Bills › 91st General Assembly
Relating to home inspections, including persons authorized to perform home inspections and requirements for independent home inspection reports, providing penalties, and making penalties applicable
Topics:Business & economyHousing & propertyProfessional licensing
Same legislation: SF 460
Where it is now
- Done: IntroducedFebruary 18, 2025
- Done: SubcommitteeFebruary 18, 2025
- Done: Senate committeeFebruary 26, 2025
- Skipped: Passes the SenateContinued as SF 460
- Next: House committee
- Next: Passes the House
- Next: To the Governor
- Next: Signed into law
Became SF 460 → Its progress continues under the new number. Go to SF 460 What’s a funnel?
What’s in it
AI summary Only licensed home inspectors, architects, or professional engineers may issue independent home inspection reports. The law bans inspectors from taking kickbacks, offering to fix problems they find for a fee, or inspecting homes where they have a financial interest. Inspectors must also follow specific rules for their reports and carry certain types of insurance to protect their clients.1
Read the official explanation
This bill prohibits a person from issuing an independent home inspection report, defined in the bill, unless the person is a home inspector, defined in the bill, an architect licensed pursuant to Code chapter 544A (licensed architects), or a professional engineer licensed pursuant to Code chapter 542B (professional engineers and land surveyors). The bill requires a home inspector to perform a home inspection, defined in the bill, with the degree of care that a reasonably prudent home inspector would exercise, which shall be based on the standards of practice and a code of ethics of a national home inspectors association. The bill makes a home inspector, an employer of a home inspector, or a person having a financial interest in the employer of a home inspector (1) offering to repair an issue identified in a home inspection report for a fee, (2) inspecting for a fee a property in which the person has an interest in the transfer, (3) offering a fee, commission, or kickback to a seller for a referral for an inspection, or (4) accepting payment for a particular result of a home inspection, an unfair practice. _____ is punishable as provided by law, including by a civil penalty not to exceed $40,000. This prohibition does not apply to a home warranty company that is affiliated with or retains a home inspector if the home warranty company performs repairs pursuant to claims made under a home warranty contract. The bill requires a home inspection report to include certain elements. A home inspection report must include a description of the scope of the report, a list of material defects found during the home inspection, and certain statements about the contents of the report. A home inspector who fails to include a necessary element in a home inspection report is guilty of a simple misdemeanor punishable by a fine not to exceed $500. The bill provides limited circumstances under which a home inspection report may be disclosed to a person other than the person who commissioned the report. The bill prohibits a home inspection report from including an estimate as to repair costs unless the report identifies the source of the estimate, the estimate is stated as a range, and the home inspector suggests that the parties consult a professional in the quoted repair. The bill prohibits a contract to provide a home inspection from limiting the liability of the person providing the home inspection for gross negligence or willful misconduct, or waiving or modifying a provision of the bill. The bill requires a home inspector to maintain insurance against errors and omissions in the performance of a home inspection and general liability, with coverages of not less than $100,000 per occurrence and $500,000 in the aggregate, and with deductibles of not more than $2,500. The bill makes a failure to maintain insurance required by the bill, or a false representation as a person authorized to perform home inspections, a simple misdemeanor for a first offense and a serious misdemeanor for a second or subsequent offense. A simple misdemeanor is punishable by confinement for no more than days and a fine of at least $105 but not more than $855. _____ A serious misdemeanor is punishable by confinement for no more than one year and a fine of at least $430 but not more than $2,560.
Changed since by amendment S-3023; see Amendments.
Senate subcommittee
Named February 18, 2025. On March 3, 2025 it recommended passage.
Three legislators hear a bill first and recommend what the committee should do; it’s the best time to weigh in. How to take part
Fiscal note
AI summary This bill establishes new regulations, insurance requirements, and criminal penalties for home inspectors. While the bill creates new criminal offenses, the fiscal impact cannot be estimated and is not anticipated to be significant for the state's General Fund, the Judicial Branch, the Indigent Defense Fund, or the Department of Corrections.3
Read the fiscal note
Description
Senate File 460 relates to home inspections, including persons authorized to perform home inspections and requirements for independent home inspection reports, and does the following:
- Establishes regulations for home inspectors, including requiring home inspectors to adhere to industry standards and a national code of ethics.
- Prohibits conflicts of interest for home inspectors.
- Establishes penalties for violations of the Bill, which are considered unfair practices and may result in civil penalties up to $40,000.
- Requires home inspection reports to be in writing and to include specific elements, such as the scope of the inspection and a list of material defects. Failure to meet these requirements may result in a simple misdemeanor, punishable by a fine of up to $500.
- Restricts the disclosure of home inspection reports and limits cost estimates to repair a defect found during an inspection unless the estimate includes a specified source, a range of costs, and a statement that an estimate from a specialized contractor should be considered.
- Requires home inspectors to maintain liability insurance with minimum coverage of $100,000 per occurrence and $500,000 in total. Failure to meet this requirement or falsely claiming to be a home inspector may result in a simple misdemeanor for a first offense and a serious misdemeanor for subsequent offenses. Penalties may range from fines to confinement.
Background
Home inspectors are not currently required to be licensed in Iowa, although they may receive certification from a national inspector association.
A simple misdemeanor is punishable by up to 30 days and a fine of at least $105 but not more than $855. A serious misdemeanor is punishable by up to one year of confinement and a fine of at least $430 but not more than $2,560.
Assumptions
- The following will not change over the projection period: charge, conviction, and sentencing patterns and trends; prisoner length of stay (LOS); revocation rates; plea bargaining; and other criminal justice system policies and practices.
- A delay of six months is assumed from the effective date of this Bill to the date of first entry of affected offenders into the correctional system.
- Marginal costs for county jails cannot be estimated due to a lack of data. For purposes of this analysis, the marginal cost for county jails is assumed to be $50 per day.
- According to the Department of Corrections (DOC), crimes involving professionals are rare, and it is anticipated that home inspectors would comply with the legislation.
Correctional Impact
Senate File 460 creates new criminal offenses; however, crimes involving professionals are rare. As a result, the correctional impact cannot be estimated due to a lack of existing conviction data but is expected to be minimal. Figure 1 shows estimates for sentencing to State prison, parole, probation, or Community-Based Corrections (CBC) residential facilities; LOS in months under those supervisions; and supervision marginal costs per day for a serious misdemeanor. Refer to the Legislative Services Agency (LSA) memo addressed to the General Assembly, Cost Estimates Used for Correctional Impact Statements, dated January 13, 2025, for information related to the correctional system.
Figure 1 — Sentencing Estimates and Length of Stay (LOS) in Months
Minority Impact
Senate File 460 creates new criminal offenses. As a result, the Department of Management (DOM) Criminal Justice Planning cannot use existing data to estimate the minority impact of the Bill. Refer to the LSA memo addressed to the General Assembly, Minority Impact Statements, dated January 13, 2025, for information related to minorities in the criminal justice system.
Fiscal Impact
Senate File 460 establishes new criminal offenses. Although the fiscal impact cannot be estimated, it is not anticipated to be significant. Figure 2 shows the average State cost per offense for a simple misdemeanor and a serious misdemeanor. The estimated impact to the General Fund includes operating costs incurred by the Judicial Branch, the Indigent Defense Fund, and the DOC.
Figure 2 — Average State Cost Per Offense
Sources
- Department of Management (DOM) Criminal Justice Planning
- Department of Corrections
- Department of Inspections, Appeals, and Licensing
- Final Fiscal Note — Registration of Home Inspectors · June 6, 2025
- Registration of Home Inspectors · March 12, 2025
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91st General Assembly