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General Assembly Raised Bill No. 5376
February Session, 2024
LCO No. 1882
Referred to Committee on INSURANCE AND REAL ESTATE
Introduced by:
(INS)
AN ACT CONCERNING HOME IMPROVEMENT CONTRACTORS AND
SALESPERSONS.
Be it enacted by the Senate and House of Representatives in General
Assembly convened:
Section 1. Section 20-419 of the 2024 supplement to the general 1
statutes is repealed and the following is substituted in lieu thereof 2
(Effective October 1, 2024): 3
As used in this chapter and section 2 of this act, unless the context 4
otherwise requires: 5
(1) "Business day" has the same meaning as provided in section 42-6
134a. 7
[(1)] (2) "Business entity" means an association, corporation, limited 8
liability company, limited liability partnership or partnership. 9
[(2)] (3) "Certificate" means a certificate of registration issued under 10
section 20-422. 11
[(3)] (4) "Commissioner" means (A) the Commissioner of Consumer 12
Protection, and (B) any person designated by the commissioner to 13 Raised Bill No. 5376
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administer and enforce this chapter. 14
[(4)] (5) (A) "Contractor" means any person who (i) owns and operates 15
a home improvement business, or (ii) undertakes, offers to undertake or 16
agrees to perform any home improvement. 17
(B) "Contractor" does not include a person for whom the total price 18
of all of such person's home improvement contracts with all of such 19
person's customers does not exceed one thousand dollars during any 20
period of twelve consecutive months. 21
[(5)] (6) (A) "Home improvement" includes, but is not limited to, the 22
repair, replacement, remodeling, alteration, conversion, modernization, 23
improvement, rehabilitation or sandblasting of, or addition to, any land 24
or building or that portion thereof which is used or designed to be used 25
as a private residence, dwelling place or residential rental property, or 26
the construction, replacement, installation or improvement of alarm 27
systems not requiring electrical work, as defined in section 20-330, 28
driveways, swimming pools, porches, garages, roofs, siding, insulation, 29
sunrooms, flooring, patios, landscaping, fences, doors and windows, 30
waterproofing, water, fire or storm restoration or mold remediation in 31
connection with such land or building or that portion thereof which is 32
used or designed to be used as a private residence, dwelling place or 33
residential rental property or the removal or replacement of a residential 34
underground heating oil storage tank system, in which the total price 35
for all work agreed upon between the contractor and owner or proposed 36
or offered by the contractor exceeds two hundred dollars. 37
(B) "Home improvement" does not include (i) the construction of a 38
new home, (ii) the sale of goods or materials by a seller who neither 39
arranges to perform nor performs, directly or indirectly, any work or 40
labor in connection with the installation or application of the goods or 41
materials, (iii) the sale of goods or services furnished for commercial or 42
business use or for resale, provided commercial or business use does not 43
include use as residential rental property, (iv) the sale of appliances, 44
such as stoves, refrigerators, freezers, room air conditioners and others, 45 Raised Bill No. 5376
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which are designed for and are easily removable from the premises 46
without material alteration thereof, (v) tree or shrub cutting or the 47
grinding of tree stumps, and (vi) any work performed without 48
compensation by the owner on such owner's own private residence or 49
residential rental property. 50
[(6)] (7) "Home improvement contract" means an agreement between 51
a contractor and an owner for the performance of a home improvement. 52
[(7)] (8) "Owner" means a person who owns or resides in a private 53
residence and includes any agent thereof, including, but not limited to, 54
a condominium association. An owner of a private residence shall not 55
be required to reside in such residence to be deemed an owner under 56
this subdivision. 57
[(8)] (9) "Person" means an individual or a business entity. 58
[(9)] (10) "Private residence" means a single family dwelling, a 59
multifamily dwelling consisting of not more than six units, or a unit, 60
common element or limited common element in a condominium, as 61
defined in section 47-68a, or in a common interest community, as 62
defined in section 47-202, or any number of condominium units for 63
which a condominium association acts as an agent for such unit owners. 64
[(10)] (11) "Salesman" means any individual who (A) negotiates or 65
offers to negotiate a home improvement contract with an owner, or (B) 66
solicits or otherwise endeavors to procure by any means whatsoever, 67
directly or indirectly, a home improvement contract from an owner on 68
behalf of a contractor. 69
[(11)] (12) "Residential rental property" means a single family 70
dwelling, a multifamily dwelling consisting of not more than six units, 71
or a unit, common element or limited common element in a 72
