violation of the building laws of this state or	702
of a political subdivision of this state;	703

(6) In a residential maintenance and alteration contract,	704
failure to furnish to a lender the purchaser's signed completion	705
certificate executed upon completion of the work to be performed	706
under the contract;	707

(7) If an individual is a licensed residential builder or	708
licensed residential maintenance and alteration contractor,	709
failure to notify the director of commerce within ten days after a	710
change in the control or direction of the licensee's business	711
resulting from a change in the licensee's partners, directors,	712
officers, or trustees, or a change in the control or direction of	713
the licensee's business resulting from any other occurrence or	714
event;	715

(8) Failure to deliver to the purchaser the entire agreement	716
of the parties, including any finance or other charge arising out	717
of or incidental to the agreement if the agreement involves	718
repair, alteration, or addition to, subtraction from, improvement	719
of, wrecking of, or demolition of a residential building or	720
combination of residential and nonresidential building, or the	721
building of a garage or laying of concrete on residential	722
property;	723

(9) If the licensee is a salesperson, failure to pay over	724
immediately upon receipt money received by the salesperson, in	725
connection with a transaction governed by this chapter to the	726
residential builder or residential maintenance and alteration	727
contractor under whom the salesperson is licensed;	728

(10) Aiding or abetting an unlicensed person to evade this	729
chapter, or knowingly combining or conspiring with, or acting as	730
agent, partner, or associate for an unlicensed person, allowing	731
one's license to be used by an unlicensed person, or acting as or	732
being an ostensible licensed residential builder or licensed	733
residential maintenance and alteration contractor for an	734
undisclosed person who does or has the right to control or direct,	735
or who may have the right to control or direct, directly or	736
indirectly, the operations of a licensee;	737

(11) Accepting a commission, bonus, or other valuable	738
consideration by a salesperson for the sale of goods or the	739
performance of service specified in this chapter from a person	740
other than the residential builder or residential maintenance and	741
alteration contractor under whom the person is licensed;	742

(12) Becoming insolvent, filing a bankruptcy action, becoming	743
subject to a receivership, assigning for the benefit of creditors,	744
failing to satisfy judgments or liens, or failing to pay an	745
obligation as it becomes due in the ordinary course of business;	746

(13) Performing work that does not meet the standards of the	747
applicable residential code;	748

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

749

(15) Practicing fraud, deceit, or dishonesty as a residential	750
builder, residential maintenance and alteration contractor, or	751
salesperson;	752

(16) Violating a rule of conduct of a residential builder,	753
residential maintenance and alteration contractor, or salesperson;	754

(17) Demonstrating a lack of good moral character;

755

(18) Committing an act of gross negligence in practicing as a	756
residential builder, residential maintenance and alteration	757
contractor, or salesperson;	758

(19) Practicing false advertising;

759

(20) Committing an act that demonstrates incompetence;

760

(21) Violating any other provision of this chapter or a rule	761
adopted under this chapter for which a penalty is not otherwise	762
prescribed;	763

(22) Failing to comply with a subpoena issued under this	764
chapter;	765

(23) Failing to respond to a citation as required by section	766
4785.11 of the Revised Code;	767

(24) Violating or failing to comply with a final order issued	768
by the director, including a stipulation, settlement agreement, or	769
a citation.	770

(B) The residential builders' and maintenance and alteration	771
contractors' board, or the director as described in division (B)	772
of section 4785.12 of the Revised Code, may do any of the	773
following with respect to a person who commits an act described in	774
division (A) of this section:	775

(1) Place a limitation on a license;

776

(2) Suspend a license;

777

(3) Deny issuance or renewal of a license;

778

(4) Revoke a license;

779

(5) Assess a fine against a licensee, not to exceed ten	780
thousand dollars per violation;	781

(6) Censure;

782

(7) Place a licensee on probation;

783

(8) Require that restitution be made, based upon proof	784
submitted to and findings made by the hearing examiner after a	785
hearing.	786

(C) If restitution is required to be made under division	787
(B)(8) of this section, the board or director may suspend the	788
license of the person required to make the restitution until the	789
restitution is made.	790

