HLS 12RS-200 ENGROSSED
Page 1 of 6
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
Regular Session, 2012
HOUSE BILL NO. 386
BY REPRESENTATIVE PONTI
CONTRACTORS/CONSTRUCTI ON: Provides relative to home improvement contracting
AN ACT1
To amend and reenact R.S. 37:2175.1(A)(introductory paragraph), 2175.2(C), and 2175.3(B)2
and to enact R.S. 37:2175.1(A)(6) and (7) and (D) and 2175.3(A)(9), relative to3
home improvement contracting; to lower the minimum threshold amount for home4
improvement contracting; to provide for a right to cancel a contract for home5
improvement contracting; to require notice of the right to cancel; to provide for6
refund of payments; to require proof of general liability insurance in a minimum7
amount; to prohibit a home improvement contractor from advertising or promising8
to pay or rebate all or any portion of an applicable insurance deductible as an9
inducement to the sale of goods or service; to provide for nullification of the contract10
and a cause of action for violations; to provide for an unfair trade practice violation;11
to provide for remedies for violations; and to provide for related matters.12
Be it enacted by the Legislature of Louisiana:13
Section 1. R.S. 37:2175.1(A)(introductory paragraph), 2175.2(C), and 2175.3(B) are14
hereby amended and reenacted and R.S. 37:2175.1(A)(6) and (7) and (D) and 2175.3(A)(9)15
are hereby enacted to read as follows: 16
§2175.1. Home improvement contracting; written contract required; right to cancel17
A. Every agreement to perform home improvement contracting services, as18
defined by this Part, in an amount in excess of seventy-five one thousand five19
hundred dollars, but not in excess of seventy-five thousand dollars, shall be in20
writing and shall include the following documents and information:21
* * *22 HLS 12RS-200 ENGROSSED
HB NO. 386
Page 2 of 6
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
(6) If the contract is for goods or services to be paid from the proceeds of a1
property or casualty insurance policy, a statement in boldface type of a minimum2
size of ten points, in substantially the following form:3
"You may cancel this contract at any time within seventy-two hours after you4
have been notified that your insurer has denied all or any part of your claim to pay5
for the goods and services to be provided under this contract. See attached notice of6
cancellation form for an explanation of this right."7
(7) If the contract is for goods or services to be paid from the proceeds of a8
property or casualty insurance policy, a fully completed form in duplicate, captioned9
"NOTICE OF CANCELLATION", which shall be attached to the contract but easily10
detachable, and which shall contain, in boldface type of a minimum size of ten11
points, the following statement:12
"NOTICE OF CANCELLATION13
If your insurer denies all or any part of your claim to pay for goods and14
services to be provided under this contract, you may cancel the contract by mailing15
or delivering a signed and dated copy of this cancellation notice or any other written16
notice to (name of home improvement contractor) at (address of contractor's place17
of business) at any time within seventy-two hours after you have been notified that18
your claim has been denied. If you cancel, any payments made by you under the19
contract, except for certain emergency work already performed by the contractor,20
shall be returned to you within ten business days following receipt by the contractor21
of your cancellation notice.22
I HEREBY CANCEL THIS TRANSACTION23
____________________________24
(Date)25
____________________________26
(Insured's Signature)"27
* * *28 HLS 12RS-200 ENGROSSED
HB NO. 386
Page 3 of 6
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
D.(1) A person who has entered into a written contract with a home1
improvement contractor to provide goods or services to be paid from the proceeds2
of a property or casualty insurance policy may cancel the contract within seventy-3
two hours after the insured party has been notified by the insurer that all or any part4
of the claim has been denied. Cancellation shall be evidenced by the insured party5
giving written notice of cancellation to the home improvement contractor at the6
address stated in the contract. Notice of cancellation, if given by mail, shall be7
effective upon deposit into the United States mail, postage prepaid, and properly8
addressed to the home improvement contractor. Notice of cancellation need not take9
a particular form and shall be sufficient if it indicates, by any form of written10
expression, the intention of the insured party not to be bound by the contract.11
(2) Within ten days after a contract referred to in this Subsection has been12
cancelled, the home improvement contractor shall tender to the owner or possessor13
of the residential real estate any payments, partial payments, or deposits made by the14
