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| To amend section 1345.01 and to enact sections | 1 |
| 4722.01 to 4722.06 of the Revised Code to make | 2 |
| changes relative to residential construction and | 3 |
| the Consumer Sales Practices Act and to establish | 4 |
| laws governing the practices of home construction | 5 |
| service suppliers. | 6 |
| Section 1. That section 1345.01 be amended and sections | 7 |
| 4722.01, 4722.02, 4722.03, 4722.04, 4722.05, and 4722.06 of the | 8 |
| Revised Code be enacted to read as follows: | 9 |
| Sec. 1345.01. As used in sections 1345.01 to 1345.13 of the | 10 |
| Revised Code: | 11 |
| (A) "Consumer transaction" means a sale, lease, assignment, | 12 |
| award by chance, or other transfer of an item of goods, a service, | 13 |
| a franchise, or an intangible, to an individual for purposes that | 14 |
| are primarily personal, family, or household, or solicitation to | 15 |
| supply any of these things. "Consumer transaction" does not | 16 |
| include transactions between persons, defined in sections 4905.03 | 17 |
| and 5725.01 of the Revised Code, and their customers, except for | 18 |
| transactions involving a loan made pursuant to sections 1321.35 to | 19 |
| 1321.48 of the Revised Code and transactions in connection with | 20 |
| residential mortgages between loan officers, mortgage brokers, or | 21 |
| nonbank mortgage lenders and their customers; transactions | 22 |
| involving a construction contract of a one-, two-, or three-family | 23 |
| dwelling; transactions between certified public accountants or | 24 |
| public accountants and their clients; transactions between | 25 |
| attorneys, physicians, or dentists and their clients or patients; | 26 |
| and transactions between veterinarians and their patients that | 27 |
| pertain to medical treatment but not ancillary services. | 28 |
| (B) "Person" includes an individual, corporation, government, | 29 |
| governmental subdivision or agency, business trust, estate, trust, | 30 |
| partnership, association, cooperative, or other legal entity. | 31 |
| (C) "Supplier" means a seller, lessor, assignor, franchisor, | 32 |
| or other person engaged in the business of effecting or soliciting | 33 |
| consumer transactions, whether or not the person deals directly | 34 |
| with the consumer. If the consumer transaction is in connection | 35 |
| with a residential mortgage, "supplier" does not include an | 36 |
| assignee or purchaser of the loan for value, except as otherwise | 37 |
| provided in section 1345.091 of the Revised Code. For purposes of | 38 |
| this division, in a consumer transaction in connection with a | 39 |
| residential mortgage, "seller" means a loan officer, mortgage | 40 |
| broker, or nonbank mortgage lender. | 41 |
| (D) "Consumer" means a person who engages in a consumer | 42 |
| transaction with a supplier. | 43 |
| (E) "Knowledge" means actual awareness, but such actual | 44 |
| awareness may be inferred where objective manifestations indicate | 45 |
| that the individual involved acted with such awareness. | 46 |
| (F) "Natural gas service" means the sale of natural gas, | 47 |
| exclusive of any distribution or ancillary service. | 48 |
| (G) "Public telecommunications service" means the | 49 |
| transmission by electromagnetic or other means, other than by a | 50 |
| telephone company as defined in section 4927.01 of the Revised | 51 |
| Code, of signs, signals, writings, images, sounds, messages, or | 52 |
| data originating in this state regardless of actual call routing. | 53 |
| "Public telecommunications service" excludes a system, including | 54 |
| its construction, maintenance, or operation, for the provision of | 55 |
| telecommunications service, or any portion of such service, by any | 56 |
| entity for the sole and exclusive use of that entity, its parent, | 57 |
| a subsidiary, or an affiliated entity, and not for resale, | 58 |
| directly or indirectly; the provision of terminal equipment used | 59 |
| to originate telecommunications service; broadcast transmission by | 60 |
| radio, television, or satellite broadcast stations regulated by | 61 |
| the federal government; or cable television service. | 62 |
| (H)(1) "Loan officer" means an individual who for | 63 |