(D) A suspension, revocation, or denial of a license of a	791
person shall suspend, revoke, or deny any other license held or	792
applied for by that person issued under this chapter. A	793
suspension, revocation, or denial of a license held by a	794
qualifying officer of a corporation, partnership, association,	795
limited liability company, or other entity by the board or	796
director shall suspend, revoke, or deny any other license held or	797
applied for under this chapter by that qualifying officer.	798

Sec. 4785.14. (A) A residential builder or residential	799
maintenance and alteration contractor licensed under this chapter	800
may contractually provide for an alternative dispute resolution	801
procedure to resolve complaints filed with the director of	802
commerce. The procedure shall be conducted by a neutral third	803
party for determining the rights and responsibilities of the	804
parties and shall be initiated by the licensee, who shall provide	805
notice of the initiation of the procedure to the complainant by	806
certified mail not less than thirty days before the commencement	807
of that procedure. The procedure shall be conducted at a location	808
mutually agreed to by the parties.	809

(B) Failure of the person bringing a complaint against a	810
licensee to utilize a contractually provided alternative dispute	811
resolution procedure shall be an affirmative defense to an action	812
brought in a court of this state against a licensee under this	813
chapter.	814

The director may initiate a proceeding against a licensee	815
under section 4785.11 of the Revised Code if the licensee has	816
contractually provided for an alternative dispute resolution	817
procedure that has not been utilized and completed, only if any of	818
the following apply:	819

(1) The licensee has not complied with a decision or order	820
issued as a result of that alternative dispute resolution	821
procedure.	822

(2) That alternative dispute resolution procedure was not	823
fully completed within ninety days after the filing of the	824
complaint with the director.	825

(3) An alternative dispute resolution procedure meeting the	826
requirements of division (A) of this section is not available to	827
the complainant.	828

(C) At any time during an investigation under section 4785.10	829
of the Revised Code or after the issuance of a formal complaint,	830
the director may bring together the parties to a complaint for an	831
informal conference. At the informal conference, the director	832
shall attempt to resolve issues raised in the complaint and may	833
attempt to aid the parties in reaching a formal settlement or	834
stipulation.	835

A member of the residential builders' and maintenance and	836
alteration contractors' board, at the discretion of the board, may	837
attend an informal conference. An informal conference may result	838
in a settlement, consent order, waiver, default, or other method	839
of settlement agreed upon by the parties and the director. A	840
settlement may include the denial, revocation, suspension, or	841
limitation of a license; fine; censure; probation; or restitution.	842
The board may reject a settlement and require a hearing under	843
Chapter 119. of the Revised Code.	844

If an informal conference is not held or does not result in a	845
settlement of a complaint, a hearing pursuant to Chapter 119. of	846
the Revised Code shall be held. A member of the board may attend a	847
hearing.	848

Sec. 4785.15. (A) A residential builder or residential	849
maintenance and alteration contractor shall not bring or maintain	850
an action in a court of this state for the collection of	851
compensation for the performance of an act or contract for which a	852
license is required under this chapter without proving that the	853
residential builder or residential maintenance and alteration	854
contractor was licensed under this chapter during the performance	855
of the act or contract.	856

(B) A residential builder or residential maintenance and	857
alteration contractor shall not impose or take any legal or other	858
action to impose a lien on real property unless that builder or	859
contractor was licensed under this chapter during the performance	860
of the act or contract.	861

(C) Divisions (A) and (B) of this section apply only to	862
contracts entered into on or after the effective date of division	863
(A) of section 4785.02 of the Revised Code.	864

Sec. 4785.16. (A) A prosecuting attorney or the attorney	865
general may bring an action for a civil violation in a court of	866
competent jurisdiction against a person not licensed under this	867
chapter who has violated division (A) of section 4785.02 of the	868
Revised Code. The court shall assess a civil fine of not less than	869
five thousand dollars and not more than twenty-five thousand	870
dollars and any additional civil damages or restitution the court	871
considers appropriate.	872

(B) If the attorney general considers it necessary, the	873
attorney general shall intervene in and prosecute all cases	874
arising under this chapter. Nothing in this division prohibits the	875
director of commerce from bringing any civil, criminal, or	876
administrative action for the enforcement of division (A) section	877
4785.02 of the Revised Code. The director has standing to bring an	878
administrative action or to directly bring an action in a court of	879
competent jurisdiction regarding unlicensed practice of an	880
occupation.	881

