PA 16-35—HB 5327

General Law Committee

Appropriations Committee

AN ACT REQUIRING CERTAIN RESIDENTIAL RESTORATION SERVICE PROVIDERS TO REGISTER AS HOME IMPROVEMENT CONTRACTORS

SUMMARY: This act requires people who perform property repair or remediation work to meet several new requirements.

First, the act expands the scope of the home improvement registration law by requiring anyone performing water, fire, or storm restoration or mold remediation to register with the Department of Consumer Protection (DCP) as a contractor ( 1). This requirement applies to work done on property that is used or designed for use as a private residence, dwelling place, or residential rental property (see BACKGROUND).

The act requires any contract for repair, remediation, or mitigation work relating to a claim under a personal or commercial risk insurance policy to comply with the home improvement law's required contract content requirements ( 3). By law, these contracts must include specific information about the contractor and the work to be done and provide certain disclosures (see BACKGROUND).

The act also requires contractors conducting home improvement repair work related to a loss covered under these insurance policies to provide the insured with a written notice of the work to be completed and the estimated total price ( 2). Prior law exempted home improvement contractors from this notice requirement.

Lastly, the act requires contractors to make additional disclosures to insureds on their ability to waive the right to cancel contracts for certain repair, remediation, or mitigation work performed on an emergency basis ( 2) (see below). If the contractor does not comply with the notice requirements, any contract for the service between that person and the insured is void.

EFFECTIVE DATE: January 1, 2017

DISCLOSURE ABOUT WAIVING THE RIGHT TO CANCEL

The act requires contractors to add a disclosure in contracts or documents related to repair, remediation, or mitigation work conducted under a personal risk insurance or commercial risk policy that is (1) subject to the Home Solicitation Sales Act, which governs situations where a contractor personally solicits work, and (2) needed to meet an insured's bona fide immediate personal emergency.

Specifically, this disclosure must state that the insured may waive his or her right to cancel within three business days. The insured may waive this right by providing the contractor with a handwritten, separate, dated, and signed personal statement describing the emergency needing immediate relief and expressly acknowledging and waiving the right to cancel within three business days.

BACKGROUND

Home Improvement Contractors

By law, home improvement contractors must register with DCP and pay $220 annually, $100 of which goes to the Home Improvement Guaranty Fund (CGS 20-420, -421 & -432). The fund reimburses customers (up to $15,000 per claim) who are unable to recover losses suffered because a registered contractor failed to fulfill a contract valued at more than $200. Performing home improvement work without a registration is a class B misdemeanor (see Table on Penalties) and an unfair or deceptive trade practice. A violator must pay restitution. The DCP commissioner may also impose civil penalties of up to $1,500 and must have the motor vehicles commissioner deny reissuance of the contractor's commercial motor vehicle registration until the violator registers with DCP (CGS 20-427 & -427a).

Among other things, registered contractors must (1) include their registration number in advertisements, (2) show their registration when asked to do so by any interested party, and (3) use written contracts that meet certain statutory requirements (CGS 20-427 & -429).

Home Improvement Contract Requirements

By law, a home improvement contract must include certain provisions for it to be enforceable. Specifically, it must meet the following requirements:

1. be written, dated, and signed by both parties;

2. include the entire agreement;

3. identify the contractor and state his or her address and registration number;

4. include a notice of cancellation rights in accordance with the Home Solicitations Sales Act;

5. include starting and completion dates;

6. be entered into by a registered contractor or salesperson; and

7. include a provision disclosing each legal entity that is or has been a home improvement or new home construction contractor in which the owner or owners are or were shareholders, members, partners, or owners within the past five years (CGS 20-429).

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