insured party and any note or other evidence of indebtedness. If, however, the home15
improvement contractor has performed any emergency services, acknowledged by16
the insured in writing to be necessary to prevent damage to the premises, the home17
improvement contractor shall be entitled to the reasonable value of such services.18
§2175.2. Home improvement contracting; registration required19
* * *20
C. The applicant shall furnish the board proof of general liability insurance21
in a minimum amount of five hundred thousand dollars, proof of workers'22
compensation insurance, and proof of registration with the Department of Revenue23
by providing a certificate of resident/nonresident status.24
* * *25
§2175.3. Home improvement contracting; prohibited acts; violations26
A. The following acts are prohibited by persons performing home27
improvement contracting services:28
* * *29 HLS 12RS-200 ENGROSSED
HB NO. 386
Page 4 of 6
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
(9) Advertising or promising to pay or rebate all or any portion of an1
applicable insurance deductible as an inducement to the sale of goods or services.2
For the purposes of this Section, a promise to pay or rebate the insurance deductible3
shall include granting any allowance or offering any discount against the fees to be4
charged or paying the insured party any form of compensation for any reason,5
including but not limited to permitting the home improvement contractor to display6
a sign or any other type of advertisement at the insured party's premises, or paying7
an insured party for providing a letter of referral or recommendation. If a home8
improvement contractor violates this Paragraph:9
(a) The insurer to whom the insured party tendered the claim shall not be10
obligated to consider the estimate prepared by the home improvement contractor.11
(b) The insured party or the applicable insurer may bring an action against12
the home improvement contractor in a court of competent jurisdiction for damages13
sustained as a result of the home improvement contractor's violation.14
B.(1) Violations of this Section shall subject the violator to the15
administrative sanctions as prescribed in this Part.16
(2) A violation of Paragraph (A)(9) of this Section shall constitute a17
prohibited practice under the Unfair Trade Practices and Consumer Protection Act,18
R.S. 51:1401 et seq., and shall be subject to the enforcement provisions of that Act.19
DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
Ponti HB No. 386
Abstract: Lowers the minimum threshold amount for home improvement contracting;
prohibits a home improvement contractor from promising to pay or rebate any
portion of an applicable insurance deductible as an inducement to the sale of goods
or services; authorizes a person who has entered into a written contract with a home
improvement contractor to provide goods or services to be paid from the proceeds
of a property or casualty insurance policy to cancel the contract within 72 hours after
the insured party has been notified by the insurer that any part of the claim has been
denied; requires proof of general liability insurance. HLS 12RS-200 ENGROSSED
HB NO. 386
Page 5 of 6
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
Present law requires every agreement to perform home improvement contracting services
in an amount in excess of $7,500, but not in excess of $75,000, to be in writing and to
include the following documents and information:
(1)The complete agreement between the owner and the contractor and a clear
description of any other documents which are or shall be incorporated into the
agreement.
(2)The full names, addresses, and the registration number of the home improvement
contractor.
(3)A detailed description of the work to be done and the materials to be used in the
performance of the contract.
(4)The total amount agreed to be paid for the work to be performed under the contract,
including all change orders and work orders.
(5)An approximation of the cost expected to be borne by the owner under a cost-plus
contract or a time-and-materials contract.
(6)The signature of all parties.
Proposed law retains present law but lowers the minimum transaction threshold amount to
$1,500.
Proposed law requires, if the contract is for goods or services to be paid from the proceeds
of a property or casualty insurance policy, the home improvement contractor shall furnish
the insured party a statement in boldface type of a minimum size of 10 points, in
substantially the following form:
"You may cancel this contract at any time within 72 hours after you have been
notified that your insurer has denied all or any part of your claim to pay for the goods
and services to be provided under this contract. See attached notice of cancellation
form for an explanation of this right."
