SPONSOR: Rep. Morrison & Sen. Huxtable Reps. Cooke, Lambert, Romer, Phillips, Burns, Snyder-Hall, D. Short; Sens. Sokola, Hansen, Lockman, Townsend, Hoffner, Wilson HOUSE OF REPRESENTATIVES 153rd GENERAL ASSEMBLY HOUSE BILL NO. 57 AN ACT TO AMEND TITLES 6 AND 11 OF THE DELAWARE CODE RELATING TO HOME CONSTRUCTION CONTRACTS.
SPONSOR: Rep. Morrison & Sen. Huxtable Reps. Cooke, Lambert, Romer, Phillips, Burns, Snyder-Hall, D. Short; Sens. Sokola, Hansen, Lockman, Townsend, Hoffner, Wilson
SPONSOR: Rep. Morrison & Sen. Huxtable
Reps. Cooke, Lambert, Romer, Phillips, Burns, Snyder-Hall, D. Short; Sens. Sokola, Hansen, Lockman, Townsend, Hoffner, Wilson
SPONSOR:
Rep. Morrison & Sen. Huxtable
Reps. Cooke, Lambert, Romer, Phillips, Burns, Snyder-Hall, D. Short; Sens. Sokola, Hansen, Lockman, Townsend, Hoffner, Wilson
HOUSE OF REPRESENTATIVES
153rd GENERAL ASSEMBLY
HOUSE BILL NO. 57
AN ACT TO AMEND TITLES 6 AND 11 OF THE DELAWARE CODE RELATING TO HOME CONSTRUCTION CONTRACTS.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE: Section 1. Amend Chapter 36, Title 6 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows: Subchapter IV. Home Improvement Protections 3684. Definitions. As used in this subchapter: (1) Buyer means a person who purchases home improvement services or merchandise from a home improvement contractor. (2) Contractor means any person, firm, partnership, joint venture, limited liability company, or other company, or an officer, representative, agent, or employee of a person, firm, partnership, joint venture, limited liability company, or other company, engaged in the trade or commerce of home improvement. (3) Home means a house, dwelling, condominium, townhouse, apartment, or such other residential building or dwelling in which a person resides. (4) Home improvement means as defined in 916 of Title 11. (5) Home improvement contract means as defined in 916 of Title 11. 3685. Home improvement contracts. (a) All home improvement contracts must be in writing. (b) Any buyer entering into home improvement contracts where the buyer is to pay more than $500 has a right to cancel a home improvement contract at any time prior to midnight of the third business day after the home improvement contract is signed. A buyer who is 62 years of age or older, or an adult who is impaired as defined in 3902 of Title 31, or a person with a disability as defined in 3901(a)(2) of Title 12, has the right to cancel a home improvement contract at any time prior to midnight of the fifth business day after the home improvement contract is signed. (1) All contracts must contain in 12-point, bold-faced type the following information and statement: YOU, THE BUYER, MAY CANCEL THIS TRANSACTION AT ANY TIME PRIOR TO MIDNIGHT OF THE THIRD BUSINESS DAY AFTER THE DATE OF THIS TRANSACTION. SEE THE ATTACHED NOTICE OF CANCELLATION FORM FOR AN EXPLANATION OF THIS RIGHT. IF YOU ARE 62 YEARS OF AGE OR OLDER OR A PERSON WITH A DISABILITY, YOU MAY CANCEL THIS TRANSACTION AT ANY TIME PRIOR TO MIDNIGHT OF THE FIFTH BUSINESS DAY AFTER THE DATE OF THIS TRANSACTION. (2) All contracts must append a form captioned Notice of Cancellation, which must be attached to the home improvement contract or receipt and be easily detachable, and must contain in 12-point, bold-face type a cancellation notice with the name of the contractor, the address of the contractors place of business, the date of the transaction, and the date by which the buyer may give the Notice of Cancellation. (3) A contractor must return all deposits and other money paid to the contractor within 10 days of receiving a Notice of Cancellation from the buyer. (c) Any buyer has the right to waive the cancellation period described in subsection (b). A waiver of the cancellation is invalid unless all of the following are true: (1) The waiver is in writing and is a separate document from the contract. (2) The waiver is signed by the buyer and the contractor. (3) The waiver includes the date the contractor will begin work under the contract. (4) The waiver includes the following language in 10-point, bold-faced type: I, THE BUYER, HEREBY WAIVE THE STATUTORILY PROVIDED CANCELLATION PERIOD FOR HOME IMPROVEMENT CONTRACTS. I REQUESTED THIS WAIVER BECAUSE I WANT THE CONTRACTOR TO BEGIN WORK ON THE DATE INDICATED IN THIS WAIVER, AND THIS DATE IS WITHIN THE CANCELLATION PERIOD. I REQUESTED THIS WAIVER IN RELIANCE ON THE CONTRACTORS EXPRESS REPRESENTATION THAT WORK WILL BEGIN ON THE DATE STATED IN THIS WAIVER. (d) A deposit for a home improvement contract may not exceed 10% of the contract price unless the contractor requires amounts in excess of 10% to purchase materials or professional services without which the contractor cannot reasonably begin the project, in which case the deposit is limited to 33% of the cost of the materials and professional services needed to commence the contracted work. (e) If payments, other than a deposit, are to be made before the project is completed, the details of these payments must be included in a payment schedule in the home improvement contract, which schedule must set forth the amount of work, materials, or services that are to be performed for each such payment. Any changes to such schedule must be reflected in an amendment to the home improvement contract. (f) A contractor must apply for all permits necessary to do the work contemplated by a home improvement contract, if any, by the following dates: (1) Thirty days after 50% of any deposit due under