(C) The attorney general or the appropriate prosecuting	882
attorney may utilize the forfeiture provisions of Chapter 2981. of	883
the Revised Code for items seized and determined to be proceeds of	884
a crime, substituted proceeds of a crime, or the instrumentality	885
of a crime.	886

Sec. 4785.17. The director of commerce shall post on the web	887
site maintained by the department of commerce any final order of	888
the residential builders' and maintenance and alteration	889
contractors' board and the date the order was issued. The director	890
shall post the order within thirty days after the order is issued.	891

The director annually shall post on the web site the number	892
of final orders of the board.	893

Sec. 4785.20. (A) The director of commerce shall charge the	894
following fees with respect to administering this chapter:	895

(1) An application processing fee of fifteen dollars;

896

(2) A fee of fifty dollars to take the complete examination	897
for a license or renewal of a license as a residential builder or	898
residential maintenance and alteration contractor;	899

(3) A fee of thirty dollars to take the law and rules portion	900
of the examination for a license or renewal of a license as a	901
residential builder or residential maintenance and alteration	902
contractor;	903

(4) A fee of thirty dollars to take the practice or trades	904
portion of the examination for a license or renewal of a license	905
as a residential builder or residential maintenance and alteration	906
contractor;	907

(5) A fee of thirty dollars to take the salesperson	908
examination;	909

(6) An examination review fee of twenty dollars;

910

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

911

(8) A late renewal fee of twenty dollars;

912

(9) A duplicate license fee of ten dollars;

913

(10) A change of name, address, or employer fee of ten	914
dollars if the change results in the issuance of a new document.	915

(B) There is hereby created in the state treasury the builder	916
enforcement fund. The director shall deposit any fees and fines	917
the director receives under this chapter into the fund. The	918
director shall use the fund to enforce this chapter and to	919
reimburse the attorney general for the reasonable cost of services	920
provided to the director and for expenses incurred in prosecutions	921
for unlicensed practice or a prosecuting attorney for expenses	922
incurred in conducting prosecutions of unlicensed practice.	923

Sec. 4785.99. Whoever violates division (A) of section	924
4785.02 of the Revised Code is guilty of a misdemeanor, punishable	925
by a fine of not less than five thousand dollars or more than	926
twenty-five thousand dollars, imprisonment for not more than one	927
year, or both. If the offender has been previously convicted of a	928
violation of that division, the person is guilty of a misdemeanor	929
punishable by a fine of not less than five thousand dollars or	930
more than twenty-five thousand dollars, imprisonment for not more	931
than two years, or both. In the case of an offense that causes	932
death or serious injury, the person is guilty of a felony	933
punishable by a fine of not less than five thousand dollars or	934
more than twenty-five thousand dollars, imprisonment for not more	935
than four years, or both.	936

Section 2. That existing sections 4722.02 and 4745.01 of the	937
Revised Code are hereby repealed.	938

Section 3. Division (A) of section 4785.02 of the Revised	939
Code, as enacted by this act, shall take effect one hundred eighty	940
days after the effective date of this act.	941

Section 4. (A) Notwithstanding section 4785.03 of the Revised	942
Code, as enacted by this act, the Governor may appoint, as the	943
initial members of the Residential Builders' and Maintenance and	944
Alteration Contractors' Board who are required to be licensed	945
under that section, an individual who satisfies either of the	946
following qualifications:	947

(1) The individual is certified or otherwise approved by a	948
national organization that certifies or otherwise approves	949
individuals in the occupation to be licensed by the Board.	950

(2) The individual has actively engaged in the business of a	951
residential builder or residential maintenance and alteration	952
contractor, taught in an educational institution that prepares	953
applicants for licensure as a residential builder or residential	954
maintenance and alteration contractor, or both, for not less than	955
two years immediately preceding the date of the individual's	956
appointment.	957

(B) Within three years after the effective date of this act,	958
each individual appointed under division (A) of this section shall	959
be licensed as required under section 4785.02 of the Revised Code,	960
as enacted by this act.	961