condominium, as defined in section 47-68a, or in a common interest 73
community, as defined in section 47-202, which is not owner-occupied. 74
[(12)] (13) "Residential underground heating oil storage tank system" 75 Raised Bill No. 5376
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means an underground storage tank system used with or without 76
ancillary components in connection with real property composed of 77
four or less residential units. 78
[(13)] (14) "Underground storage tank system" means an 79
underground tank or combination of tanks, with any underground 80
pipes or ancillary equipment or containment systems connected to such 81
tank or tanks, used to contain an accumulation of petroleum, which 82
volume is ten per cent or more beneath the surface of the ground. 83
Sec. 2. (NEW) (Effective October 1, 2024) Notwithstanding any 84
provision of chapter 400 of the general statutes, no contractor shall: 85
(1) Require, as a precondition to entering into or performing home 86
improvements under a home improvement contract, an owner to 87
deposit with the contractor more than one-half of the total cash price of 88
all work to be performed pursuant to a home improvement contract; 89
(2) Advertise, offer or promise to provide, directly or indirectly, any 90
allowance, compensation, discount, payment or rebate to an owner for 91
any portion of the owner's insurance deductible as an inducement for 92
such owner to enter into a home improvement contract with such 93
contractor; or 94
(3) Induce the sale of any goods or services by advertising, offering 95
or promising to provide, directly or indirectly, to an owner any 96
allowance, bonus, compensation, coupon, credit, discount, fee, gift, 97
payment, prize, referral fee, trade-in or trade-in payment. 98
Sec. 3. Section 20-420 of the 2024 supplement to the general statutes 99
is repealed and the following is substituted in lieu thereof (Effective 100
October 1, 2024): 101
(a) (1) No person shall hold such person out to be a contractor or 102
salesperson without first (A) obtaining a certificate of registration from 103
the commissioner as provided in this chapter, except [(1)] (i) that an 104
individual or partner, or officer or director of a corporation registered 105 Raised Bill No. 5376
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as a contractor shall not be required to obtain a salesperson's certificate, 106
and [(2)] (ii) as provided in subsections (e) and (f) of this section, and (B) 107
presenting evidence of (i) bodily injury, general liability, property 108
damage liability, public liability and workers' compensation insurance 109
coverage in amounts prescribed by the commissioner, in consultation 110
with the Insurance Commissioner, except as provided in subdivision (3) 111
of this subsection, and (ii) any insurance coverage required by federal 112
law. 113
(2) No certificate shall be given to any person who holds such person 114
out to be a contractor that performs radon mitigation unless such 115
contractor provides evidence, satisfactory to the commissioner, that the 116
contractor is certified as a radon mitigator by the National Radon Safety 117
Board or the National Environmental Health Association. 118
(3) No certificate shall be given to any person who holds such person 119
out to be a contractor that performs removal or replacement of any 120
residential underground heating oil storage tank system unless such 121
contractor provides evidence, satisfactory to the commissioner, that the 122
contractor (A) has completed a hazardous material training program 123
approved by the Department of Energy and Environmental Protection, 124
and (B) has presented evidence of liability insurance coverage of one 125
million dollars. 126
(b) No contractor shall employ any salesman to procure business 127
from an owner unless the salesman is registered under this chapter. 128
(c) No individual shall act as a home improvement salesman for an 129
unregistered contractor. 130
(d) On and after July 1, 2008, a home improvement contractor shall 131
not perform gas hearth product work, as defined in subdivision (22) of 132
section 20-330, unless such home improvement contractor holds a 133
limited contractor or journeyman gas hearth installer license pursuant 134
to section 20-334f. 135
(e) A retail establishment, which is a business that operates from a 136 Raised Bill No. 5376
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fixed location where goods or services are offered for sale, may apply 137
annually for a certificate of registration as a salesperson on behalf of its 138
employees if it employs or otherwise compensates one or more 139
salespersons whose solicitation, negotiation and completion of sales are 140
conducted entirely at the retail establishment or virtually or by phone. 141
The retail establishment shall (1) apply for such registration on a form 142
prescribed by the commissioner, (2) maintain a list of all salespersons 143
intended to be covered by the retailer's certificate of registration, and (3) 144
pay a fee equal to the amount that would be due if each person were to 145
apply individually for a certificate of registration, including the amount 146