the home improvement contract is paid. (2) If no deposit is due, then within 30 days after the home improvement contract is signed or by a mutually agreed upon date set forth in the home improvement contract. (g) A contractor must start the work contemplated by a home improvement contract by the date set forth in such home improvement contract unless any of the following applies: (1) The home improvement is delayed by events beyond the contractors control and the contractor has notified the buyer in writing of the delay, the specific reason for the delay, and a new start date that will replace the date set forth in the contract. (2) The buyer has agreed in writing to a later date. (h) If the contractor cannot start the work by the date set forth in the home improvement contract and no condition set forth in subsection (g) of this section applies, the buyer is entitled to terminate the home improvement contract and obtain a refund of all payments made under the contract. (i) A contractor may not do the following: (1) Include in a home improvement contract any confession of judgment or any waiver of any of the rights to which the buyer is entitled under this subchapter. (2) Negotiate, transfer, sell, or assign any note or other evidence of indebtedness to a finance company or other third party prior to midnight of the fifth business day following the day the home improvement contract was signed. 3686. Enforcement. (a) Any violation of 3685 of this subchapter is an unlawful practice under 2513 of this title and a violation of subchapter II of Chapter 25 of this title. (b) The remedies and penalties provided for in this section are not exclusive and are in addition to any other procedures, rights, or remedies which exist with respect to any other provisions of law including state and federal criminal prosecutions and common law statutory actions. (c) Pursuant to 2521 of Title 29, nothing in this subchapter is intended to conflict with or supersede regulations issued prior to this subchapters effective date. 3687. Attorneys fees. A person who suffers damage or injury as a result of a violation of subchapter II of Chapter 25 of this title in a matter related to a home improvement contract has a cause of action to recover actual damages, court costs, and reasonable attorneys fees. Section 2. Amend 4404, Title 6 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows: 4404. Unlawful practices. (a) Section 2513(b)(2) of this title notwithstanding, in connection with any door-to-door sale, sale that does not involve a home improvement contract, it is an unlawful practice within the meaning of 2513 of this title for any seller to: (1) Fail to furnish the buyer with a fully completed receipt or copy of any contract pertaining to such sale at the time of its execution, which is in the same language, e.g., Spanish, as that principally used in the oral sales presentation and which shows the date of the transaction and contains the name and address of the seller, and in immediate proximity to the space reserved in the contract for the signature of the buyer or on the front page of the receipt if a contract is not used and in bold-faced type of a minimum size of 10-point, a statement in substantially the following form: YOU, THE BUYER, MAY CANCEL THIS TRANSACTION AT ANY TIME PRIOR TO MIDNIGHT OF THE THIRD BUSINESS DAY AFTER THE DATE OF THIS TRANSACTION. SEE THE ATTACHED NOTICE OF CANCELLATION FORM FOR AN EXPLANATION OF THIS RIGHT. Beginning 1 year after the effective date of this section, such statement shall be printed in an ink of a conspicuous color other than that used for the rest of the contract and/or receipt. (2) Fail to furnish each buyer, when signing the door-to-door sales contract or otherwise agrees to buy consumer goods or services from the seller, a completed form in duplicate, captioned Notice of Cancellation, which shall be attached to the contract or receipt and easily detachable, and which shall contain in 10-point, bold-faced type the following information and statements in the same language, e.g., Spanish, as that used in the contract: NOTICE OF CANCELLATION ________ (Enter date of transaction) You may cancel this transaction, without any penalty or obligation, within 3 business days from the above date. If you cancel, any property traded in, any payments made by you under the contract or sale and any negotiable instrument executed by you will be returned within 10 business days following receipt by the seller of your cancellation notice, and any security interest arising out of the transaction will be cancelled. If you cancel, you must make available to the seller at your residence, in substantially as good condition as when received, any goods delivered to you under this contract or sale; or you may if you wish comply with the instructions of the seller regarding the return shipment of the goods at the seller s expense and risk. If you do not agree to return the goods to the seller or if the seller does not pick them up within 20 days of the date of your Notice of Cancellation, you may retain or dispose of the goods without any further obligation. To cancel this transaction, mail or deliver a signed and dated copy of this cancellation notice or any other written notice, or send a telegram, to ________ (Name of seller) , at ________ (Address at seller s place of business) not later than midnight of ________________ (Date) I hereby cancel this transaction. ________________ (Date) ________ (Buyer s signature) (3) Fail, before furnishing copies of the Notice of Cancellation to the buyer, to complete both copies by entering the name of the seller, the address of the seller s place of business, the date of the transaction and the date, not earlier than the third business day following the date of the transaction, by which the buyer may give the Notice of Cancellation. (4) Include in any door-to-door contract or receipt any confession of judgment or any waiver of any of the rights to which the buyer is entitled under this chapter including specifically the right to cancel the sale in accordance with this chapter. (5) Fail to inform each buyer orally, at the time the buyer signs the contract or purchases the goods or services, of the right to cancel. (6) Misrepresent in any manner the buyer s right to cancel. (7) Fail or refuse to honor any valid Notice of Cancellation by a buyer and within 10 business days after the receipt of such Notice, to (i) refund all payments made under the contract or sale; (ii) return any goods or property traded in, in substantially as good condition as when received by the seller; (iii) cancel and return any negotiable instrument executed by the buyer in connection with the contract or sale and take any action necessary or appropriate to terminate promptly any security interest created in the transaction. (8) Negotiate, transfer, sell or assign any note or other evidence of indebtedness to a finance company or other third party prior to midnight of the fifth business day following the day the contract was signed or the goods or services were purchased. (9) Fail, within 10 business days of receipt of the buyer s Notice of Cancellation, to notify the buyer whether the seller intends to repossess or to abandon any shipped or delivered goods. (b) Section 2513(b)(2) of this title notwithstanding, in connection with any door-to-door sale that involves a home improvement contract, it is an unlawful practice within the meaning of 2513 of this title for any seller to: (1) Fail to furnish the buyer with a fully completed receipt or copy of any contract pertaining to such sale at the time of its execution, which is in the same language, e.g., Spanish, as that principally used in the oral sales presentation and which shows the date of the transaction and contains the name and address of the seller, and in immediate proximity to the space reserved in the contract for the signature of the buyer or on the front page of the receipt if a contract is not used and in bold-faced type of a minimum size of 10-point, a statement in substantially the same form set forth in 3685(b)(1) of this title. (2) Fail to furnish each buyer, when signing the door-to-door sales contract or otherwise agrees to buy consumer goods or services from the seller, a completed form in duplicate, captioned Notice of Cancellation, which shall be attached to the contract or receipt and easily detachable, and which shall contain in 10-point, bold-faced type the following information and statements in the same language, e.g., Spanish, as that used in the contract: NOTICE OF CANCELLATION ________ (Enter date of transaction) You may cancel this transaction, without any penalty or obligation, within 3 business days from the above date. If you are 62 years of age or older or a person with a disability, you may cancel this transaction within 5 business days from the above date. If you cancel, any property traded in, any payments made by you under the contract or sale and any negotiable instrument executed by you will be returned within 10 business days following receipt by the seller of your cancellation notice, and any security interest arising out of the transaction will be cancelled. If you cancel, you must make available to the seller at your residence, in substantially as good condition as when received, any goods delivered to you under this contract or sale; or you may if you wish comply with the instructions of the seller regarding the return shipment of the goods at the seller s expense and risk. If you do not agree to return the goods to the seller or if the seller does not pick them up within 20 days of the date of your Notice of Cancellation, you may retain or dispose of the goods without any further obligation. To cancel this transaction, mail or deliver a signed and dated copy of this cancellation notice or any other written notice, or send a telegram, to ________ (Name of seller) , at ________ (Address at seller s place of business) not later than midnight of ________________ (Date) I hereby cancel this transaction. ________________ (Date) ________ (Buyer s signature) (3) Fail, before furnishing copies of the Notice of Cancellation to the buyer, to complete both copies by entering the name of the seller, the address of the seller s place of business, the date of the transaction and the date, not earlier than the third business day following the date of the transaction, by which the buyer may give the Notice of Cancellation. (4) Include in any door-to-door contract or receipt any confession of judgment or any waiver of any of the rights to which the buyer is entitled under this chapter including specifically the right to cancel the sale in accordance with this chapter. (5) Fail to inform each buyer orally, at the time the buyer signs the contract or purchases the goods or services, of the right to cancel. (6) Misrepresent in any manner the buyer s right to cancel. (7) Fail or refuse to honor any valid