| compensation or gain, or in anticipation of compensation or gain, | 64 |
| takes or offers to take a residential mortgage loan application; | 65 |
| assists or offers to assist a buyer in obtaining or applying to | 66 |
| obtain a residential mortgage loan by, among other things, | 67 |
| advising on loan terms, including rates, fees, and other costs; | 68 |
| offers or negotiates terms of a residential mortgage loan; or | 69 |
| issues or offers to issue a commitment for a residential mortgage | 70 |
| loan. "Loan officer" also includes a loan originator as defined in | 71 |
| division (E)(1) of section 1322.01 of the Revised Code. | 72 |
| (2) "Loan officer" does not include an employee of a bank, | 73 |
| savings bank, savings and loan association, credit union, or | 74 |
| credit union service organization organized under the laws of this | 75 |
| state, another state, or the United States; an employee of a | 76 |
| subsidiary of such a bank, savings bank, savings and loan | 77 |
| association, or credit union; or an employee of an affiliate that | 78 |
| (a) controls, is controlled by, or is under common control with, | 79 |
| such a bank, savings bank, savings and loan association, or credit | 80 |
| union and (b) is subject to examination, supervision, and | 81 |
| regulation, including with respect to the affiliate's compliance | 82 |
| with applicable consumer protection requirements, by the board of | 83 |
| governors of the federal reserve system, the comptroller of the | 84 |
| currency, the office of thrift supervision, the federal deposit | 85 |
| insurance corporation, or the national credit union | 86 |
| administration. | 87 |
| (I) "Residential mortgage" or "mortgage" means an obligation | 88 |
| to pay a sum of money evidenced by a note and secured by a lien | 89 |
| upon real property located within this state containing two or | 90 |
| fewer residential units or on which two or fewer residential units | 91 |
| are to be constructed and includes such an obligation on a | 92 |
| residential condominium or cooperative unit. | 93 |
| (J)(1) "Mortgage broker" means any of the following: | 94 |
| (a) A person that holds that person out as being able to | 95 |
| assist a buyer in obtaining a mortgage and charges or receives | 96 |
| from either the buyer or lender money or other valuable | 97 |
| consideration readily convertible into money for providing this | 98 |
| assistance; | 99 |
| (b) A person that solicits financial and mortgage information | 100 |
| from the public, provides that information to a mortgage broker or | 101 |
| a person that makes residential mortgage loans, and charges or | 102 |
| receives from either of them money or other valuable consideration | 103 |
| readily convertible into money for providing the information; | 104 |
| (c) A person engaged in table-funding or warehouse-lending | 105 |
| mortgage loans that are residential mortgage loans. | 106 |
| (2) "Mortgage broker" does not include a bank, savings bank, | 107 |
| savings and loan association, credit union, or credit union | 108 |
| service organization organized under the laws of this state, | 109 |
| another state, or the United States; a subsidiary of such a bank, | 110 |
| savings bank, savings and loan association, or credit union; an | 111 |
| affiliate that (a) controls, is controlled by, or is under common | 112 |
| control with, such a bank, savings bank, savings and loan | 113 |
| association, or credit union and (b) is subject to examination, | 114 |
| supervision, and regulation, including with respect to the | 115 |
| affiliate's compliance with applicable consumer protection | 116 |
| requirements, by the board of governors of the federal reserve | 117 |
| system, the comptroller of the currency, the office of thrift | 118 |
| supervision, the federal deposit insurance corporation, or the | 119 |
| national credit union administration; or an employee of any such | 120 |
| entity. | 121 |
| (K) "Nonbank mortgage lender" means any person that engages | 122 |
| in a consumer transaction in connection with a residential | 123 |
| mortgage, except for a bank, savings bank, savings and loan | 124 |
| association, credit union, or credit union service organization | 125 |
