Bill Text: OH HB557 | 2009-2010 | 128th General Assembly | Introduced

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Bill Title: To establish laws governing the practices of home improvement contractors and to provide civil remedies for home owners who are damaged by a home improvement contractor who violates the law.

Spectrum: Partisan Bill (Democrat 3-0)

Status: (Introduced - Dead) 2010-07-12 - To Civil & Commercial Law [HB557 Detail]

Download: Ohio-2009-HB557-Introduced.html

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As Introduced

128th General Assembly Regular Session 2009-2010

H. B. No. 557

Representatives Murray, Patten 

Cosponsor: Representative Foley 

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A BILL

To enact sections 4722.01 to 4722.08 of the Revised

1

Code to establish laws governing the practices of

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home improvement contractors and to provide civil

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remedies for home owners who are damaged by a home

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improvement contractor who violates the law.

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BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 4722.01, 4722.02, 4722.03, 4722.04,	6
4722.05, 4722.06, 4722.07, and 4722.08 of the Revised Code be	7
enacted to read as follows:	8

Sec. 4722.01.  As used in this chapter:

9

(A) "Construction defect" means a deficiency that arises	10
directly or indirectly from a home improvement.	11

(B) "Dwelling action" means any of the following actions,	12
brought against a home improvement contractor, for damages or the	13
loss of use of real property, caused by a construction defect:	14

(1) A civil action in contract or tort for damages or	15
indemnity;	16

(2) Any action brought pursuant to Chapter 1345. of the	17
Revised Code;	18

(3) Any action brought pursuant to this chapter.

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(C) "Home improvement" means any repair, alteration, or	20
addition to any residential building, industrialized unit,	21
manufactured home, or mobile home, or to any dwelling unit in any	22
type of structure. "Home improvement" does not include any of the	23
following:	24

(1) Construction of a new residential building,	25
industrialized unit, or manufactured home;	26

(2) Work performed on a structure that contains four or more	27
dwelling units, except for work on an individual dwelling unit	28
within that structure;	29

(3) Work performed on the common area of a condominium	30
property.	31

(D) "Home improvement contractor" means any person who	32
performs or offers to perform any home improvement for	33
compensation.	34

(E) "Industrialized unit," "manufactured home," and	35
"residential building" have the same meanings as in section	36
3781.06 of the Revised Code.	37

(F) "Mobile home" has the meaning as in section 4501.01 of	38
the Revised Code.	39

(G) "Owner" means the person who contracts with a home	40
improvement contractor for a home improvement. "Owner" may include	41
the owner of the property, a tenant who occupies the dwelling unit	42
on which the home improvement is performed, or a person the owner	43
authorizes to act on the owner's behalf to contract for a home	44
improvement, and any other person who contracts for a home	45
improvement.	46

Sec. 4722.02.  (A) No home improvement contractor shall	47
perform any home improvement the cost of which equals or exceeds	48
one thousand dollars unless that person enters into a written	49
contract with the owner. The contract shall include all agreements	50
and conditions related to the home improvement, including all of	51
the following:	52

(1) The home improvement contractor's name, physical business	53
address, business telephone number, taxpayer identification	54
number, and physical home address;	55

(2) The owner's name, address, and telephone number;

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(3) The address of the property where the home improvement is	57
to be performed;	58

(4) A detailed description of the home improvement, including	59
the goods and services to be furnished as part of the home	60
improvement;	61

(5) The date or time period the home improvement is to begin	62
and the date or time period it is to be completed;	63

(6) The total cost of the home improvement;

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(7) Any cost of installation, delivery, or other cost that	65
the total cost does not cover;	66

(8) The dated signatures of the owner and the home	67
improvement contractor;	68

(9) A notice of applicable right to cure provisions in	69
substantially the following language:	70

"RIGHT TO CURE

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IN THE EVENT THAT THE HOME IMPROVEMENT THAT IS THE SUBJECT OF	72
THIS CONTRACT RESULTS IN A CONSTRUCTION DEFECT, THE HOME	73
IMPROVEMENT CONTRACTOR NAMED IN THIS CONTRACT WILL HAVE THE RIGHT	74
TO CURE THE CONSTRUCTION DEFECT IN A MANNER CONSISTENT WITH	75
CHAPTER 4722. OF THE REVISED CODE IF THE CONSTRUCTION DEFECT	76
ARISES FROM A HOME IMPROVEMENT. GENERALLY THE RIGHT TO CURE	77
PROVISIONS PROVIDE THE HOME IMPROVEMENT CONTRACTOR THIRTY (30)	78
DAYS TO CURE ANY CONSTRUCTION DEFECT, BUT SEE THE APPLICABLE	79
SECTIONS OF THE REVISED CODE TO DETERMINE SPECIFIC TIME AND NOTICE	80
REQUIREMENTS."	81

(10) A notice stating whether or not the home improvement	82
contractor has performance bonds or other insurance beyond the	83
insurance required by section 4722.07 of the Revised Code that	84
will cover losses incurred through defects or breach of contract	85
terms by the home improvement contractor.	86