that would be due under the guaranty fund. The list of salespersons 147
covered by the retailer's certificate of registration shall be made 148
available to the department upon request. If any person covered by the 149
retail establishment's salesperson certificate of registration conducts 150
activity covered by the salesperson credential at a place other than the 151
retail establishment or virtually or by phone, such person shall apply for 152
an individual salesperson certificate of registration using the form 153
prescribed by the commissioner for such registrations and shall pay the 154
corresponding application fee. 155
(f) Certificates of registration for salespersons issued to retail 156
establishments shall not be transferable or assignable, except a retail 157
establishment that is a holder of a salesperson certificate may remove an 158
existing or former employee currently listed on the certification of 159
registration and replace such person with a new or existing employee 160
employed as a salesperson. If the retail establishment adds or removes 161
salespeople, there shall be no refund or supplemental payment. The fee 162
shall be based on the number of salespeople at the time of each renewal. 163
(g) A contractor or salesperson shall update, through the 164
department's online licensing system, any application information the 165
contractor or salesperson has provided to the department pursuant to 166
this section, including, but not limited to, any contact information, 167
including, but not limited to, a change in business or trade name, or 168
residence address or business address for such contractor or 169
salesperson, insurance information or criminal history for such 170 Raised Bill No. 5376
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contractor or salesperson, or, if such contractor is a business entity, 171
criminal histories of the individual owners of such business entity, not 172
later than thirty days after any change in such information. 173
Sec. 4. Subsection (a) of section 20-421 of the 2024 supplement to the 174
general statutes is repealed and the following is substituted in lieu 175
thereof (Effective October 1, 2024): 176
(a) Any person seeking a certificate of registration shall apply to the 177
commissioner online, on a form provided by the commissioner. The 178
application shall include: 179
(1) [the] The applicant's name [, residence address, business address, 180
business telephone number and electronic mail address,] and trade 181
name, if the applicant is a natural person, or business name, if the 182
applicant is not a natural person; 183
(2) The applicant's residence address, if the applicant is a natural 184
person, or business address, if the applicant is not a natural person; 185
(3) The applicant's business telephone number, electronic mail 186
address and Internet web site address; 187
(4) The applicant's Social Security number, if the applicant is a natural 188
person, or federal employer identification number, if the applicant is not 189
a natural person; 190
(5) For each affiliate, partner, subsidiary or trustee of the applicant, 191
the name, trade name and residence address, or business name and 192
business address, of such affiliate, partner, subsidiary or trustee of the 193
applicant; 194
(6) If the applicant is not a natural person, the name and residence 195
address of each director, officer or principal shareholder of such 196
applicant; 197
(7) A statement, signed and sworn to by the applicant, disclosing 198
whether (A) the applicant previously held a certificate of registration 199 Raised Bill No. 5376
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and, if the applicant previously held such a certificate, (i) the name by 200
which such applicant held such certificate, and (ii) whether such 201
certificate was suspended or revoked, and (B) any judgment or 202
arbitration award has been entered against the applicant; 203
[(2) a] (8) A statement by the applicant disclosing whether the 204
applicant has been found guilty or convicted as a result of an act which 205
(A) constitutes a felony under the laws of this state or federal law, or (B) 206
was committed in another jurisdiction but, if committed in this state, 207
would constitute a felony under the laws of this state; [,] 208
[(3) proof] (9) Proof that the applicant has obtained (A) general 209
liability insurance coverage in an amount not less than twenty thousand 210
dollars, demonstrated by providing the policy number and business 211
name of the insurance provider, (B) bodily injury liability, property 212
damage liability, public liability and workers' compensation insurance 213
coverage in amounts prescribed by the commissioner, in consultation 214
with the Insurance Commissioner, and (C) any insurance coverage 215
required by federal law; and 216
[(4) such] (10) Such other information as the commissioner may 217
require. 218
Sec. 5. Subsection (a) of section 20-426 of the 2024 supplement to the 219
general statutes is repealed and the following is substituted in lieu 220
thereof (Effective October 1, 2024): 221
(a) The commissioner may revoke, suspend or refuse to issue or 222
