In the interest of the public health, safety, welfare, and consumer protection and to regulate the home building and private dwelling construction industry, the purpose of this chapter, and the intent of the Legislature in passing it, is to provide for the licensure of those persons who engage in home building and private dwelling construction, including remodeling, and to provide home building standards in the State of Alabama. The Legislature recognizes that the home building and home improvement construction industries are significant industries. Home builders may pose significant harm to the public when unqualified, incompetent, or dishonest home building contractors and remodelers provide inadequate, unsafe or inferior building services. The Legislature finds it necessary to regulate the residential home building and remodeling construction industries.

The board shall annually submit to the Governor a report of its transactions for the preceding year. The board shall file with the Secretary of State a copy of the report submitted to the Governor.

(a) The board is authorized to promulgate rules and regulations necessary to effectuate the provisions of this chapter and accomplish its work. The rule-making powers of the board are subject to the Alabama Administrative Procedure Act as codified in Chapter 22 of Title 41.

(b) For the purposes of this chapter, any notice, application, or other document required herein which is mailed certified mail return receipt requested, shall be deemed to have been filed as of the date it is postmarked. The provisions of this subsection shall be retroactively effective to all mailings relating to board business occurring on or after May 21, 1992.

The county commissions of the several counties are authorized and empowered to adopt building laws and codes by ordinance which shall apply in the unincorporated areas of the county. The building laws and codes of the county commission shall not apply within any municipal police jurisdiction, in which that municipality is exercising its building laws or codes, without the express consent of the governing body of that municipality. The building laws and codes of the county commission may apply within the corporate limits of any municipality with the express consent of the governing body of the municipality. The county commission may employ building inspectors to see that its laws or codes are not violated and that the plans and specifications for buildings are not in conflict with the ordinances of the county and may exact fees to be paid by the owners of the property inspected. Utilizing the same authority and procedures as municipalities pursuant to Sections 11-53A-20 to 11-53A-26, inclusive, the county commission may condemn buildings, parts of buildings, or structures dangerous to the public and prohibit the use thereof and abate the same as a nuisance. The county commissions, municipalities, and other public entities are hereby authorized to enter into mutual agreements, compacts, and contracts for the administration and enforcement of their respective building laws and codes.

It is the duty of the building official, or other authority charged with the duty, of issuing building or similar permits, of any incorporated municipality or subdivision of the municipality or county, to refuse to issue a permit for any undertaking which would require a license hereunder unless the applicant has furnished evidence that he or she is either licensed as required by this chapter or is exempt from the requirements of this chapter. The building official, or other authority charged with the duty of issuing building or similar permits, shall report to the board the name and address of any person who, has violated this chapter. Nothing contained herein shall require a builder to pay license fees for subcontractors who will be or were involved in the construction for which the permit is being obtained as a condition of the issuance of a building permit or the issuance of a certificate of occupancy. The builder shall submit to the issuing municipality if requested a list of the subcontractors with correct physical address and phone numbers involved in the construction project within 15 days of the issuance of the building permit. Should the builder add any other subcontractor to the project, the builder will submit the subcontractors name, address, and phone number to the municipality within three working days of hiring. An updated list of subcontractors shall be furnished by the builder before the issuance of a certificate of occupancy by the municipality.

Any person who undertakes or attempts to undertake the business of residential home building without holding a current and valid residential home builders license, issued by the Home Builders Licensure Board, as required by the provisions of this chapter or who knowingly presents to, or files false information with the board for the purpose of obtaining the license or who violates any law or code adopted by a county commission under this chapter shall be deemed guilty of a Class A misdemeanor.

Upon notice from the board, any person who undertakes or attempts to undertake the business of residential home building without holding a current and valid residential home builders license, as required by the provisions of this chapter, shall immediately cease. Such notice shall be in writing and shall be given to the owner of the property, or to his or her agent, or to the residential home builder, or to the person doing the work, and shall state the conditions under which work may be resumed.

A residential home builder, who does not have the license required, may not bring or maintain any action to enforce the provisions of any contract for residential home building which he or she entered into in violation of this chapter.

