Citations Affected: IC 24-5.
Synopsis: Home improvement contracts. Amends the statute
governing home improvement contracts to specify that "home
improvement" includes an "exterior home improvement". Defines
"insured consumer" and "exterior home improvement". Provides that,
with respect to a home improvement that is or may be covered by
certain insurance policies, a home improvement supplier must: (1) if
the home improvement contract includes an exterior home
improvement, furnish information concerning cancellation of the
contract to the insured consumer; and (2) have a presence in Indiana or
a previous business relationship. Prohibits certain activities by a home
improvement supplier intended to induce a person to enter into a home
improvement contract or otherwise purchase goods or services from the
home improvement supplier. Provides for cancellation of a home
improvement contract by an insured consumer and resolution of
financial obligations of and to the home improvement supplier.
Effective: July 1, 2012.
January 9, 2012, read first time and referred to Committee on Judiciary.
January 25, 2012, reported _ Do Pass.
January 27, 2012, read second time, amended, ordered engrossed.
January 30, 2012, engrossed.
January 31, 2012, read third time, passed. Yeas 82, nays 13.
A BILL FOR AN ACT to amend the Indiana Code concerning trade
regulation.
replacement, reconstruction, or other modification of residential
property.
(b) The term includes an exterior home improvement.
improvements.
(5) If the description required by subdivision (4) does not include
the specifications for the home improvement, a statement that the
specifications will be provided to the consumer before
commencing any work and that the home improvement contract
is subject to the consumer's separate written and dated approval
of the specifications.
(6) The approximate starting and completion dates of the home
improvements.
(7) A statement of any contingencies that would materially
change the approximate completion date.
(8) The home improvement contract price.
(9) Signature lines for the home improvement supplier or the
supplier's agent and for each consumer who is to be a party to the
home improvement contract with a legible printed or a typed
version of that person's name placed directly after or below the
signature.
(b) The home improvement contract must be in a form that each
consumer who is a party to it can reasonably read and understand.
(c) If a home improvement contract is entered into as a result of
damage, loss, or expense that is or may be covered, in whole or in part,
by the proceeds of an insurance policy, or damage, loss, or expense for
which a third party is liable, the following conditions and requirements
apply to the contract:
(1) For the purpose of subsection (a)(4) through (a)(7), the
description, completion dates, and statement of contingencies
must be prepared for the proposed home improvements to the
extent that the damage, loss, or expense is reasonably known by
the home improvement supplier.
(2) For the purpose of subsection (a)(4), the requirement that a
reasonably detailed description be included in the contract may be
satisfied with a statement that the subject real estate will be
repaired or restored to the same condition in which the real estate
existed before the damage, loss, or expense occurred, or to a
comparable condition.
(3) For the purpose of subsection (a)(6), the starting and
completion dates may be expressed in terms of the number of
days elapsed from the date when sufficient approval of the
insurance carrier terms allowing for adequate repair or restoration
is obtained.
(4) For the purpose of subsection (a)(8), the consumer or insured
consumer may agree to a contract price expressed in terms of the
consumer's or insured consumer's liability for payment after the
application of insurance proceeds or payments from a liable third
party.
(5) The consumer or insured consumer may elect, in writing, to
authorize the commencement of work on the home before the
consumer or insured consumer receives complete specifications.
However, a consumer or an insured consumer who elects to
authorize the commencement of work under this subdivision is
obligated for the home improvements specified and agreed to by
the insurance carrier.
(6) This subdivision applies to a home improvement contract
entered into after June 30, 2012, that includes one (1) or more
exterior home improvements. Before entering into a home
improvement contract with an insured consumer to which this
subsection applies, the home improvement supplier must
inform the insured consumer of the insured consumer's rights
under section 10.5(b) of this chapter by doing the following:
(A) Furnishing to the insured consumer the following
statement: "You may cancel this contract at any time
before midnight on the third business day after you have
received written notification from your insurance company
that all or any part of the claim or contract is not a covered
loss under the insurance policy. See attached notice of
cancellation form for an explanation of this right.".
(B) Furnishing to the insured consumer a form, in
duplicate, that is captioned "NOTICE OF
CANCELLATION" and is attached to the contract but
easily detachable, and that contains the following
statement in at least 10 point, boldface type:
If you are notified by your insurance company that all or
any part of the claim or contract is not a covered loss
under the insurance policy, you may cancel the contract by
mailing or delivering a signed and dated copy of this
cancellation notice or any other written notice to (name of
home improvement supplier) at (address of home
improvement supplier's place of business) at any time
before midnight on the third business day after you have
received such notice from your insurance company.
If you cancel the contract, any payments made by you
under the contract will be returned to you within ten (10)
business days following receipt by (name of home
improvement supplier) of your cancellation notice, minus
any amounts you may owe for work already done by (name
of home improvement supplier).
I HEREBY CANCEL THIS TRANSACTION
_______________________________
(date)
_______________________________
(insured consumer's signature)".
(7) This subdivision applies to a home improvement contract
that is entered into as a result of damage, loss, or expense that
is or may be covered, in whole or in part, by the proceeds of
a personal line property and casualty insurance policy or a
commercial line farm insurance policy that insures residential
property. However, this subdivision does not apply to a
consumer and a home improvement supplier that have a prior
business relationship. After June 30, 2012, a home
improvement supplier may not enter into a home
improvement contract to which this subdivision applies unless
one (1) or more of the following apply:
(A) The home improvement supplier resides, is domiciled,
or is authorized to do business in Indiana.
(B) The home improvement supplier maintains in Indiana
one (1) or more fixed physical locations from which the
home improvement supplier engages in or solicits home
improvement contracts.
(C) The home improvement supplier has appointed a
resident agent in Indiana for service of legal process.
(d) A modification to a home improvement contract is not
enforceable against a consumer unless the modification is stated in a
writing that is signed by the consumer.
consumer, or to any other person, any form of compensation,
including a gift, prize, bonus, coupon, credit, referral fee, or
other item of monetary value for any reason, including the
display of a sign or advertisement on residential property.
(b) This subsection applies to a home improvement contract
entered into after June 30, 2012, that includes one (1) or more
exterior home improvements. An insured consumer who enters
into a home improvement contract for which the home
improvement contract price, or charges for other goods and
services under the contract, will or may be paid from the proceeds
of a claim under a personal line of property and casualty
insurance, may cancel the contract before midnight on the third
business day after the insured consumer has received written
notice from the insurance company that any part of the claim or
contract is not a covered loss under the insurance policy. An
insured consumer who seeks to cancel a home improvement
contract under this subsection must provide to the home
improvement supplier, at the address specified in the form
provided under section 10(c)(6)(B) of this chapter, written notice
of the insured consumer's intent not to be bound by the contract.
If the notice of cancellation is sent by mail, the notice is effective
upon deposit of the notice into the United States mail, with postage
prepaid and the notice properly addressed to the home
improvement supplier. Subject to subsection (c), not later than ten
(10) days after a home improvement contract is cancelled under
this subsection, the home improvement supplier shall tender to the
insured consumer:
(1) any payment or deposit made by the insured consumer;
and
(2) any note or other evidence of indebtedness of the insured
consumer.
(c) If:
(1) an insured consumer cancels a home improvement
contract under subsection (b); and
(2) the home improvement supplier has performed emergency
or temporary services that the insured consumer
acknowledged in writing before their performance to be
necessary to prevent damage to the residential property;
the home improvement supplier is entitled to the reasonable value
of the emergency or temporary services performed.
(d) A home improvement supplier shall not:
(1) represent or negotiate on behalf of an insured consumer;