Notice of Cancellation by a buyer and within 10 business days after the receipt of such Notice, to (i) refund all payments made under the contract or sale; (ii) return any goods or property traded in, in substantially as good condition as when received by the seller; (iii) cancel and return any negotiable instrument executed by the buyer in connection with the contract or sale and take any action necessary or appropriate to terminate promptly any security interest created in the transaction. (8) Negotiate, transfer, sell or assign any note or other evidence of indebtedness to a finance company or other third party prior to midnight of the fifth business day following the day the contract was signed or the goods or services were purchased. (9) Fail, within 10 business days of receipt of the buyer s Notice of Cancellation, to notify the buyer whether the seller intends to repossess or to abandon any shipped or delivered goods. Section 3. Amend 916, Title 11 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows: 916. Home improvement fraud; class B felony; class D felony; class F felony; class G felony, class A misdemeanor. (a) For the purpose of this section, the following definitions shall apply: (1) Contract price means the total price agreed upon under a home improvement contract. (2)a.Debarment means the prohibition of any home improvement contractor who has received 2 or more qualifying convictions, at least 1 of which was entered after [the effective date of this Act], from registering or retaining a certificate of registration as a contractor under the Delaware Contractor Registration Act under Chapter 36 of Title 19. b. An individual subject to debarment may be employed by a business which engages in home improvement, provided that the individual does not engage in solicitation of work for the business. (2) (3) Home improvement means any alteration, repair, addition, modification or improvement to any dwelling or the property on which it is situated, including but not limited to the construction, painting or coating, installation, replacement or repair of driveways, sidewalks, swimming pools, unattached structures, porches, kitchens, bathrooms, chimneys, fireplaces, stoves, air conditioning or heating systems, hot water heaters, water treatment systems, electrical wiring or systems, plumbing fixtures or systems, doors or windows, roofs, gutters, downspouts and siding. (3) (4) A home improvement contract is any agreement, whether written or oral, whereby a person offers or agrees to provide home improvements in exchange for payment in any form, regardless of whether any such payments have been made, and includes all agreements for labor, services, and materials to be furnished and performed under the contract. (4) (5) A material fact is a fact that a reasonable person would consider important when purchasing a home improvement of the variety being offered. (6) A qualifying conviction means a conviction for theft, home improvement fraud, or new home construction fraud or any comparable offense under the laws of any other state, the United States, or any territory of the United States, that arose from any of the following: a. Operating a business engaged in home improvement. b. Soliciting for a business engaged in home improvement. c. Employing individuals to engage in home improvement. d. Having an ownership interest in a business engaged in home improvement. (d) (1) Except where the person who purchased the home improvement is 62 years of age or older, or an adult who is impaired as defined in 3902 of Title 31, or a person with a disability as defined in 3901(a)(2) of Title 12, home improvement fraud is a class A misdemeanor, unless the loss to the person who purchased the home improvement is $1500 or more, in which case it is a class G felony. Any individual with 2 or more qualifying convictions, at least 1 of which was entered after [the effective date of this Act], is subject to debarment. For purposes of debarment, a second or later qualifying conviction must not arise from the same incident or series of incidents which led to the first qualifying conviction. (2) Where the person who purchased the home improvement is 62 years of age or older, or an adult who is impaired as defined in 3902 of Title 31, or a person with a disability as defined in 3901(a)(2) of Title 12, home improvement fraud is a class G felony, unless the loss to the person who purchased the home improvement is $1500 or more, in which case it is a class F felony. (3) Notwithstanding paragraphs (d)(1) and (2) of this section: a. Where the loss to the person who purchased the home improvement is at least $50,000 but less than $100,000, home improvement fraud is a class D felony. b. Where the loss to the person who purchased the home improvement is at least $100,000, home improvement fraud is a class B felony. (4) Any individual who is subject to debarment under this statute but nevertheless engages in the activity prohibited pursuant to the debarment is subject to a Class D felony regardless of whether home improvement fraud has occurred on existing construction projects.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:
Section 1. Amend Chapter 36, Title 6 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:
Subchapter IV. Home Improvement Protections
3684. Definitions.
As used in this subchapter:
(1) Buyer means a person who purchases home improvement services or merchandise from a home improvement contractor.