Whenever it shall appear to the board that any residential home builder has violated or is about to violate this chapter, the board may in its own name petition the circuit court of the county where the violation occurred or is about to occur to issue a temporary restraining order or other appropriate injunctive relief enjoining the violation.

The board is authorized to establish a Homeowner's Recovery Fund from which an aggrieved homeowner may recover actual economic damages, not including interest and court costs, sustained within the State of Alabama as the direct result of conduct of a licensee in violation of this chapter or the rules and regulations of the board.

Any payments from the Homeowner's Recovery Fund shall be subject to the following limitations and conditions:

(1) Payments for claims based on judgments or settlements against any one licensee shall not exceed fifty thousand dollars ($50,000) in the aggregate.

(2) Payments for claims arising out of the same transaction shall not exceed twenty thousand dollars ($20,000) in the aggregate.

(3) The Homeowner's Recovery Fund shall make payments only to homeowners.

(4) The Homeowner's Recovery Fund shall not make payments based on consent judgments.

(5) Failure of the homeowner to follow any provisions of this chapter shall preclude payment from the Homeowner's Recovery Fund.

Each licensee shall, on order of the board, pay a fee not to exceed sixty dollars ($60), no more than once a year, per licensee for deposit in the Homeowner's Recovery Fund. A licensee on inactive status shall not be required to contribute to the Homeowner's Recovery Fund. The annual Homeowner's Recovery Fund fee shall be set by the board after considering all expenses incurred by the board in defending, satisfying, or settling any claims paid from the Homeowner's Recovery Fund.

When a complaint is filed which may result in liability for the Homeowner's Recovery Fund, the complainant shall notify the board in writing, by certified mail, when the action is commenced.

When the notice is received, the board may enter an appearance, file pleadings and appear at court hearings, defend or take action it deems appropriate either on the behalf and in the name of the defendant or in its own name. The board may seek any appropriate method of judicial review. The board may settle or compromise the claim. Any expenses incurred by the board in defending, satisfying, or settling any claim shall be paid from the Homeowner's Recovery Fund.

When a complainant obtains a valid judgment, excluding consent judgments, in a court of competent jurisdiction against a licensee on the grounds set out above, the aggrieved homeowner may, when judgment is final, file a verified claim in the court in which the judgment was entered and, on 30 days' written notice to the board, may apply to the court for an order directing payment out of the Homeowner's Recovery Fund of the amount remaining unpaid on the judgment.

The court shall proceed on such application forthwith and, on hearing, the complainant shall be required to show that:

(1) He or she is not the spouse, child, or parent of the debtor, or the personal representative of the spouse, child, or parent or a shareholder, officer, or director of the debtor.

(2) He or she has obtained a judgment, as described in this section, stating the amount of the judgment and the amount owing on the judgment at the date of the application, and, that in such action, he or she had joined any and all bonding companies which issued corporate surety bonds to the judgment debtor as principal and all other necessary parties.

(3) The following items, if recovered by him or her have been applied to the actual compensatory damages awarded by the court:

(a) Any amount recovered from the judgment debtor.

(b) Any amount recovered from bonding companies.

(c) Any amount recovered in out-of-court settlements.

The court shall order the Homeowner's Recovery Fund to pay the sum it finds due, subject to the provisions and limitations of this section.

Should the board pay from the Homeowner's Recovery Fund any amount in settlement of a claim or toward satisfaction of a judgment against a licensee, all licenses of the licensee may be terminated by the board. The board may refuse to issue a new license to the former licensee until he or she has repaid in full, plus interest at the rate of 12 percent per annum, the amount paid from the Homeowner's Recovery Fund. A discharge in bankruptcy shall not relieve a person from the penalties and disabilities provided in this section.

If the balance in the Homeowner's Recovery Fund is insufficient to satisfy a duly authorized claim or portion of a claim, the board shall, when sufficient money has been deposited in the Homeowner's Recovery Fund, satisfy the unpaid claims in the order that the claims were filed.

