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General Assembly Raised Bill No. 7268
January Session, 2019
LCO No. 4712
Referred to Committee on INSURANCE AND REAL ESTATE
Introduced by:
(INS)
AN ACT CONCERNING HO ME IMPROVEMENT CONTRACT ORS AND
SALESPERSONS.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. Section 20-419 of the general statutes is repealed and the 1
following is substituted in lieu thereof (Effective October 1, 2019): 2
As used in this chapter and sections 2 and 3 of this act, unless the 3
context otherwise requires: 4
(1) "Business day" has the same meaning as provided in section 42-5
134a. 6
[(1)] (2) "Certificate" means a certificate of registration issued under 7
section 20-422. 8
[(2)] (3) "Commissioner" means the Commissioner of Consumer 9
Protection or any person designated by the commissioner to 10
administer and enforce this chapter. 11
[(3)] (4) "Contractor" means any person who owns and operates a 12 Raised Bill No. 7268
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home improvement business or who undertakes, offers to undertake 13
or agrees to perform any home improvement. "Contractor" does not 14
include a person for whom the total price of all of his home 15
improvement contracts with all of his customers does not exceed one 16
thousand dollars during any period of twelve consecutive months. 17
[(4)] (5) "Home improvement" includes, but is not limited to, the 18
repair, replacement, remodeling, alteration, conversion, 19
modernization, improvement, rehabilitation or sandblasting of, or 20
addition to any land or building or that portion thereof which is used 21
or designed to be used as a private residence, dwelling place or 22
residential rental property, or the construction, replacement, 23
installation or improvement of driveways, swimming pools, porches, 24
garages, roofs, siding, insulation, sunrooms, flooring, patios, 25
landscaping, fences, doors and windows, waterproofing, water, fire or 26
storm restoration or mold remediation in connection with such land or 27
building or that portion thereof which is used or designed to be used 28
as a private residence, dwelling place or residential rental property or 29
the removal or replacement of a residential underground heating oil 30
storage tank system, in which the total price for all work agreed upon 31
between the contractor and owner or proposed or offered by the 32
contractor exceeds two hundred dollars. "Home improvement" does 33
not include: (A) The construction of a new home; (B) the sale of goods 34
by a seller who neither arranges to perform nor performs, directly or 35
indirectly, any work or labor in connection with the installation or 36
application of the goods or materials; (C) the sale of goods or services 37
furnished for commercial or business use or for resale, provided 38
commercial or business use does not include use as residential rental 39
property; (D) the sale of appliances, such as stoves, refrigerators, 40
freezers, room air conditioners and others which are designed for and 41
are easily removable from the premises without material alteration 42
thereof; and (E) any work performed without compensation by the 43
owner on his own private residence or residential rental property. 44
[(5)] (6) "Home improvement contract" means an agreement 45
between a contractor and an owner for the performance of a home 46 Raised Bill No. 7268
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improvement. 47
[(6)] (7) "Owner" means a person who owns or resides in a private 48
residence and includes any agent thereof, including, but not limited to, 49
a condominium association. An owner of a private residence shall not 50
be required to reside in such residence to be deemed an owner under 51
this subdivision. 52
[(7)] (8) "Person" means an individual, partnership, limited liability 53
company or corporation. 54
[(8)] (9) "Private residence" means a single family dwelling, a 55
multifamily dwelling consisting of not more than six units, or a unit, 56
common element or limited common element in a condominium, as 57
defined in section 47-68a, or in a common interest community, as 58
defined in section 47-202, or any number of condominium units for 59
which a condominium association acts as an agent for such unit 60
owners. 61
[(9)] (10) "Salesman" means any individual who (A) negotiates or 62
offers to negotiate a home improvement contract with an owner or (B) 63
solicits or otherwise endeavors to procure by any means whatsoever, 64
directly or indirectly, a home improvement contract from an owner on 65
behalf of a contractor. 66
[(10)] (11) "Residential rental property" means a single family 67
dwelling, a multifamily dwelling consisting of not more than six units, 68
or a unit, common element or limited common element in a 69
condominium, as defined in section 47-68a, or in a common interest 70
community, as defined in section 47-202, which is not owner-occupied. 71
[(11)] (12) "Residential underground heating oil storage tank 72
system" means an underground storage tank system used with or 73
without ancillary components in connection with real property 74
composed of four or less residential units. 75
[(12)] (13) "Underground storage tank system" means an 76 Raised Bill No. 7268
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underground tank or combination of tanks, with any underground 77
pipes or ancillary equipment or containment systems connected to 78
such tank or tanks, used to contain an accumulation of petroleum, 79
which volume is ten per cent or more beneath the surface of the 80
ground. 81
Sec. 2. (NEW) (Effective October 1, 2019) Notwithstanding any 82
