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| To enact sections 4722.01 to 4722.08 of the Revised | 1 |
| Code to establish laws governing the practices | 2 |
| of home improvement contractors and to provide | 3 |
| civil remedies for home owners who are damaged | 4 |
| by a home improvement contractor who violates | 5 |
| the law. | 6 |
| Section 1. That sections 4722.01, 4722.02, 4722.03, 4722.04, | 7 |
| 4722.05, 4722.06, 4722.07, and 4722.08 of the Revised Code be | 8 |
| enacted to read as follows: | 9 |
| Sec. 4722.01. As used in this chapter: | 10 |
| (A) "Construction defect" means a deficiency that arises | 11 |
| directly or indirectly from a home improvement. | 12 |
| (B) "Dwelling action" means any of the following actions, | 13 |
| brought against a home improvement contractor, for damages or the | 14 |
| loss of use of real property, caused by a construction defect: | 15 |
| (1) A civil action in contract or tort for damages or | 16 |
| indemnity; | 17 |
| (2) Any action brought pursuant to Chapter 1345. of the | 18 |
| Revised Code; | 19 |
| (3) Any action brought pursuant to this chapter. | 20 |
| (C) "Home improvement" means any repair, alteration, or | 21 |
| addition to any residential building, industrialized unit, | 22 |
| manufactured home, or mobile home, or to any dwelling unit in | 23 |
| any type of structure. "Home improvement" does not include any | 24 |
| of the following: | 25 |
| (1) Construction of a new residential building, | 26 |
| industrialized unit, or manufactured home; | 27 |
| (2) Work performed on a structure that contains four or more | 28 |
| dwelling units, except for work on an individual dwelling unit | 29 |
| within that structure; | 30 |
| (3) Work performed on the common area of a condominium | 31 |
| property. | 32 |
| (D) "Home improvement contractor" means any person who | 33 |
| performs or offers to perform any home improvement for | 34 |
| compensation. | 35 |
| (E) "Industrialized unit," "manufactured home," and | 36 |
| "residential building" have the same meanings as in section | 37 |
| 3781.06 of the Revised Code. | 38 |
| (F) "Mobile home" has the meaning as in section 4501.01 of | 39 |
| the Revised Code. | 40 |
| (G) "Owner" means the person who contracts with a home | 41 |
| improvement contractor for a home improvement. "Owner" may | 42 |
| include the owner of the property, a tenant who occupies the | 43 |
| dwelling unit on which the home improvement is performed, or a | 44 |
| person the owner authorizes to act on the owner's behalf to | 45 |
| contract for a home improvement, and any other person who | 46 |
| contracts for a home improvement. | 47 |
| Sec. 4722.02. (A) No home improvement contractor shall | 48 |
| perform any home improvement the cost of which equals or exceeds | 49 |
| one thousand dollars unless that person enters into a written | 50 |
| contract with the owner. The contract shall include all | 51 |
| agreements and conditions related to the home improvement, | 52 |
| including all of the following: | 53 |
| (1) The home improvement contractor's name, physical business | 54 |
| address, business telephone number, taxpayer identification | 55 |
| number, and physical home address; | 56 |
| (2) The owner's name, address, and telephone number; | 57 |
| (3) The address of the property where the home improvement is | 58 |
| to be performed; | 59 |
| (4) A detailed description of the home improvement, | 60 |
| including the goods and services to be furnished as part of the | 61 |
| home improvement; | 62 |
| (5) The date or time period the home improvement is to begin | 63 |
| and the date or time period it is to be completed; | 64 |
| (6) The total cost of the home improvement; | 65 |
| (7) Any cost of installation, delivery, or other cost that | 66 |
| the total cost does not cover; | 67 |
| (8) The dated signatures of the owner and the home | 68 |
| improvement contractor; | 69 |
| (9) A notice of applicable right to cure provisions in | 70 |
| substantially the following language: | 71 |
| "RIGHT TO CURE | 72 |
| IN THE EVENT THAT THE HOME IMPROVEMENT THAT IS THE SUBJECT | 73 |
| OF THIS CONTRACT RESULTS IN A CONSTRUCTION DEFECT, THE HOME | 74 |
| IMPROVEMENT CONTRACTOR NAMED IN THIS CONTRACT WILL HAVE THE RIGHT | 75 |
| TO CURE THE CONSTRUCTION DEFECT IN A MANNER CONSISTENT WITH | 76 |