The sums received by the board, pursuant to the provisions of this section, shall be deposited into the State Treasury and held in a special fund to be known as the Homeowner's Recovery Fund, and shall be held by the board in trust for carrying out the purposes of the Homeowner's Recovery Fund. These sums may be invested by the State Treasurer in any investments which are legal under the laws of this state. Any interest or other income from investments of the Homeowner's Recovery Fund shall be deposited into the Homeowner's Recovery Fund.

When, on order of the court, the board has paid from the Homeowner's Recovery Fund any sum, the board shall be subrogated to all the rights of the judgment creditor, and all his or her rights, title, and interest in the judgment, to the extent of the amount paid from the Homeowner's Recovery Fund, shall thereby be assigned to the board. Any amount and interest recovered by the board on the judgment shall be deposited to the Homeowner's Recovery Fund.

The limitations and conditions of payment from the Homeowner's Recovery Fund as established by Act 2002-72 shall not apply in any case where, prior to May 1, 2002, a complainant has obtained a valid judgment in a court of competent jurisdiction against a licensee on the grounds set out in this chapter.

The provisions of this chapter shall not apply to any county the population of which is 30,000 or less according to the most recent federal decennial census, unless the county commission of the county irrevocably elects to have the county covered by this chapter.

The Home Builders Licensure Board shall be an enumerated board pursuant to Sections 41-20-1 through 41-20-16, and shall be reviewed at the same time as the State Board of Medical Examiners.

As used in this chapter, the following terms shall have the following meanings, respectively, unless the context clearly indicates otherwise:

(1) BOARD. The Home Builders Licensure Board.

(2) CONTRACTING. Except as exempted herein, engaging in residential and private residence construction business as a contractor.

(3) HOME BUILDERS LICENSURE BOARD. The board created herein to regulate the home building and residential construction industry.

(4) HOMEOWNER. One who owns and resides or intends to reside in a structure constructed or remodeled by a licensee of the board.

(5) INACTIVE LICENSE. A license issued at the request of a licensee, or a building official or a building inspector, which is renewable, but which is not currently valid.

(6) LICENSE. A new license or a renewal license issued by the board pursuant to this chapter.

(7) LICENSEE. A holder of a certificate issued pursuant to this chapter.

(8) PERSON. Any natural person, limited or general partnership, corporation, association, limited liability company, or other legal entity, or any combination thereof.

(9) RESIDENCE. A single unit providing complete independent residential living facilities for one or more persons, including permanent provisions for living, sleeping, eating, cooking, and sanitation.

(10) RESIDENTIAL HOME BUILDER. One who constructs a residence or structure for sale or who, for a fixed price, commission, fee, or wage, undertakes or offers to undertake the construction or superintending of the construction, of any residence or structure which is not over three floors in height and which does not have more than four units in an apartment complex, or the repair, improvement, or reimprovement thereof, to be used by another as a residence when the cost of the undertaking exceeds ten thousand dollars ($10,000). Nothing herein shall prevent any person from performing these acts on his or her own residence or on his or her other real estate holdings. Anyone who engages or offers to engage in such undertaking in this state shall be deemed to have engaged in the business of residential home building.

(11) STRUCTURE. A residence, including a site-built home, a condominium, a duplex or multi-unit residential building consisting of not more than four residential units.

There is established the Home Builders Licensure Board. The board shall have nine members, at least one from each United States Congressional District in this state, who shall be appointed as follows: three by the Governor, three by the Lieutenant Governor, and three by the Speaker of the House of Representatives, from a list of three qualified individuals for each position, provided by the governing body of the Home Builders Association of Alabama. Seven of the members shall be residential home builders, as defined in this chapter, with at least five years' experience as a residential home builder and each shall be a bona fide resident of the State of Alabama. One member shall be a building official or inspector currently employed by a city, county, or state governmental entity and actively engaged in inspecting or regulating residential construction in this state. One shall be a consumer member of the general public not employed by or affiliated with a licensee hereunder, and who has no spouse or immediate family member employed by or affiliated with a licensee hereunder. The membership of the board shall be inclusive and reflect the racial, gender, geographic, urban/rural, and economic diversity of the state. Of the initial members of this board, the appointing authorities shall designate that each appointee shall serve for an initial term of one, two, or three years, their terms of office expiring on December 31, of said years. Subsequent terms shall be for a period of three years. This appointing authority shall make an appointment to fill a vacancy for the remainder of any unexpired term from a list of three qualified persons supplied by the governing body of the Home Builders Association of Alabama. Each board member shall hold over after the expiration of his term until his or her successor shall be duly appointed and qualified.