| organized under the laws of this state, another state, or the | 126 |
| United States; a subsidiary of such a bank, savings bank, savings | 127 |
| and loan association, or credit union; or an affiliate that (1) | 128 |
| controls, is controlled by, or is under common control with, such | 129 |
| a bank, savings bank, savings and loan association, or credit | 130 |
| union and (2) is subject to examination, supervision, and | 131 |
| regulation, including with respect to the affiliate's compliance | 132 |
| with applicable consumer protection requirements, by the board of | 133 |
| governors of the federal reserve system, the comptroller of the | 134 |
| currency, the office of thrift supervision, the federal deposit | 135 |
| insurance corporation, or the national credit union | 136 |
| administration. | 137 |
| (L) For purposes of divisions (H), (J), and (K) of this | 138 |
| section: | 139 |
| (1) "Control" of another entity means ownership, control, or | 140 |
| power to vote twenty-five per cent or more of the outstanding | 141 |
| shares of any class of voting securities of the other entity, | 142 |
| directly or indirectly or acting through one or more other | 143 |
| persons. | 144 |
| (2) "Credit union service organization" means a CUSO as | 145 |
| defined in 12 C.F.R. 702.2. | 146 |
| Sec. 4722.01. As used in this chapter: | 147 |
| (A) "Commencement" means the date on which all parties have | 148 |
| signed a home construction service contract. | 149 |
| (B) "Cost–plus contract" means a contract entered into | 150 |
| between an owner and a home construction service supplier under | 151 |
| which payment to the supplier is based on the cost of a product | 152 |
| plus the supplier's rate for labor to install the product. | 153 |
| (C) "Home construction service" means the construction of a | 154 |
| new residential building or the substantial rehabilitation of a | 155 |
| residential building. "Home construction service" does not include | 156 |
| construction performed on a structure that contains four or more | 157 |
| dwelling units, except for work on an individual dwelling unit | 158 |
| within that structure, or construction performed on the common | 159 |
| area of a condominium property. | 160 |
| (D) "Home construction service contract" means a contract | 161 |
| between an owner and a supplier to perform home construction | 162 |
| services, including services rendered based on a cost-plus | 163 |
| contract. | 164 |
| (E) "Home construction service supplier" or "supplier" means | 165 |
| a person who provides home construction services for compensation. | 166 |
| (F) "Owner" means the person who contracts with a home | 167 |
| construction service supplier. "Owner" may include the owner of | 168 |
| the property, a tenant who occupies the dwelling unit on which the | 169 |
| home construction service is performed, or a person the owner | 170 |
| authorizes to act on the owner's behalf to contract for a home | 171 |
| construction service, and any other person who contracts for a | 172 |
| home construction service. | 173 |
| (G) "Residential building" means a one-, two-, or | 174 |
| three-family dwelling and any accessory construction incidental to | 175 |
| the dwelling. "Residential building" does not include any of the | 176 |
| following: | 177 |
| (1) An industrialized unit as described in section 3781.06 of | 178 |
| the Revised Code; | 179 |
| (2) A manufactured home as described in section 3781.06 of | 180 |
| the Revised Code; | 181 |
| (3) A mobile home as described in section 4501.01 of the | 182 |
| Revised Code. | 183 |
| (H) "Substantial rehabilitation" means rehabilitation, | 184 |
| repair, or alteration of at least thirty per cent of the square | 185 |
| footage of a one-, two-, or three-family dwelling. | 186 |
| (I) "Workmanlike manner" means the home construction service | 187 |
| supplier has engaged in construction that meets or exceeds the | 188 |
| minimum quantifiable standards promulgated by a local home | 189 |
| builders association. | 190 |
| Sec. 4722.02. (A) Except as provided in division (C) of this | 191 |
| section, no home construction service supplier shall perform any | 192 |