| CHAPTER 4722. OF THE REVISED CODE IF THE CONSTRUCTION DEFECT | 77 |
| ARISES FROM A HOME IMPROVEMENT. GENERALLY THE RIGHT TO CURE | 78 |
| PROVISIONS PROVIDE THE HOME IMPROVEMENT CONTRACTOR THIRTY (30) | 79 |
| DAYS TO CURE ANY CONSTRUCTION DEFECT, BUT SEE THE APPLICABLE | 80 |
| SECTIONS OF THE REVISED CODE TO DETERMINE SPECIFIC TIME AND NOTICE | 81 |
| REQUIREMENTS." | 82 |
| (10) A notice stating whether or not the home improvement | 83 |
| contractor has performance bonds or other insurance beyond the | 84 |
| insurance required by section 4722.07 of the Revised Code that | 85 |
| will cover losses incurred through defects or breach of contract | 86 |
| terms by the home improvement contractor. | 87 |
| (B)(1) To determine the type of notice an owner requires when | 88 |
| the costs of a home improvement exceed the estimate provided in | 89 |
| the contract, the contract shall include a statement in | 90 |
| substantially the following language: | 91 |
| "EXCESS COSTS | 92 |
| IF AT ANY TIME A HOME IMPROVEMENT REQUIRES EXTRA COSTS ABOVE | 93 |
| THE COST SPECIFIED OR ESTIMATED IN THE CONTRACT WHICH WERE | 94 |
| UNFORESEEN, BUT REASONABLY NECESSARY, AND THE TOTAL OF ALL EXTRA | 95 |
| COSTS TO DATE EXCEEDS TEN PER CENT OF THE CONTRACT COST, YOU | 96 |
| HAVE A RIGHT TO AN ESTIMATE OF THOSE EXCESS COSTS BEFORE THE | 97 |
| HOME IMPROVEMENT CONTRACTOR BEGINS WORK RELATED TO THOSE COSTS. | 98 |
| INITIAL YOUR CHOICE OF THE TYPE OF ESTIMATE YOU REQUIRE: | 99 |
| ..... written estimate ..... oral estimate" | 100 |
| (2) If the total amount of unforeseen, but reasonably | 101 |
| necessary excess costs of a home improvement at any time exceeds | 102 |
| ten per cent of the cost estimated or specified in the | 103 |
| contract, prior to performing the work related to the excess | 104 |
| costs, the home improvement contractor shall provide an owner | 105 |
| with the type of notice the owner has designated in the | 106 |
| contract. | 107 |
| (3) If the contract stipulates that the specified cost of the | 108 |
| home improvement is a firm price and the home improvement | 109 |
| contractor will not charge the owner with any excess costs, the | 110 |
| home improvement contractor need not comply with the notice | 111 |
| requirements of this division. | 112 |
| (4) An owner is not liable for any excess costs unless the | 113 |
| costs were unforeseen, but reasonably necessary, and unless the | 114 |
| home improvement contractor complies with this section's notice | 115 |
| requirements. | 116 |
| Sec. 4722.03. No home improvement contractor shall do any of | 117 |
| the following: | 118 |
| (A) Prior to commencing work related to the home improvement, | 119 |
| fail to enter into a written contract that complies with this | 120 |
| chapter; | 121 |
| (B) After entering into a contract with an owner and prior to | 122 |
| commencing any work that is related to an excess cost, fail to | 123 |
| provide an estimate of the excess costs as this chapter requires; | 124 |
| (C) After entering into a contract with an owner, do any of | 125 |
| the following: | 126 |
| (1) Fail to disclose, prior to the owner's acceptance of any | 127 |
| goods or work related to an excess cost, that in failing to | 128 |
| approve an excess cost, completion of the work may not be possible | 129 |
| and a charge may be imposed for any disassembly, reassembly, or | 130 |
| partially completed work, which shall be directly related to the | 131 |
| actual labor or parts involved; | 132 |
| (2) Charge for any excess cost that the owner has not | 133 |
| approved; | 134 |
| (3) Represent that repairs or work have been performed when | 135 |
| such is not the fact; | 136 |
| (4) Fail to provide the owner, upon the owner's request, a | 137 |
| written itemized list of repairs performed or services rendered, | 138 |
| including a list of parts or materials and a statement of whether | 139 |
| they are used, manufactured, or rebuilt, if not new, the cost to | 140 |
| the owner, the amount charged for labor, and the identity of the | 141 |
| individual performing the repair or service; | 142 |
| (5) Fail to tender to the owner any replaced parts, unless | 143 |
| the parts are to be rebuilt or sold by the home improvement | 144 |
| contractor, or returned to the manufacturer in connection with a | 145 |
| warranted repair or service, and the intended reuse or return is | 146 |