(B)(1) To determine the type of notice an owner requires when	87
the costs of a home improvement exceed the estimate provided in	88
the contract, the contract shall include a statement in	89
substantially the following language:	90

"EXCESS COSTS

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IF AT ANY TIME A HOME IMPROVEMENT REQUIRES EXTRA COSTS ABOVE	92
THE COST SPECIFIED OR ESTIMATED IN THE CONTRACT THAT WERE	93
UNFORESEEN, BUT REASONABLY NECESSARY, AND THE TOTAL OF ALL EXTRA	94
COSTS TO DATE EXCEEDS TEN PER CENT OF THE CONTRACT COST, YOU HAVE	95
A RIGHT TO AN ESTIMATE OF THOSE EXCESS COSTS BEFORE THE HOME	96
IMPROVEMENT CONTRACTOR BEGINS WORK RELATED TO THOSE COSTS. INITIAL	97
YOUR CHOICE OF THE TYPE OF ESTIMATE YOU REQUIRE:	98

..... written estimate ..... oral estimate"	99

(2) If the total amount of unforeseen, but reasonably	100
necessary, excess costs of a home improvement at any time exceeds	101
ten per cent of the cost estimated or specified in the contract,	102
prior to performing the work related to the excess costs, the home	103
improvement contractor shall provide an owner with the type of	104
notice the owner has designated in the contract.	105

(3) If the contract stipulates that the specified cost of the	106
home improvement is a firm price and the home improvement	107
contractor will not charge the owner with any excess costs, the	108
home improvement contractor need not comply with the notice	109
requirements of division (B) of this section.	110

(4) An owner is not liable for any excess costs unless the	111
costs were unforeseen, but reasonably necessary, and unless the	112
home improvement contractor complies with this section's notice	113
requirements.	114

Sec. 4722.03. No home improvement contractor shall do any of	115
the following:	116

(A) Prior to commencing work related to the home improvement,	117
fail to enter into a written contract that complies with this	118
chapter;	119

(B) After entering into a contract with an owner and prior to	120
commencing any work that is related to an excess cost, fail to	121
provide an estimate of the excess costs as this chapter requires;	122

(C) After entering into a contract with an owner, do any of	123
the following:	124

(1) Fail to disclose, prior to the owner's acceptance of any	125
goods or work related to an excess cost, that in failing to	126
approve an excess cost, completion of the work may not be possible	127
and a charge may be imposed for any disassembly, reassembly, or	128
partially completed work, which shall be directly related to the	129
actual labor or parts involved;	130

(2) Charge for any excess cost that the owner has not	131
approved;	132

(3) Represent that repairs or work have been performed when	133
such is not the fact;	134

(4) Fail to provide the owner, upon the owner's request, a	135
written itemized list of repairs performed or services rendered,	136
including a list of parts or materials and a statement of whether	137
they are used, manufactured, or rebuilt, if not new, the cost to	138
the owner, the amount charged for labor, and the identity of the	139
individual performing the repair or service;	140

(5) Fail to tender to the owner any replaced parts, unless	141
the parts are to be rebuilt or sold by the home improvement	142
contractor, or returned to the manufacturer in connection with a	143
warranted repair or service, and the intended reuse or return is	144
made known to the owner prior to commencing any repair or	145
services;	146

(6) Fail to provide a full refund for any goods or services	147
that the home improvement contractor has failed to deliver in	148
accordance with the terms and conditions of the contract required	149
by section 4722.02 of the Revised Code and for which the home	150
improvement contractor has received payment;	151

(7) Fail to provide to the owner, upon the owner's request,	152
a written, itemized receipt for any item of goods that is left	153
with, or turned over to, the home improvement contractor for	154
repair or services. The receipt shall include all of the	155
following:	156

(a) The identity of the person who will perform the repair or	157
services;	158

(b) The name and dated signature of the person or	159
representative who actually accepts the goods;	160

(c) A description, including make and model number or other	161
features that will reasonably identify the goods that are turned	162
over, and the repair or services that are to be performed.	163

(D) Make the performance of any home improvement contingent	164
upon a consumer's waiver of any rights this chapter provides;	165

(E) Represent that repairs, services, or work is necessary	166
when such is not the fact;	167

(F) Represent that an item of goods or any part thereof that	168
is being inspected or diagnosed for a home improvement is in a	169
dangerous condition, or that its continued use may be harmful,	170
when such is not the fact;	171

(G) Materially understate or misstate the estimated cost of	172
the home improvement;	173

(H) Fraudulently misrepresent any aspect of the transaction	174
or the nature or the quality of the work or materials;	175

(I) Fail at the time any owner signs or initials any	176
document to provide the owner with a copy of the document;	177

(J) Fail to disclose to the owner prior to the commencement	178
of any repair or service that any part of the repair or service	179
will be performed by a person other than the home improvement	180
contractor or employee of the home improvement contractor if the	181
contract disclaims any warranty of the repair or service that the	182
other person performs;	183