provision of the general statutes, no contractor shall: 83
(1) Require, as a precondition to entering into or performing home 84
improvements under a home improvement contract, an owner to 85
deposit with the contractor more than one-half of the total cash price of 86
all work to be performed pursuant to a home improvement contract; 87
(2) Advertise, offer or promise to provide, directly or indirectly, any 88
allowance, compensation, discount, payment or rebate to an owner for 89
any portion of the owner's insurance deductible as an inducement for 90
such owner to enter into a home improvement contract with such 91
contractor; or 92
(3) Induce the sale of any goods or services by advertising, offering 93
or promising to provide, directly or indirectly, to an owner any 94
allowance, bonus, compensation, coupon, credit, discount, fee, gift, 95
payment, prize, referral fee, trade-in or trade-in payment. 96
Sec. 3. (NEW) (Effective October 1, 2019) Each contractor shall notify 97
the commissioner of any change in such contractor's business or trade 98
name, or primary residence or business address, not later than thirty 99
days after the date of such change. 100
Sec. 4. Subsection (a) of section 20-420 of the general statutes is 101
repealed and the following is substituted in lieu thereof (Effective 102
October 1, 2019): 103
(a) (1) No person shall hold himself or herself out to be a contractor 104
or salesperson without first (A) obtaining a certificate of registration 105
from the commissioner as provided in this chapter, except that an 106 Raised Bill No. 7268
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individual or partner, or officer or director of a corporation registered 107
as a contractor shall not be required to obtain a salesperson's 108
certificate, and (B) presenting evidence of (i) bodily injury, property 109
damage liability, public liability and workers' compensation insurance 110
coverage in amounts prescribed by the commissioner in consultation 111
with the Insurance Commissioner, except as provided in subdivision 112
(3) of this subsection, and (ii) any insurance coverage required by 113
federal law. 114
(2) No certificate shall be given to any person who holds himself or 115
herself out to be a contractor that performs radon mitigation unless 116
such contractor provides evidence, satisfactory to the commissioner, 117
that the contractor is certified as a radon mitigator by the National 118
Radon Safety Board or the National Environmental Health 119
Association. 120
(3) No certificate shall be given to any person who holds himself or 121
herself out to be a contractor that performs removal or replacement of 122
any residential underground heating oil storage tank system unless 123
such contractor provides evidence, satisfactory to the commissioner, 124
that the contractor [(1)] (A) has completed a hazardous material 125
training program approved by the Department of Energy and 126
Environmental Protection, and [(2)] (B) has presented evidence of 127
liability insurance coverage of one million dollars. 128
Sec. 5. Subsection (a) of section 20-421 of the general statutes is 129
repealed and the following is substituted in lieu thereof (Effective 130
October 1, 2019): 131
(a) Any person seeking a certificate of registration shall apply to the 132
commissioner in writing, on a form provided by the commissioner. 133
The application shall include: [the] 134
(1) The applicant's name [, residence address, business address, 135
business telephone number] and trade name, if the applicant is a 136
natural person, or business name, if the applicant is not a natural 137
person; 138 Raised Bill No. 7268
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(2) The applicant's principal residence address, if the applicant is a 139
natural person, or principal business address, if the applicant is not a 140
natural person; 141
(3) The applicant's business telephone number, electronic mail 142
address and Internet web site address; 143
(4) The applicant's Social Security number, if the applicant is a 144
natural person, or federal employer identification number, if the 145
applicant is not a natural person; 146
(5) For each affiliate, partner, subsidiary or trustee of the applicant, 147
the name, trade name and principal residence address, or business 148
name and principal business address, of such affiliate, partner, 149
subsidiary or trustee; 150
(6) If the applicant is not a natural person, the name and principal 151
residence address of each director, officer or principal shareholder of 152
such applicant; 153
(7) A statement, signed and sworn to by the applicant, disclosing 154
whether (A) the applicant previously held a certificate of registration 155
and, if the applicant previously held such a certificate, (i) under what 156
name or names such applicant held such certificate, and (ii) whether 157
such certificate was suspended or revoked, and (B) any judgment or 158
arbitration award has been entered against the applicant; 159
(8) Proof that the applicant maintains the insurance coverage 160
required under subsection (a) of section 20-420, as amended by this act; 161
and [such] 162
(9) Such other information as the commissioner may require. 163
Sec. 6. Subsection (a) of section 20-426 of the general statutes is 164
repealed and the following is substituted in lieu thereof (Effective 165
October 1, 2019): 166
(a) (1) The commissioner may revoke, suspend or refuse to issue or 167 Raised Bill No. 7268
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renew any certificate of registration as a home improvement contractor 168
or salesperson or place a registrant on probation or issue a letter of 169