renew any certificate of registration as a home improvement contractor 223
or salesperson or place a registrant on probation or issue a letter of 224
reprimand (1) for conduct of a character likely to mislead, deceive or 225
defraud the public or the commissioner, (2) for engaging in any 226
untruthful or misleading advertising, (3) for failing to reimburse the 227
guaranty fund established pursuant to section 20-432 for any moneys 228
paid to an owner pursuant to subsection (o) of section 20-432, (4) for 229
unfair or deceptive business practices, (5) subject to section 46a-80, 230
based on a felony conviction of an individual registrant or an individual 231 Raised Bill No. 5376
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owner of a registrant that is a business entity, [; or] (6) for violation of 232
any of the provisions of the general statutes relating to home 233
improvements or any regulation adopted pursuant to any of such 234
provisions, (7) for gross malpractice or incompetence, as determined by 235
the commissioner in accordance with the provisions of chapter 54, (8) 236
for failing to maintain insurance coverage required under subsection (a) 237
of section 20-420, as amended by this act, or (9) for failing to pay any 238
taxes or fees due and owing to the state. The commissioner may refuse 239
to issue or renew any certificate of registration as a home improvement 240
contractor or salesperson of any person subject to the registration 241
requirements of chapter 969. 242
Sec. 6. Section 20-429 of the general statutes is repealed and the 243
following is substituted in lieu thereof (Effective October 1, 2024): 244
(a) (1) (A) No home improvement contract shall be valid or 245
enforceable against an owner unless it: (i) Is in writing, (ii) is signed by 246
the owner and the contractor, (iii) contains the entire agreement 247
between the owner and the contractor, (iv) contains an itemized list and 248
description of all home improvements to be performed pursuant to the 249
contract, (v) contains the cash price of each home improvement to be 250
performed pursuant to the contract, (vi) contains a reasonable estimate 251
by the contractor of the total cash price of all home improvements to be 252
performed pursuant to the contract, [(iv)] (vii) contains the date of the 253
transaction, [(v) contains the name and address of the contractor and the 254
contractor's registration number, (vi)] (viii) contains the contractor's full 255
legal name, business and trade names, residence or business address, 256
business telephone number, business electronic mail address and 257
registration number, (ix) contains the information required by 258
subparagraph (A)(viii) of this subdivision for each person who will 259
perform any home improvements described in the contract in such 260
person's capacity as a day laborer, independent contractor or 261
subcontractor, (x) contains a notice of the owner's cancellation rights in 262
accordance with the provisions of chapter 740, (xi) contains a notice of 263
the owner's cancellation rights in accordance with subparagraph (B) of 264
this subdivision, (xii) contains not fewer than two cancellation forms in 265 Raised Bill No. 5376
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accordance with subparagraph (B) of this subdivision, [(vii)] (xiii) 266
contains a starting date and completion date, [(viii)] (xiv) is entered into 267
by a registered salesman or registered contractor, [and (ix)] (xv) includes 268
a provision disclosing each corporation, limited liability company, 269
partnership, sole proprietorship or other legal entity, which is or has 270
been a home improvement contractor pursuant to the provisions of this 271
chapter or a new home construction contractor pursuant to the 272
provisions of chapter 399a, in which the owner or owners of the home 273
improvement contractor are or have been a shareholder, member, 274
partner, or owner during the previous five years, (xvi) includes a 275
provision disclosing that the contractor maintains the insurance 276
coverage required under subsection (a) of section 20-420, as amended 277
by this act, the name of each insurer that issued such coverage to the 278
contractor and the coverage limits under each policy providing such 279
coverage, and (xvii) includes a provision allowing the owner, at the 280
owner's discretion, to make payments to the contractor pursuant to the 281
contract by cash, check or credit card. 282
(B) (i) Each contract shall provide the owner with a right to cancel 283
such contract and include a statement, in substantially the following 284
form, in not less than ten-point, boldface type located immediately 285
above the place provided in such contract for the owner's signature: 286
"You may cancel this contract not later than midnight on the third 287
business day after both you and the contractor signed this contract or 288
you received notice from your insurer denying any part of your claim 289
for the cost of the home improvements to be performed pursuant to this 290
contract, whichever last occurs. Please see the attached notice of 291
cancellation forms for additional information." 292