(K) Represent that repairs or services must be performed	184
away from the property on which the home improvement is being	185
performed when that is not the fact.	186

Sec. 4722.04. (A) A home improvement contractor may take as a	187
down payment not more than ten per cent of the contract price	188
before the home improvement contractor's performance that is	189
required by the contract is completed, except a home improvement	190
contractor may take as a down payment not more than seventy-five	191
per cent of the total cost of any special order item that is	192
otherwise not returnable or usable before the home improvement	193
contractor's performance that is required by the contract is	194
completed.	195

(B) A home improvement contractor shall begin work on the	196
date or within the time period the contract specifies and shall	197
complete the home improvement pursuant to any agreed-upon	198
schedule unless delay is due to reasonable cause beyond the home	199
improvement contractor's control.	200

Sec. 4722.05. The failure of a home improvement contractor to	201
comply with sections 4722.02, 4722.03, and 4722.04 of the Revised	202
Code is an unfair or deceptive act or practice in violation of	203
section 1345.02 of the Revised Code. All powers and remedies	204
available to the attorney general to enforce sections 1345.01 to	205
1345.13 of the Revised Code, except those powers and remedies	206
available under division (E) of section 1345.02 of the Revised	207
Code, are available to the attorney general to enforce sections	208
4722.02, 4722.03, and 4722.04 of the Revised Code. The same	209
remedies available to consumers under section 1345.09 of the	210
Revised Code to remedy violations of section 1345.02 of the	211
Revised Code are available to owners to remedy the failure of a	212
home improvement contractor to comply with sections 4722.02,	213
4722.03, and 4722.04 of the Revised Code.	214

Sec. 4722.06.  (A) No owner shall file a dwelling action or	215
commence an arbitration proceeding against a home improvement	216
contractor unless, at least thirty days before filing the action	217
or commencing the arbitration proceeding, the owner provides the	218
home improvement contractor with a written notice of the	219
construction defect that would be the basis of the dwelling action	220
or arbitration proceeding. The notice shall be in writing and	221
mailed, delivered in person, or sent by any means the home	222
improvement contractor has indicated communications may be sent,	223
including facsimile transmission and electronic mail.	224

(B) After receiving a notice of defect pursuant to division	225
(A) of this section, the home improvement contractor shall provide	226
the owner with a good faith written response. The response shall	227
be delivered to the owner not later than seven days after the home	228
improvement contractor receives the notice described in division	229
(A) of this section. The response shall notify the owner whether	230
the home improvement contractor intends to remedy the construction	231
defect or contest the construction defect. If the home improvement	232
contractor elects to remedy the defect, the home improvement	233
contractor shall have thirty days from the date the home	234
improvement contractor received the notice described in division	235
(A) of this section to complete such remedy. If the home	236
improvement contractor does not remedy the defect within thirty	237
days after the delivery of the notice stating the election to	238
remedy the defect, the owner may file a dwelling action or	239
commence an arbitration proceeding. If the home improvement	240
contractor elects to contest the construction defect, the owner	241
can immediately file a dwelling action or commence an arbitration	242
proceeding.	243

(C) If a home improvement contractor files a mechanics lien	244
or commences any type of arbitration proceedings or legal action	245
against an owner, this section does not apply, and the owner	246
immediately may counterclaim or file a dwelling action or commence	247
an arbitration proceeding against the home improvement contractor.	248

(D) In the event that a home improvement contractor is	249
subject to the provisions of this section and the provisions of	250
Chapter 1312. of the Revised Code, the provisions of this section	251
shall control the actions of the owner and home improvement	252
contractor, and Chapter 1312. of the Revised Code shall not apply.	253

(E) This section does not apply to any dwelling action or	254
arbitration proceeding arising out of a construction defect if	255
that construction defect will jeopardize the welfare, health, or	256
safety of the owner or any other occupant of the residential	257
building or the residential building has been rendered	258
uninhabitable by the construction defect.	259

Sec. 4722.07. A home improvement contractor engaging in any	260
home improvement, the cost of which equals or exceeds one thousand	261
dollars, shall maintain general liability insurance in an amount	262
not less than two hundred fifty thousand dollars.	263

Sec. 4722.08. (A) Any instrumentality, as defined in division	264
(B)(6) of section 2981.01 of the Revised Code, of a home	265
improvement contractor convicted of an offense in connection with	266
a home improvement shall be subject to the forfeiture provisions	267
of Chapter 2981. of the Revised Code.	268

(B) If a home improvement contractor is convicted of a	269
criminal offense in connection with a home improvement, the	270
sentencing court, when sentencing that home improvement	271
contractor, shall consider and specify a plan of restitution to	272
the owner of the property harmed by the offense pursuant to any	273
community control sanctions ordered pursuant to sections 2929.15	274
to 2929.28 of the Revised Code.	275