25 LC 46 1228S
The House Committee on Agriculture and Consumer Affairs offers the following
substitute to SB 201:
A BILL TO BE ENTITLED
AN ACT
To amend Code Section 10-1-393 of the Official Code of Georgia Annotated, relating to1
unfair or deceptive practices in consumer transactions unlawful and examples, so as to2
provide increased consumer protection for homeowners entering into contracts with3
contractors following natural disasters; to provide for certain contractual requirements; to4
provide for notice language; to amend Code Section 33-6-5 of the Official Code of Georgia5
Annotated, relating to unfair methods of competition and unfair or deceptive acts or6
practices, so as to prohibit the assignment of benefits in certain circumstances; to provide for7
definitions; to provide for related matters; to provide for legislative findings; to provide for8
effective dates and applicability; to repeal conflicting laws; and for other purposes.9
BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:10
SECTION 1.11
The General Assembly finds that:12
(1) Following natural disasters, homeowners often need for repairs to be completed to their13
homes in an expeditious manner;14
(2) Due to such time pressures, homeowners may enter into contracts with contractors15
much more quickly than such homeowners typically would;16
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(3) Many homeowners believe that assigning their insurance proceeds to contractors who17
contract to work on their homes will expedite the repairs of such homes;18
(4) Such homeowners may not realize that some contractors will accept the assigned19
insurance proceeds and then fail to expeditiously perform the required work or perform 20
the work in a substandard manner;21
(5) There is a need in this state to provide greater protection for homeowners following22
natural disasters to ensure that contracted work on their homes is performed in an23
expeditious and professional manner; and24
(6) There is also a need to specifically prohibit the assignment of insurance proceeds to25
contractors for a period of one year following the occurrence of a natural disaster.26
SECTION 2.27
Code Section 10-1-393 of the Official Code of Georgia Annotated, relating to unfair or28
deceptive practices in consumer transactions unlawful and examples, is amended in29
subsection (b) by striking "and" at the end of paragraph (34), by replacing the period at the30
end of paragraph (35) with "; and", and by adding a new paragraph to read as follows:31
"(36)(A) With respect to any contractor entering into a contract with a homeowner32
within one year of a natural disaster for the provision of services for the repair,33
replacement, or mitigation of damage of or to the homeowner's home caused by such34
disaster:35
(i) Failing to substantially commence work on the contracted services within one year36
of the execution of such contract;37
(ii) Completing all or a portion of the agreed upon services in a substandard manner;38
(iii) Entering into a contract with the homeowner whereby the homeowner assigned39
insurance proceeds to the contractor;40
(iv) Completing services in a manner inconsistent with the state minimum standard41
codes or accredited industry standards; or42
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(v) Failing to comply with subparagraph (B) of this paragraph.43
(B) Any contractor entering into a contract with a homeowner within one year of a44
natural disaster for the provision of services for the repair, replacement, or mitigation45
of damage of or to the homeowner's home caused by such disaster shall:46
(i) Accept the cancellation of the contract by the homeowner prior to midnight on the47
fifth business day after such homeowner has received written notice from the insurer48
that all or any part of the claim or contract related to the natural disaster is not a49
covered loss under the homeowner's insurance policy. Cancellation shall be50
evidenced by the homeowner giving written notice of cancellation to the contractor51
at the address stated in the contract. Notice of cancellation, if given by mail, shall be52
effective upon deposit into the United States mail, postage prepaid and properly53
addressed to the contractor. Notice of cancellation need not take a particular form and54
shall be sufficient if it indicates, by any form of written expression, the intention of55
the homeowner not to be bound by the contract; and56
(ii) Before entering a contract as provided in this subparagraph:57
(I) Furnish the homeowner with a statement in boldface type of a minimum size of58
ten points in substantially the following form:59
'You may cancel this contract at any time before midnight on the fifth business day60
after you have received written notification from your insurer that all or any part of61
the claim or contract is not a covered loss under the insurance policy. This right to62
cancel is in addition to any other rights of cancellation which may be found in state63
or federal law or regulation. See the attached notice of cancellation form for an64
explanation of this right'; and65
(II) Furnish each homeowner with a fully completed form in duplicate, captioned66
'NOTICE OF CANCELLATION,' which shall be attached to the contract but easily67
detachable, and which shall contain in boldface type of a minimum size of ten68
points the following statement:69
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'NOTICE OF CANCELLATION70
If you are notified by your insurer that all or any part of the claim or contract is not71
a covered loss under the insurance policy, you may cancel the contract by mailing72
or delivering a signed and dated copy of this cancellation notice or any other written73
notice to (name of contractor) at 74
(address of contractor's place of business)75
at any time prior to midnight on the fifth business day after you have received such76
notice from your insurer.77
I HEREBY CANCEL THIS TRANSACTION78
79
(date)80
81
(insured's signature).'82
(C) Notwithstanding other provisions of law in this paragraph, if the contractor has83
performed any emergency services, acknowledged by the homeowner in writing to be84
necessary to prevent immediate damage to the premises, the contractor shall be entitled85
to collect the reasonable amount due for the emergency services at the time they are86
rendered. Any provision in a contract provided for in this paragraph that requires the87
payment of any fee for any services except emergency services shall not be enforceable88
against any homeowner who has canceled a contract under this paragraph.89
(D) As used in this paragraph, the term 'natural disaster' means a flood, tornado,90
hurricane, earthquake, or other occurrence for which a state of emergency is proclaimed91
by the Governor."92
SECTION 3.93
Code Section 33-6-5 of the Official Code of Georgia Annotated, relating to unfair methods94
of competition and unfair or deceptive acts or practices, is amended by striking "and" at the95
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end of paragraph (13), striking the period at the end of paragraph (14) and inserting "; and"96
in lieu thereof, and adding a new paragraph to read as follows:97
"(15)(A) No insurer shall sell homeowner's insurance policies that allow for the98
assignment of proceeds to a contractor within one year of a natural disaster which99
causes damage to the insured's residential property.100
(B) As used in this paragraph, the term:101
(i) 'Natural disaster' means a flood, tornado, hurricane, earthquake, or other102
occurrence for which a state of emergency is proclaimed by the Governor.103
(ii) 'Residential property' means real property used or occupied as the primary104
residence of a natural person."105
SECTION 4.106
Section 3 of this Act shall become effective on January 1, 2026, and shall apply to all107
policies issued, delivered, issued for delivery, or renewed in this state on or after such date.108
The remainder of this Act shall become effective on July 1, 2025. 109
SECTION 5. 110
All laws and parts of laws in conflict with this Act are repealed.111
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