(2) Contractor means any person, firm, partnership, joint venture, limited liability company, or other company, or an officer, representative, agent, or employee of a person, firm, partnership, joint venture, limited liability company, or other company, engaged in the trade or commerce of home improvement.
(3) Home means a house, dwelling, condominium, townhouse, apartment, or such other residential building or dwelling in which a person resides.
(4) Home improvement means as defined in 916 of Title 11.
(5) Home improvement contract means as defined in 916 of Title 11.
3685. Home improvement contracts.
(a) All home improvement contracts must be in writing.
(b) Any buyer entering into home improvement contracts where the buyer is to pay more than $500 has a right to cancel a home improvement contract at any time prior to midnight of the third business day after the home improvement contract is signed. A buyer who is 62 years of age or older, or an adult who is impaired as defined in 3902 of Title 31, or a person with a disability as defined in 3901(a)(2) of Title 12, has the right to cancel a home improvement contract at any time prior to midnight of the fifth business day after the home improvement contract is signed.
(1) All contracts must contain in 12-point, bold-faced type the following information and statement:
YOU, THE BUYER, MAY CANCEL THIS TRANSACTION AT ANY TIME PRIOR TO MIDNIGHT OF THE THIRD BUSINESS DAY AFTER THE DATE OF THIS TRANSACTION. SEE THE ATTACHED NOTICE OF CANCELLATION FORM FOR AN EXPLANATION OF THIS RIGHT. IF YOU ARE 62 YEARS OF AGE OR OLDER OR A PERSON WITH A DISABILITY, YOU MAY CANCEL THIS TRANSACTION AT ANY TIME PRIOR TO MIDNIGHT OF THE FIFTH BUSINESS DAY AFTER THE DATE OF THIS TRANSACTION.
(2) All contracts must append a form captioned Notice of Cancellation, which must be attached to the home improvement contract or receipt and be easily detachable, and must contain in 12-point, bold-face type a cancellation notice with the name of the contractor, the address of the contractors place of business, the date of the transaction, and the date by which the buyer may give the Notice of Cancellation.
(3) A contractor must return all deposits and other money paid to the contractor within 10 days of receiving a Notice of Cancellation from the buyer.
(c) Any buyer has the right to waive the cancellation period described in subsection (b). A waiver of the cancellation is invalid unless all of the following are true:
(1) The waiver is in writing and is a separate document from the contract.
(2) The waiver is signed by the buyer and the contractor.
(3) The waiver includes the date the contractor will begin work under the contract.
(4) The waiver includes the following language in 10-point, bold-faced type:
I, THE BUYER, HEREBY WAIVE THE STATUTORILY PROVIDED CANCELLATION PERIOD FOR HOME IMPROVEMENT CONTRACTS. I REQUESTED THIS WAIVER BECAUSE I WANT THE CONTRACTOR TO BEGIN WORK ON THE DATE INDICATED IN THIS WAIVER, AND THIS DATE IS WITHIN THE CANCELLATION PERIOD. I REQUESTED THIS WAIVER IN RELIANCE ON THE CONTRACTORS EXPRESS REPRESENTATION THAT WORK WILL BEGIN ON THE DATE STATED IN THIS WAIVER.
(d) A deposit for a home improvement contract may not exceed 10% of the contract price unless the contractor requires amounts in excess of 10% to purchase materials or professional services without which the contractor cannot reasonably begin the project, in which case the deposit is limited to 33% of the cost of the materials and professional services needed to commence the contracted work.
(e) If payments, other than a deposit, are to be made before the project is completed, the details of these payments must be included in a payment schedule in the home improvement contract, which schedule must set forth the amount of work, materials, or services that are to be performed for each such payment. Any changes to such schedule must be reflected in an amendment to the home improvement contract.
(f) A contractor must apply for all permits necessary to do the work contemplated by a home improvement contract, if any, by the following dates:
(1) Thirty days after 50% of any deposit due under the home improvement contract is paid.
(2) If no deposit is due, then within 30 days after the home improvement contract is signed or by a mutually agreed upon date set forth in the home improvement contract.
(g) A contractor must start the work contemplated by a home improvement contract by the date set forth in such home improvement contract unless any of the following applies:
(1) The home improvement is delayed by events beyond the contractors control and the contractor has notified the buyer in writing of the delay, the specific reason for the delay, and a new start date that will replace the date set forth in the contract.
(2) The buyer has agreed in writing to a later date.
(h) If the contractor cannot start the work by the date set forth in the home improvement contract and no condition set forth in subsection (g) of this section applies, the buyer is entitled to terminate the home improvement contract and obtain a refund of all payments made under the contract.
(i) A contractor may not do the following:
(1) Include in a home improvement contract any confession of judgment or any waiver of any of the rights to which the buyer is entitled under this subchapter.