reprimand for: 170
[(1)] (A) Conduct of a character likely to mislead, deceive or defraud 171
the public or the commissioner; [(2) engaging] 172
(B) Engaging in any untruthful or misleading advertising; [(3) 173
failing] 174
(C) Failing to reimburse the guaranty fund established pursuant to 175
section 20-432 for any moneys paid to an owner pursuant to subsection 176
(o) of section 20-432; [(4) unfair] 177
(D) Unfair or deceptive business practices; [or (5) violation] 178
(E) Violation of any of the provisions of the general statutes relating 179
to home improvements or any regulation adopted pursuant to any of 180
such provisions; [.] 181
(F) Gross malpractice or incompetence, as determined by the 182
commissioner; 183
(G) Failing to maintain insurance coverage required under 184
subsection (a) of section 20-420, as amended by this act; or 185
(H) Failing to pay any fees or taxes due and owing to this state. 186
(2) The commissioner may refuse to issue or renew any certificate of 187
registration as a home improvement contractor or salesperson of any 188
person subject to the registration requirements of chapter 969. 189
Sec. 7. Section 20-429 of the general statutes is repealed and the 190
following is substituted in lieu thereof (Effective October 1, 2019, and 191
applicable to home improvement contracts entered into, amended or renewed 192
on or after said date): 193
(a) (1) (A) No home improvement contract shall be valid or 194
enforceable against an owner unless it: 195 Raised Bill No. 7268
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(i) Is in writing; [,] 196
(ii) [is] Is signed by the owner and the contractor; [,] 197
(iii) [contains] Contains the entire agreement between the owner 198
and the contractor; [, (iv) contains] 199
(iv) Contains an itemized list and description of all home 200
improvements to be performed pursuant to the contract; 201
(v) Contains the cash price of each home improvement to be 202
performed pursuant to the contract; 203
(vi) Contains a reasonable estimate by the contractor of the total 204
cash price of all home improvements to be performed pursuant to the 205
contract; 206
(vii) Contains the date of the transaction; [, (v) contains the name 207
and address of the contractor and the contractor's registration number, 208
(vi) contains] 209
(viii) Contains the contractor's full legal name, business and trade 210
names, principal residence or business address, business telephone 211
number, business electronic mail address and registration number; 212
(ix) Contains the information required by subparagraph (A)(viii) of 213
this subdivision for each person who will perform any home 214
improvements described in the contract in such person's capacity as a 215
day laborer, independent contractor or subcontractor; 216
(x) Contains a notice of the owner's cancellation rights in accordance 217
with the provisions of chapter 740; [, (vii) contains] 218
(xi) Contains a notice of the owner's cancellation rights in 219
accordance with subparagraph (B) of this subdivision; 220
(xii) Contains not fewer than two cancellation forms in accordance 221
with subparagraph (B) of this subdivision; 222 Raised Bill No. 7268
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(xiii) Contains a starting date and completion date; [, (viii) is] 223
(xiv) Is entered into by a registered salesman or registered 224
contractor; [, and (ix) includes] 225
(xv) Includes a provision disclosing each corporation, limited 226
liability company, partnership, sole proprietorship or other legal 227
entity, which is or has been a home improvement contractor pursuant 228
to the provisions of this chapter or a new home construction contractor 229
pursuant to the provisions of chapter 399a, in which the owner or 230
owners of the home improvement contractor are or have been a 231
shareholder, member, partner, or owner during the previous five 232
years; 233
(xvi) Includes a provision disclosing that the contractor maintains 234
the insurance coverage required under subsection (a) of section 20-420, 235
as amended by this act, the name of each insurer that issued such 236
coverage to the contractor and the coverage limits under each policy 237
providing such coverage; and 238
(xvii) Includes a provision allowing the owner, at the owner's 239
discretion, to make payments to the contractor pursuant to the contract 240
by cash, check or credit card. 241
(B) (i) Each contract shall provide the owner with a right to cancel 242
such contract and include a statement, in substantially the following 243
form, in not less than ten-point, boldface type located immediately 244
above the place provided in such contract for the owner's signature: 245
"You may cancel this contract not later than midnight on the third 246
business day after both you and the contractor signed this contract or 247
you received notice from your insurer denying any part of your claim 248
for the cost of the home improvements to be performed pursuant to 249
this contract, whichever last occurs. Please see the attached notice of 250
cancellation forms for additional information." 251
(ii) Each contract shall contain not fewer than two cancellation 252 Raised Bill No. 7268
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forms, in substantially the following form and in not less than ten-253
point, boldface type, attached to, and easily detachable from, such 254
contract: 255
NOTICE OF CANCELLATION 256
You may cancel this contract not later than midnight on the third 257
business day after both you and the contractor sign this contract or you 258
receive notice from your insurer denying any part of your claim for the 259