| made known to the owner prior to commencing any repair or | 147 |
| services; | 148 |
| (6) Fail to provide a full refund for any goods or services | 149 |
| that the home improvement contractor has failed to deliver in | 150 |
| accordance with the terms and conditions of the contract required | 151 |
| by section 4722.02 of the Revised Code and for which the home | 152 |
| improvement contractor has received payment; | 153 |
| (7) Fail to provide to the owner, upon the owner's request, | 154 |
| a written, itemized receipt for any item of goods that are left | 155 |
| with, or turned over to, the home improvement contractor for | 156 |
| repair or services. The receipt shall include all of the | 157 |
| following: | 158 |
| (a) The identity of the person who will perform the repair or | 159 |
| services; | 160 |
| (b) The name and dated signature of the person or | 161 |
| representative who actually accepts the goods; | 162 |
| (c) A description including make and model number or other | 163 |
| features that will reasonably identify the goods that are turned | 164 |
| over and the repair or services that are to be performed. | 165 |
| (D) Make the performance of any home improvement contingent | 166 |
| upon a consumer's waiver of any rights this chapter provides; | 167 |
| (E) Represent that repairs, services, or work is necessary | 168 |
| when such is not the fact; | 169 |
| (F) Represent that an item of goods or any part thereof that | 170 |
| is being inspected or diagnosed for a home improvement is in a | 171 |
| dangerous condition, or that its continued use may be harmful, | 172 |
| when such is not the fact; | 173 |
| (G) Materially understate or misstate the estimated cost of | 174 |
| the home improvement; | 175 |
| (H) Fraudulently misrepresent any aspect of the transaction | 176 |
| or the nature or the quality of the work or materials; | 177 |
| (I) Fail at the time any owner signs or initials any | 178 |
| document to provide the owner with a copy of the document; | 179 |
| (J) Fail to disclose to the owner prior to the commencement | 180 |
| of any repair or service, that any part of the repair or service | 181 |
| will be performed by a person other than the home improvement | 182 |
| contractor or employee of the home improvement contractor if the | 183 |
| contract disclaims any warranty of the repair or service that | 184 |
| the other person performs; | 185 |
| (K) Represent that repairs or services must be performed | 186 |
| away from the property on which the home improvement is being | 187 |
| performed when that is not the fact. | 188 |
| Sec. 4722.04. (A) A home improvement contractor may take as a | 189 |
| down payment not more than ten per cent of the contract price | 190 |
| before the home improvement contractor's performance that is | 191 |
| required by the contract is completed, except a home improvement | 192 |
| contractor may take as a down payment not more than seventy-five | 193 |
| per cent of the total cost of any special order item that is | 194 |
| otherwise not returnable or usable before the home improvement | 195 |
| contractor's performance that is required by the contract is | 196 |
| completed. | 197 |
| (B) A home improvement contractor shall begin work on the | 198 |
| date or within the time period the contract specifies and shall | 199 |
| complete the home improvement pursuant to any agreed-upon | 200 |
| schedule unless delay is due to reasonable cause beyond the home | 201 |
| improvement contractor's control. | 202 |
| Sec. 4722.05. The failure of a home improvement contractor to | 203 |
| comply with sections 4722.02, 4722.03, and 4722.04 of the Revised | 204 |
| Code is an unfair or deceptive act or practice in violation of | 205 |
| section 1345.02 of the Revised Code. All powers and remedies | 206 |
| available to the attorney general to enforce sections 1345.01 to | 207 |
| 1345.13, except those powers and remedies available under section | 208 |
| 1345.02(E), of the Revised Code are available to the attorney | 209 |
| general to enforce sections 4722.02, 4722.03, and 4722.04 of the | 210 |
| Revised Code. The same remedies available to consumers under | 211 |
| section 1345.09 of the Revised Code to remedy violations of | 212 |
| section 1345.02 of the Revised Code are available to owners to | 213 |
| remedy the failure of a home improvement contractor to comply | 214 |