(2) Negotiate, transfer, sell, or assign any note or other evidence of indebtedness to a finance company or other third party prior to midnight of the fifth business day following the day the home improvement contract was signed.
3686. Enforcement.
(a) Any violation of 3685 of this subchapter is an unlawful practice under 2513 of this title and a violation of subchapter II of Chapter 25 of this title.
(b) The remedies and penalties provided for in this section are not exclusive and are in addition to any other procedures, rights, or remedies which exist with respect to any other provisions of law including state and federal criminal prosecutions and common law statutory actions.
(c) Pursuant to 2521 of Title 29, nothing in this subchapter is intended to conflict with or supersede regulations issued prior to this subchapters effective date.
3687. Attorneys fees.
A person who suffers damage or injury as a result of a violation of subchapter II of Chapter 25 of this title in a matter related to a home improvement contract has a cause of action to recover actual damages, court costs, and reasonable attorneys fees.
Section 2. Amend 4404, Title 6 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:
4404. Unlawful practices.
(a) Section 2513(b)(2) of this title notwithstanding, in connection with any door-to-door sale, sale that does not involve a home improvement contract, it is an unlawful practice within the meaning of 2513 of this title for any seller to:
(1) Fail to furnish the buyer with a fully completed receipt or copy of any contract pertaining to such sale at the time of its execution, which is in the same language, e.g., Spanish, as that principally used in the oral sales presentation and which shows the date of the transaction and contains the name and address of the seller, and in immediate proximity to the space reserved in the contract for the signature of the buyer or on the front page of the receipt if a contract is not used and in bold-faced type of a minimum size of 10-point, a statement in substantially the following form:
YOU, THE BUYER, MAY CANCEL THIS TRANSACTION AT ANY TIME PRIOR TO MIDNIGHT OF THE THIRD BUSINESS DAY AFTER THE DATE OF THIS TRANSACTION. SEE THE ATTACHED NOTICE OF CANCELLATION FORM FOR AN EXPLANATION OF THIS RIGHT.
Beginning 1 year after the effective date of this section, such statement shall be printed in an ink of a conspicuous color other than that used for the rest of the contract and/or receipt.
(2) Fail to furnish each buyer, when signing the door-to-door sales contract or otherwise agrees to buy consumer goods or services from the seller, a completed form in duplicate, captioned Notice of Cancellation, which shall be attached to the contract or receipt and easily detachable, and which shall contain in 10-point, bold-faced type the following information and statements in the same language, e.g., Spanish, as that used in the contract:
NOTICE OF CANCELLATION
________ (Enter date of transaction)
You may cancel this transaction, without any penalty or obligation, within 3 business days from the above date.
If you cancel, any property traded in, any payments made by you under the contract or sale and any negotiable instrument executed by you will be returned within 10 business days following receipt by the seller of your cancellation notice, and any security interest arising out of the transaction will be cancelled.
If you cancel, you must make available to the seller at your residence, in substantially as good condition as when received, any goods delivered to you under this contract or sale; or you may if you wish comply with the instructions of the seller regarding the return shipment of the goods at the seller s expense and risk.
If you do not agree to return the goods to the seller or if the seller does not pick them up within 20 days of the date of your Notice of Cancellation, you may retain or dispose of the goods without any further obligation.
To cancel this transaction, mail or deliver a signed and dated copy of this cancellation notice or any other written notice, or send a telegram, to
________ (Name of seller) , at ________ (Address at seller s place of business)
not later than midnight of ________________ (Date)
I hereby cancel this transaction.
________________ (Date)
________ (Buyer s signature)
(3) Fail, before furnishing copies of the Notice of Cancellation to the buyer, to complete both copies by entering the name of the seller, the address of the seller s place of business, the date of the transaction and the date, not earlier than the third business day following the date of the transaction, by which the buyer may give the Notice of Cancellation.
(4) Include in any door-to-door contract or receipt any confession of judgment or any waiver of any of the rights to which the buyer is entitled under this chapter including specifically the right to cancel the sale in accordance with this chapter.
(5) Fail to inform each buyer orally, at the time the buyer signs the contract or purchases the goods or services, of the right to cancel.
(6) Misrepresent in any manner the buyer s right to cancel.
(7) Fail or refuse to honor any valid Notice of Cancellation by a buyer and within 10 business days after the receipt of such Notice, to (i) refund all payments made under the contract or sale; (ii) return any goods or property traded in, in substantially as good condition as when received by the seller; (iii) cancel and return any negotiable instrument executed by the buyer in connection with the contract or sale and take any action necessary or appropriate to terminate promptly any security interest created in the transaction.