cost of the home improvements to be performed pursuant to this 260
contract, whichever last occurs. In order to cancel this contract, you 261
must sign, date and deliver, mail or electronically mail this notice to 262
(insert name of contractor) at (insert principal business address and 263
business electronic mail address of contractor) by the end of the three-264
day period described in this notice. If you cancel this contract, the 265
contractor shall return all payments that you have made to the 266
contractor pursuant to this contract, less the reasonable cost of any and 267
all home improvements that the contractor performed pursuant to this 268
contract prior to cancellation, and cancel the contractor's security 269
interest, if any, in any home improvements performed prior to 270
cancellation not later than ten business days after the contractor 271
receives this notice. You should retain a copy of this notice for your 272
records. 273
I HEREBY CANCEL THIS TRANSACTION: 274
Signature 275
(Insert date) 276
[(B)] (C) Each change in the terms and conditions of a contract shall 277
be in writing and shall be signed by the owner and contractor, except 278
that the commissioner may, by regulation, dispense with the necessity 279
for complying with the requirement that each change in a home 280
improvement contract shall be in writing and signed by the owner and 281
contractor. 282 Raised Bill No. 7268
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(2) A contract for repair, remediation or mitigation as set forth in 283
section 38a-313a shall conform to the requirements set forth in 284
subparagraph (A) of subdivision (1) of this subsection and section 38a-285
313a. 286
(b) No home improvement contract shall be valid if it includes any 287
provision obligating the owner to instruct the home improvement 288
contractor, by a date determined by such contractor, that periodic 289
home improvements are not to be performed unless it also includes a 290
provision requiring the contractor to remind the owner of that 291
obligation by means of a card or letter mailed to the owner and 292
postmarked not earlier than twenty days, and not later than ten days, 293
prior to such date. 294
(c) The contractor shall provide and deliver to the owner, without 295
charge, a completed copy of the home improvement contract at the 296
time such contract is executed. 297
(d) The commissioner may, by regulation, require the inclusion of 298
additional contractual provisions. 299
(e) Each home improvement contract entered into shall be 300
considered a home solicitation sale pursuant to chapter 740 and shall 301
be subject to the requirements of said chapter regardless of the location 302
of the transaction or of the signing of the contract. Each home 303
improvement contract in which the owner agrees to repay the 304
contractor an amount loaned or advanced to the owner by the 305
contractor for the purposes of paying for the goods and services 306
provided in such contract, or which contains a finance charge, (1) shall 307
set forth the information required to be disclosed pursuant to the 308
Truth-in-Lending Act, sections 36a-675 to 36a-685, inclusive, (2) shall 309
allow the owner to pay off in advance the full amount due and obtain 310
a partial refund of any unearned finance charge, and (3) may contain a 311
finance charge set at a rate of not more than the rate allowed for loans 312
pursuant to section 37-4. As used in this subsection, "finance charge" 313
means the amount in excess of the cash price for goods and services 314 Raised Bill No. 7268
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under the home improvement contract to be paid by the owner for the 315
privilege of paying the contract price in installments over a period of 316
time. 317
(f) Nothing in this section shall preclude a contractor who has 318
complied with subparagraphs (A)(i), (ii), [(vi)] (x), [(vii)] (xiii) and 319
[(viii)] (xiv) of subdivision (1) of subsection (a) of this section from the 320
recovery of payment for work performed based on the reasonable 321
value of services which were requested by the owner, provided the 322
court determines that it would be inequitable to deny such recovery. 323
This act shall take effect as follows and shall amend the following
sections:
Section 1 October 1, 2019 20-419
Sec. 2 October 1, 2019 New section
Sec. 3 October 1, 2019 New section
Sec. 4 October 1, 2019 20-420(a)
Sec. 5 October 1, 2019 20-421(a)
Sec. 6 October 1, 2019 20-426(a)
Sec. 7 October 1, 2019, and
applicable to home
improvement contracts
entered into, amended or
renewed on or after said
date
20-429
Statement of Purpose:
To: (1) Modify both the permissible and required terms of home
improvement contracts; (2) preclude home improvement contractors
from engaging in certain conduct to induce owners to enter into home
improvement contracts; (3) require home improvement contractors to
notify the commissioner regarding changes in their business names,
trade names and addresses; (4) require home improvement contractors
to maintain insurance coverage; (5) expand the required content of the
application for a certificate of registration as a home improvement
contractor; and (6) modify the grounds on which the Commissioner of
Consumer Protection may (A) reprimand or place a home
improvement contractor or salesperson on probation, or (B) revoke, Raised Bill No. 7268
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suspend, or refuse to issue or renew a certificate of registration as a
home improvement contractor or salesperson.
[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline,
except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is
not underlined.]