| with sections 4722.02, 4722.03, and 4722.04 of the Revised Code. | 215 |
| Sec. 4722.06. (A) No owner shall file a dwelling action or | 216 |
| commence an arbitration proceeding against a home improvement | 217 |
| contractor unless, at least thirty days before filing the action | 218 |
| or commencing the arbitration proceeding, the owner provides the | 219 |
| home improvement contractor with a written notice of the | 220 |
| construction defect that would be the basis of the dwelling action | 221 |
| or arbitration proceeding. The notice shall be in writing and | 222 |
| mailed, sent by telegram, delivered in person, or sent by any | 223 |
| means the home improvement contractor has indicated communications | 224 |
| may be sent, including facsimile transmission and electronic mail. | 225 |
| (B) After receiving a notice of defect pursuant to division | 226 |
| (A) of this section, the home improvement contractor shall provide | 227 |
| the owner with a good faith written response. The response shall | 228 |
| be delivered to the owner not later than seven days after the home | 229 |
| improvement contractor receives the notice described in division | 230 |
| (A) of this section. The response shall notify the owner whether | 231 |
| the home improvement contractor intends to remedy the construction | 232 |
| defect or contest the construction defect. If the home improvement | 233 |
| contractor elects to remedy the defect, the home improvement | 234 |
| contractor shall have thirty days from the date the home | 235 |
| improvement contractor received the notice described in division | 236 |
| (A) of this section to complete such remedy. If the home | 237 |
| improvement contractor does not remedy the defect within thirty | 238 |
| days after the delivery of the notice stating the election to | 239 |
| remedy the defect, the owner may file a dwelling action or | 240 |
| commence an arbitration proceeding. If the home improvement | 241 |
| contractor elects to contest the construction defect, the owner | 242 |
| can immediately file a dwelling action or commence an arbitration | 243 |
| proceeding. | 244 |
| (C) If a home improvement contractor files a mechanics lien | 245 |
| or commences any type of arbitration proceedings or legal action | 246 |
| against an owner, this section does not apply, and the owner | 247 |
| immediately may counterclaim or file a dwelling action or commence | 248 |
| an arbitration proceeding against the home improvement contractor. | 249 |
| (D) In the event that a home improvement contractor is | 250 |
| subject to the provisions of this section and the provisions of | 251 |
| Chapter 1312. of the Revised Code, the provisions of this section | 252 |
| shall control the actions of the owner and home improvement | 253 |
| contractor, and Chapter 1312. of the Revised Code shall not apply. | 254 |
| (E) This section does not apply to any dwelling action or | 255 |
| arbitration proceeding arising out of a construction defect where | 256 |
| that construction defect will jeopardize the welfare, health, or | 257 |
| safety of the owner or any other occupant of the residential | 258 |
| building or the residential building has been rendered | 259 |
| uninhabitable by the construction defect. | 260 |
| Sec. 4722.07. A home improvement contractor engaging in any | 261 |
| home improvement, the cost of which equals or exceeds one thousand | 262 |
| dollars, shall maintain general liability insurance in an | 263 |
| amount not less than two hundred fifty thousand dollars. | 264 |
| Sec. 4722.08. (A) Any instrumentality, as defined in division | 265 |
| (B)(6) of section 2981.01 of the Revised Code, of a home | 266 |
| improvement contractor convicted of an offense in connection with | 267 |
| a home improvement, shall be subject to the forfeiture provisions | 268 |
| of Chapter 2981. of the Revised Code. | 269 |
| (B) If a home improvement contractor is convicted of a | 270 |
| criminal offense in connection with a home improvement, the | 271 |
| sentencing court, when sentencing that home improvement | 272 |
| contractor, shall consider and specify a plan of restitution to | 273 |
| the owner of the property harmed by the offense pursuant to any | 274 |
| community control sanctions ordered pursuant to sections 2929.15 | 275 |
| to 2929.28 of the Revised Code. | 276 |