The board shall meet at such other times as the chair may designate; provided, however, that the board shall meet within thirty days after appointment for the purpose of organizing and transacting such business as may properly come before it. Four members shall constitute a quorum at all meetings. The secretary of the board shall keep such records of each meeting as shall be required by the board.

(a) All residential home builders shall be required to be licensed by the Home Builders Licensure Board annually except that any person engaged in residential home building on or before January 1, 1992, shall be duly licensed by the board, without examination, after paying the required annual fee and submitting to the board, within a period of twelve months after the board is established, one of the following:

(1) An affidavit showing that the residential home builder has constructed a minimum of one residence as defined herein within the year prior to January 1, 1992, or five residences within the previous five years.

(2) Satisfies the board of his or her building qualifications and experience.

(3) Is currently licensed as a residential home builder by a jurisdiction in this state which requires an examination for licensure.

(4) Is a currently licensed residential remodeler by a jurisdiction in this state, who by his or her personal affidavit can establish that his or her business did a gross remodeling dollar volume in the previous calendar year of two hundred fifty thousand dollars ($250,000) or more.

(b) Any person engaged in residential home building in a county in which the county commission has irrevocably elected, pursuant to Section 34-14A-6, to have the county covered by this chapter, shall be duly licensed by the board, without a written examination testing his or her experience and ability, by meeting the licensing requirements set out in Section 34-14A-7, by paying the required annual fee, and by submitting to the board, within one year from the date the county commission of the electing county notifies the board of the action of the county commission making applicable this chapter, any one of the following:

(1) An affidavit showing that the residential home builder has constructed a minimum of one residence as defined herein within the year prior to the date the county commission notifies the board of its irrevocable election to make this chapter applicable to the electing county or at least five residences within the previous five years.

(2) Satisfies the board of his or her building qualifications and experience.

(3) Is currently licensed as a residential home builder by a jurisdiction in this state which requires an examination for licensure.

(4) Is currently licensed as a residential remodeler by a jurisdiction in this state, who by his or her personal affidavit can establish that his or her business did a gross remodeling dollar volume of two hundred fifty thousand dollars ($250,000) or more in the year prior to the date the county commission notified the board of its irrevocable election to make this chapter applicable to the electing county.

(c) Except as provided in this chapter, all licenses shall be issued or renewed upon the payment to the board of the annual license fee. The annual license fee shall be set by the board after it considers its cost of operation. The annual fee may be increased or decreased by the board but in no event shall the board set the annual fee at an amount which would not provide sufficient revenues to pay all the salaries, costs, and expenses incurred by the board in enforcing this chapter. The board may charge application processing fees, inactive license fees, and late fees. The inactive fees may be waived for building officials. The board may, upon request in writing, refund fees, except the application processing fee, paid by an applicant who is denied a license or who fails to complete the application process. No fees shall be refunded to a licensee as a result of a license revocation. The annual license fee shall be for a period of twelve months beginning January first of each year. All license fees collected by the board shall be paid into the State Treasury to the credit of the Home Builders Licensure Board Fund and its funds shall be subject to withdrawal only upon warrant of the state Comptroller to be issued upon certification of the secretary/treasurer of the board.

(d) Any funds remaining in the State Treasury to the credit of the Home Builders Licensure Board Fund at the end of each year shall be paid into the General Fund of the state on or before January 15, in each succeeding year, except that should the board exercise its authority to establish the Homeowner's Recovery Fund as provided in this chapter, any funds remaining in the State Treasury to the credit of the Home Builders Licensure Board Fund shall be paid into the Homeowner's Recovery Fund of the board. The board is authorized, at all times, to retain a sum not in excess of two hundred fifty thousand dollars ($250,000) to meet any emergency that may arise which may affect its efficient operation.