(8) Negotiate, transfer, sell or assign any note or other evidence of indebtedness to a finance company or other third party prior to midnight of the fifth business day following the day the contract was signed or the goods or services were purchased.
(9) Fail, within 10 business days of receipt of the buyer s Notice of Cancellation, to notify the buyer whether the seller intends to repossess or to abandon any shipped or delivered goods.
(b) Section 2513(b)(2) of this title notwithstanding, in connection with any door-to-door sale that involves a home improvement contract, it is an unlawful practice within the meaning of 2513 of this title for any seller to:
(1) Fail to furnish the buyer with a fully completed receipt or copy of any contract pertaining to such sale at the time of its execution, which is in the same language, e.g., Spanish, as that principally used in the oral sales presentation and which shows the date of the transaction and contains the name and address of the seller, and in immediate proximity to the space reserved in the contract for the signature of the buyer or on the front page of the receipt if a contract is not used and in bold-faced type of a minimum size of 10-point, a statement in substantially the same form set forth in 3685(b)(1) of this title.
(2) Fail to furnish each buyer, when signing the door-to-door sales contract or otherwise agrees to buy consumer goods or services from the seller, a completed form in duplicate, captioned Notice of Cancellation, which shall be attached to the contract or receipt and easily detachable, and which shall contain in 10-point, bold-faced type the following information and statements in the same language, e.g., Spanish, as that used in the contract:
NOTICE OF CANCELLATION
________ (Enter date of transaction)
You may cancel this transaction, without any penalty or obligation, within 3 business days from the above date. If you are 62 years of age or older or a person with a disability, you may cancel this transaction within 5 business days from the above date.
If you cancel, any property traded in, any payments made by you under the contract or sale and any negotiable instrument executed by you will be returned within 10 business days following receipt by the seller of your cancellation notice, and any security interest arising out of the transaction will be cancelled.
If you cancel, you must make available to the seller at your residence, in substantially as good condition as when received, any goods delivered to you under this contract or sale; or you may if you wish comply with the instructions of the seller regarding the return shipment of the goods at the seller s expense and risk.
If you do not agree to return the goods to the seller or if the seller does not pick them up within 20 days of the date of your Notice of Cancellation, you may retain or dispose of the goods without any further obligation.
To cancel this transaction, mail or deliver a signed and dated copy of this cancellation notice or any other written notice, or send a telegram, to
________ (Name of seller) , at ________ (Address at seller s place of business)
not later than midnight of ________________ (Date)
I hereby cancel this transaction.
________________ (Date)
________ (Buyer s signature)
(3) Fail, before furnishing copies of the Notice of Cancellation to the buyer, to complete both copies by entering the name of the seller, the address of the seller s place of business, the date of the transaction and the date, not earlier than the third business day following the date of the transaction, by which the buyer may give the Notice of Cancellation.
(4) Include in any door-to-door contract or receipt any confession of judgment or any waiver of any of the rights to which the buyer is entitled under this chapter including specifically the right to cancel the sale in accordance with this chapter.
(5) Fail to inform each buyer orally, at the time the buyer signs the contract or purchases the goods or services, of the right to cancel.
(6) Misrepresent in any manner the buyer s right to cancel.
(7) Fail or refuse to honor any valid Notice of Cancellation by a buyer and within 10 business days after the receipt of such Notice, to (i) refund all payments made under the contract or sale; (ii) return any goods or property traded in, in substantially as good condition as when received by the seller; (iii) cancel and return any negotiable instrument executed by the buyer in connection with the contract or sale and take any action necessary or appropriate to terminate promptly any security interest created in the transaction.
(8) Negotiate, transfer, sell or assign any note or other evidence of indebtedness to a finance company or other third party prior to midnight of the fifth business day following the day the contract was signed or the goods or services were purchased.
(9) Fail, within 10 business days of receipt of the buyer s Notice of Cancellation, to notify the buyer whether the seller intends to repossess or to abandon any shipped or delivered goods.
Section 3. Amend 916, Title 11 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:
916. Home improvement fraud; class B felony; class D felony; class F felony; class G felony, class A misdemeanor.
(a) For the purpose of this section, the following definitions shall apply:
(1) Contract price means the total price agreed upon under a home improvement contract.
(2)a.Debarment means the prohibition of any home improvement contractor who has received 2 or more qualifying convictions, at least 1 of which was entered after [the effective date of this Act], from registering or retaining a certificate of registration as a contractor under the Delaware Contractor Registration Act under Chapter 36 of Title 19.
b. An individual subject to debarment may be employed by a business which engages in home improvement, provided that the individual does not engage in solicitation of work for the business.