(ii) Each contract shall contain not fewer than two cancellation forms, 293
in substantially the following form and in not less than ten-point, 294
boldface type, attached to, and easily detachable from, such contract: 295
"NOTICE OF CANCELLATION 296
You may cancel this contract not later than midnight on the third 297 Raised Bill No. 5376
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business day after both you and the contractor sign this contract or you 298
receive notice from your insurer denying any part of your claim for the 299
cost of the home improvements to be performed pursuant to this 300
contract, whichever last occurs. In order to cancel this contract, you 301
must sign, date and deliver, mail or electronically mail this notice to 302
(insert name of contractor) at (insert principal business address and 303
business electronic mail address of contractor) by the end of the three-304
day period described in this notice. If you cancel this contract, the 305
contractor shall return all payments that you have made to the 306
contractor pursuant to this contract, less the reasonable cost of any and 307
all home improvements that the contractor performed pursuant to this 308
contract prior to cancellation, and cancel the contractor's security 309
interest, if any, in any home improvements performed prior to 310
cancellation not later than ten business days after the contractor receives 311
this notice. You should retain a copy of this notice for your records. 312
I HEREBY CANCEL THIS TRANSACTION: 313
Signature 314
(Insert date)" 315
[(B)] (C) Each change in the terms and conditions of a contract shall 316
be in writing and shall be signed by the owner and contractor, except 317
that the commissioner may, by regulation, dispense with the necessity 318
for complying with the requirement that each change in a home 319
improvement contract shall be in writing and signed by the owner and 320
contractor. 321
(2) A contract for repair, remediation or mitigation as set forth in 322
section 38a-313a shall conform to the requirements set forth in 323
subparagraph (A) of subdivision (1) of this subsection and section 38a-324
313a. 325
(b) No home improvement contract shall be valid if it includes any 326
provision obligating the owner to instruct the home improvement 327
contractor, by a date determined by such contractor, that periodic home 328 Raised Bill No. 5376
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improvements are not to be performed unless it also includes a 329
provision requiring the contractor to remind the owner of that 330
obligation by means of a card or letter mailed to the owner and 331
postmarked not earlier than twenty days, and not later than ten days, 332
prior to such date. 333
(c) The contractor shall provide and deliver to the owner, without 334
charge, a completed copy of the home improvement contract at the time 335
such contract is executed. 336
(d) The commissioner may, by regulation, require the inclusion of 337
additional contractual provisions. 338
(e) Each home improvement contract entered into shall be considered 339
a home solicitation sale pursuant to chapter 740 and shall be subject to 340
the requirements of said chapter regardless of the location of the 341
transaction or of the signing of the contract. Each home improvement 342
contract in which the owner agrees to repay the contractor an amount 343
loaned or advanced to the owner by the contractor for the purposes of 344
paying for the goods and services provided in such contract, or which 345
contains a finance charge, (1) shall set forth the information required to 346
be disclosed pursuant to the Truth-in-Lending Act, sections 36a-675 to 347
36a-685, inclusive, (2) shall allow the owner to pay off in advance the 348
full amount due and obtain a partial refund of any unearned finance 349
charge, and (3) may contain a finance charge set at a rate of not more 350
than the rate allowed for loans pursuant to section 37-4. As used in this 351
subsection, "finance charge" means the amount in excess of the cash 352
price for goods and services under the home improvement contract to 353
be paid by the owner for the privilege of paying the contract price in 354
installments over a period of time. 355
(f) Nothing in this section shall preclude a contractor who has 356
complied with subparagraphs (A)(i), (ii), [(vi)] (x), [(vii)] (xiii) and [(viii)] 357
(xiv) of subdivision (1) of subsection (a) of this section from the recovery 358
of payment for work performed based on the reasonable value of 359
services which were requested by the owner, provided the court 360 Raised Bill No. 5376
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determines that it would be inequitable to deny such recovery. 361
This act shall take effect as follows and shall amend the following
sections:
Section 1 October 1, 2024 20-419
Sec. 2 October 1, 2024 New section
Sec. 3 October 1, 2024 20-420
Sec. 4 October 1, 2024 20-421(a)
Sec. 5 October 1, 2024 20-426(a)
Sec. 6 October 1, 2024 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 additional types of 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, 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.]