(e) No funds shall be withdrawn or expended except as budgeted and allocated according to Sections 41-4-80 to 41-4-96, inclusive, and 41-19-1 to 41-19-12, inclusive, and only in amounts as stipulated in the general appropriations bill or other appropriations bills.

This chapter does not apply to:

(1) Any employee of a licensee who does not hold himself or herself out for hire or engage in contracting, except as such employee of a licensee.

(2) An authorized employee of the United States, the State of Alabama, or any municipality, county, or other political subdivision, if the employee does not hold himself or herself out for hire or otherwise engage in contracting except in accordance with his or her employment.

(3) General contractors holding a current and valid license, issued prior to January 1, 1992, under Sections 34-8-1 through 34-8-27.

(4) Licensed real estate agents operating within the scope of their respective licenses on behalf of clients.

(5) Owners of property when acting as their own contractor and providing all material supervision themselves, when building or improving one-family or two-family residences on such property for the occupancy or use of such owners and not offered for sale.

In any action brought under this chapter, proof of the sale or offering for sale of such structure by the owners of property, as provided in this subsection, within one year after completion of same is presumptive evidence that the construction was undertaken for the purpose of sale.

(6) This chapter does not apply to mobile homes or to any structure that is installed, inspected, or regulated by the Alabama Manufactured Housing Commission or the repair, improvement, or reimprovement of any such structure, and shall not in any way change or interfere with the duties, responsibilities, and operations of the Alabama Manufactured Housing Commission as defined in Sections 24-4A-1 through 24-6-4.

(7) The provisions of this chapter shall not apply in those counties having populations of less than 30,000 according to the most recent decennial census provided however the county commission of such counties may irrevocably elect to have their respective counties covered by the provisions of this chapter in the same fashion and under the same conditions as shall be applicable at the time of the election.

(a) Any residential home builder who desires to receive a new or renewal license under this chapter shall make and file with the board 30 days prior to the next meeting of the board a written application on a form prescribed by the board. Such application shall be accompanied by the payment of the annual license fee required by the board. After the board accepts the application the applicant may be examined by the board at its next meeting. The board in examining the applicant shall consider the following qualifications of the applicant:

(1) Experience.

(2) Ability.

(3) Character.

(4) Business-related financial condition.

a. The board may require a financial statement on a form prescribed by the board and a public records search directly from a credit reporting agency.

b. The board may require a positive net worth or other evidence of business-related financial condition sufficient to reasonably satisfy the board of the applicant's financial responsibility.

c. The board may require that business-related judgments, judgment liens, and other perfected liens, must be satisfied and released.

d. Any information obtained by the board pursuant to this subsection relating to the financial condition of an applicant shall not be public information.

(5) Ability and willingness to serve the public and conserve the public health and safety.

(6) Any other pertinent information the board may require.

If the board finds the applicant qualified to engage in residential home building in Alabama, the applicant shall be issued a license. An applicant rejected by the board shall be given an opportunity to be reexamined after a new application has been filed and an additional application fee paid.

A record shall be made and preserved by the board of each examination and the findings of the board pertaining to the examination. A copy of the record shall be made available to any applicant requesting it upon the payment of a reasonable fee for same to the board.

(b) Each licensee shall notify the board within 10 days after notice of the institution of any criminal prosecution against him or her, or of a civil complaint against him or her, if the subject matter of the civil complaint involves a residential home building transaction or involves the goodwill of an existing home building business or licensee. The notification shall be in writing, by certified mail, and shall include a copy of the complaint or, if a criminal charge, the specific charge made together with a copy of any indictment or information making the charges.

(c) Each licensee shall notify the board in writing by certified mail within 10 days after he or she receives the notice that any criminal verdict has been rendered against him or her, or that a criminal action pending against him or her has been dismissed, or that a civil action in which he or she was a defendant and which involved a home building transaction or the goodwill of a home building business has resulted in a judgment or has been dismissed. The notification shall be in writing and shall include a copy of the court order or other document giving the licensee such notice.