Proposed law further requires the home improvement contractor to furnish each insured
party a fully completed form in duplicate, captioned "NOTICE OF CANCELLATION",
which shall be attached to the contract but easily detachable, and which shall contain, in
boldface type of a minimum size of 10 points, the following statement:
"NOTICE OF CANCELLATION
If your insurer denies all or any part of your claim to pay for goods and services to
be provided under this contract, you may cancel the contract by mailing or delivering
a signed and dated copy of this cancellation notice or any other written notice to
(name of home improvement contractor) at (address of contractor's place of business)
at any time within 72 hours after you have been notified that your claim has been
denied. If you cancel, any payments made by you under the contract, except for
certain emergency work already performed by the contractor, shall be returned to
you within 10 business days following receipt by the contractor of your cancellation
notice.
I HEREBY CANCEL THIS TRANSACTION
____________________________
(Date)
____________________________
(Insured's Signature)"
Proposed law allows a person who has entered into a written contract with a home
improvement contractor to provide goods or services to be paid from the proceeds of a HLS 12RS-200 ENGROSSED
HB NO. 386
Page 6 of 6
CODING: Words in struck through type are deletions from existing law; words underscored
are additions.
property or casualty insurance policy to cancel the contract within 72 hours after the insured
party has been notified by the insurer that all or any part of the claim has been denied.
Proposed law provides that cancellation shall be evidenced by the insured party giving
written notice of cancellation to the home improvement contractor at the address stated in
the contract.
Proposed law provides that the notice of cancellation, if given by mail, shall be effective
upon deposit into the U.S. mail, postage prepaid, and properly addressed to the home
improvement contractor.
Proposed law provides that the notice of cancellation need not take a particular form and
shall be sufficient if it indicates, by any form of written expression, the intention of the
insured party not to be bound by the contract.
Proposed law requires the home improvement contractor, within 10 days after a contract has
been cancelled, to tender to the owner or possessor of the residential real estate any
payments, partial payments, or deposits made by the insured party and any note or other
evidence of indebtedness.
Proposed law provides that if the home improvement contractor has performed any
emergency services, acknowledged by the insured in writing to be necessary to prevent
damage to the premises, the home improvement contractor shall be entitled to the reasonable
value of such services.
Present law requires an applicant for a home improvement contracting certificate of
registration to furnish the State Licensing Board for Contractors proof of workers'
compensation insurance and proof of registration with the Dept. of Revenue by providing
a certificate of resident/nonresident status.
Proposed law retains present law and adds a requirement to furnish proof of general liability
insurance in a minimum amount of $500,000.
Proposed law prohibits a home improvement contractor from promising to pay or rebate all
or any portion of an applicable insurance deductible as an inducement to the sale of goods
or services, including but not limited to granting any allowance or offering any discount
against the fees to be charged or paying the insured party any form of compensation for any
reason, including but not limited to permitting the home improvement contractor to display
a sign or any other type of advertisement at the insured party's premises, or paying an
insured party for providing a letter of referral or recommendation.
Proposed law provides that, if a home improvement contractor violates proposed law, the
insurer to whom the insured party tendered the claim shall not be obligated to consider the
estimate prepared by the home improvement contractor.
Proposed law authorizes the insured party or the applicable insurer to bring an action against
the home improvement contractor for damages sustained as a result of the home
improvement contractor's violation of proposed law.
Proposed law provides that any violation of proposed law shall constitute a prohibited
practice under present law (Unfair Trade Practices and Consumer Protection Act, R.S.
51:1401 et seq.,) and shall be subject to the enforcement provisions of that act.
(Amends R.S. 37:2175.1(A)(intro. para.), 2175.2(C), and 2175.3(B); Adds R.S.
37:2175.1(A)(6) and (7) and (D) and 2175.3(A)(9))