(2) (3) Home improvement means any alteration, repair, addition, modification or improvement to any dwelling or the property on which it is situated, including but not limited to the construction, painting or coating, installation, replacement or repair of driveways, sidewalks, swimming pools, unattached structures, porches, kitchens, bathrooms, chimneys, fireplaces, stoves, air conditioning or heating systems, hot water heaters, water treatment systems, electrical wiring or systems, plumbing fixtures or systems, doors or windows, roofs, gutters, downspouts and siding.
(3) (4) A home improvement contract is any agreement, whether written or oral, whereby a person offers or agrees to provide home improvements in exchange for payment in any form, regardless of whether any such payments have been made, and includes all agreements for labor, services, and materials to be furnished and performed under the contract.
(4) (5) A material fact is a fact that a reasonable person would consider important when purchasing a home improvement of the variety being offered.
(6) A qualifying conviction means a conviction for theft, home improvement fraud, or new home construction fraud or any comparable offense under the laws of any other state, the United States, or any territory of the United States, that arose from any of the following:
a. Operating a business engaged in home improvement.
b. Soliciting for a business engaged in home improvement.
c. Employing individuals to engage in home improvement.
d. Having an ownership interest in a business engaged in home improvement.
(d) (1) Except where the person who purchased the home improvement is 62 years of age or older, or an adult who is impaired as defined in 3902 of Title 31, or a person with a disability as defined in 3901(a)(2) of Title 12, home improvement fraud is a class A misdemeanor, unless the loss to the person who purchased the home improvement is $1500 or more, in which case it is a class G felony. Any individual with 2 or more qualifying convictions, at least 1 of which was entered after [the effective date of this Act], is subject to debarment. For purposes of debarment, a second or later qualifying conviction must not arise from the same incident or series of incidents which led to the first qualifying conviction.
(2) Where the person who purchased the home improvement is 62 years of age or older, or an adult who is impaired as defined in 3902 of Title 31, or a person with a disability as defined in 3901(a)(2) of Title 12, home improvement fraud is a class G felony, unless the loss to the person who purchased the home improvement is $1500 or more, in which case it is a class F felony.
(3) Notwithstanding paragraphs (d)(1) and (2) of this section:
a. Where the loss to the person who purchased the home improvement is at least $50,000 but less than $100,000, home improvement fraud is a class D felony.
b. Where the loss to the person who purchased the home improvement is at least $100,000, home improvement fraud is a class B felony.
(4) Any individual who is subject to debarment under this statute but nevertheless engages in the activity prohibited pursuant to the debarment is subject to a Class D felony regardless of whether home improvement fraud has occurred on existing construction projects.
SYNOPSIS This Act protects consumers by regulating home improvement contracts. Among other things, this Act provides the buyer with a right to cancel home improvement contracts within 3 days (5 days for those over the age of 62 or with a disability); limits contract deposits and material deposits; and time periods in which construction must begin. It also prohibits confessions of judgments and hasty debt transfers. If a party to a home improvement contract violates a provision of this new subchapter, a person who is damaged as a result has a cause of action to seek damages, costs, and reasonable attorney's fees. This Act also creates a requirement that individuals convicted of 2 or more offenses of home improvement fraud after the effective date of this Act must be subject to debarment. This debarment will preclude these individuals from operating a business which engages in home improvement services or from employing other individuals to engage in home improvement services. Debarred individuals may work for a company which engages in home improvement themselves, so long as they are not in control of the company in question. This bill also enhances penalties for home improvement fraud for those with prior convictions for home improvement fraud; and creates enhanced penalties for individuals who engage in home improvement services while operating companies which are not registered with the Delaware Department of Labors Contractor Registry.
SYNOPSIS
This Act protects consumers by regulating home improvement contracts. Among other things, this Act provides the buyer with a right to cancel home improvement contracts within 3 days (5 days for those over the age of 62 or with a disability); limits contract deposits and material deposits; and time periods in which construction must begin. It also prohibits confessions of judgments and hasty debt transfers. If a party to a home improvement contract violates a provision of this new subchapter, a person who is damaged as a result has a cause of action to seek damages, costs, and reasonable attorney's fees.
This Act also creates a requirement that individuals convicted of 2 or more offenses of home improvement fraud after the effective date of this Act must be subject to debarment. This debarment will preclude these individuals from operating a business which engages in home improvement services or from employing other individuals to engage in home improvement services. Debarred individuals may work for a company which engages in home improvement themselves, so long as they are not in control of the company in question. This bill also enhances penalties for home improvement fraud for those with prior convictions for home improvement fraud; and creates enhanced penalties for individuals who engage in home improvement services while operating companies which are not registered with the Delaware Department of Labors Contractor Registry.