(d)(1)a. Any licensee who desires to receive an inactive license shall make and file with the board a written application for an inactive license on a form prescribed by the board prior to the expiration of his or her current license. The application shall be accompanied by the payment of the annual inactive license fee required by the board. No act for which a license is required may be performed under an inactive license. In the event a person holding a current inactive license applies for a license, he or she may rely upon his or her inactive license as evidence of the experience and ability requirements for licensure under subdivisions (1) and (2) of subsection (a).

b. A person holding an expired license who seeks to reactivate his or her license within three years of the date of expiration shall be deemed to have satisfied the experience and ability requirements for licensure if application is made within the three-year time period and all other licensing requirements pursuant to subsection (a) have been met.

(2) Any building official or building inspector who desires to receive an inactive license shall make and file with the board 30 days prior to the next meeting of the board a written application for an inactive license on a form prescribed by the board. After the board accepts the application, the applicant may be examined by the board at its next board meeting. The board, in examining the applicant, shall consider the following qualifications of the applicant as satisfying the experience and ability requirements for licensure:

a. That the building inspector is an employee of the United States, the State of Alabama, or any municipality, county, or other political subdivision and, by virtue of that employment, is exempted or prohibited by law from holding a license; and

b. That the building inspector either:

1. Maintains current certification from the Southern Building Code Congress International as one of the following:

(i) Chief building official.

(ii) Deputy building official.

(iii) Building inspector.

(iv) Housing inspector.

(v) Design professional.

(vi) Plan reviewer.

2. Possesses sufficient building qualifications and experience to receive a license, as demonstrated by satisfactory evidence presented to the board.

3. In the event a building official or building inspector holding a current inactive license applies for a license, he or she may rely upon his or her inactive license as evidence of the experience and ability requirements for licensure under subdivisions (1) and (2) of subsection (a).

(a) The board may revoke or suspend the license of any licensee who, in the opinion of the board, has committed fraud or deceit in obtaining a license required by this chapter or who has been guilty of gross negligence, incompetence, or misconduct in the practice of residential home building.

(b) An original homeowner may file a consumer complaint alleging a violation of this section against any licensee hereunder. Consumer complaints shall be made in writing and sworn to by the person making the consumer complaint and shall be submitted to the executive director of the board within six years of the date of substantial completion of construction or within six years of the date the original homeowner took possession of the residence.

(c) An investigation may be initiated upon receipt of a consumer complaint or may be initiated by the board. The board may resolve violations by agreement between the board and the licensee with or without the filing of a formal administrative summons and complaint.

(d) With the consent of the licensee, the board may conduct an informal hearing without meeting the requirements of the Administrative Procedure Act if no action is taken other than a reprimand, public or private.

(e) The charges, unless dismissed without hearing by the board as unfounded or trivial, shall be heard within three months after the filing of an administrative summons and complaint by the board's executive director.

(f) A copy of the charges, with notice of the time and place of the hearing, shall be served on the licensee charged at least fifteen days before the hearing date.

(g) The licensee charged may appear personally and may be represented by counsel. He or she may cross-examine witnesses against him or her and may produce evidence and witnesses in his or her defense.

(h) If, after hearing, the board votes to revoke the license of the licensee charged on the basis of fraud or deceit in obtaining his or her license or gross negligence, incompetence, or misconduct in residential home building activity, it shall order the license revoked.

(i) After revocation, the licensee may within ten days file with the board written notice of his or her intention to appeal from the order of the board. Appeals from orders of the board shall be to the circuit court with jurisdiction of licensee's residence, or if the licensee is out of state, then to the Circuit Court of Montgomery County, for a determination by the court whether the decision of the board is supported by substantial evidence. If the court so finds it shall affirm the action of the board.

(j) The board may issue a license to a licensee whose license has been revoked, and may reinstate a suspended license prior to the end of the suspension period, if four or more members of the board vote in favor of the issuance or reinstatement.

(k) In addition to any other disciplinary action authorized pursuant to this chapter, the board may levy and collect administrative fines for violations of this chapter or the rules or regulations of the board in an amount not to exceed two thousand dollars ($2,000) for each violation.

A complete roster of licensees shall be prepared and published annually by the board.