| home construction service the cost of which equals or exceeds one | 193 |
| thousand dollars unless that person enters into a written contract | 194 |
| with the owner. The contract shall include all agreements and | 195 |
| conditions related to the home construction service, including all | 196 |
| of the following: | 197 |
| (1) The supplier's name, physical business address, business | 198 |
| telephone number, and taxpayer identification number; | 199 |
| (2) The owner's name, address, and telephone number; | 200 |
| (3) The address or location of the property where the home | 201 |
| construction service is to be performed; | 202 |
| (4) A general description of the home construction service, | 203 |
| including the goods and services to be furnished as part of the | 204 |
| service; | 205 |
| (5) The anticipated date or time period the home construction | 206 |
| service is to begin and the anticipated date or time period it is | 207 |
| to be completed; | 208 |
| (6) The total estimated cost of the home construction | 209 |
| service; | 210 |
| (7) Any cost of installation, delivery, or other cost that | 211 |
| the total estimated cost does not cover; | 212 |
| (8) The dated signatures of the owner and the supplier. | 213 |
| (B)(1) If the total amount of unforeseen, but reasonably | 214 |
| necessary, excess costs of a home construction service at any time | 215 |
| exceeds ten per cent of the cost estimated or specified in the | 216 |
| contract, prior to performing the work related to the excess | 217 |
| costs, the home construction service supplier shall provide an | 218 |
| owner with a notice that contains a written or oral estimate, | 219 |
| depending on which type the owner has designated in the contract. | 220 |
| (2) To determine the type of notice an owner requires when | 221 |
| the costs of a home construction service exceed the estimate | 222 |
| provided in the contract, the contract shall include a statement | 223 |
| in substantially the following language: | 224 |
| "EXCESS COSTS | 225 |
| IF AT ANY TIME A HOME CONSTRUCTION SERVICE REQUIRES EXTRA | 226 |
| COSTS ABOVE THE COST SPECIFIED OR ESTIMATED IN THE CONTRACT THAT | 227 |
| WERE UNFORESEEN, BUT REASONABLY NECESSARY, AND THE TOTAL OF ALL | 228 |
| EXTRA COSTS TO DATE EXCEEDS TEN PER CENT OF THE CONTRACT COST, YOU | 229 |
| HAVE A RIGHT TO AN ESTIMATE OF THOSE EXCESS COSTS BEFORE THE HOME | 230 |
| CONSTRUCTION SERVICE SUPPLIER BEGINS WORK RELATED TO THOSE COSTS. | 231 |
| INITIAL YOUR CHOICE OF THE TYPE OF ESTIMATE YOU REQUIRE: | 232 |
| ..... written estimate ..... oral estimate" | 233 |
| (3) If the contract stipulates that the specified cost of the | 234 |
| home construction service is a firm price and the home | 235 |
| construction service supplier will not charge the owner with any | 236 |
| excess costs, the home construction service supplier need not | 237 |
| comply with the notice requirements of this division. | 238 |
| (C) A home construction service supplier who enters into a | 239 |
| cost-plus contract with an owner for a home construction service | 240 |
| need not comply with the requirements in divisions (A) and (B) of | 241 |
| this section. | 242 |
| Sec. 4722.03. (A) No home construction service supplier shall | 243 |
| do any of the following: | 244 |
| (1) Prior to commencing work related to the home construction | 245 |
| service, fail to enter into a written contract that complies with | 246 |
| this chapter; | 247 |
| (2) After entering into a contract with an owner and prior to | 248 |
| commencing any work that is related to an excess cost, fail to | 249 |
| provide an estimate of the excess costs as this chapter requires; | 250 |
| (3) After entering into a contract with an owner, do any of | 251 |
| the following: | 252 |
| (a) Fail to disclose, prior to the owner's acceptance of any | 253 |
| goods or work related to an excess cost, that in failing to | 254 |
| approve an excess cost, completion of the work may not be possible | 255 |
| and a charge may be imposed for any disassembly, reassembly, or | 256 |
| partially completed work, which shall be directly related to the | 257 |
| actual labor or parts involved; | 258 |
| (b) Charge for any excess cost that the owner has not | 259 |
| approved; | 260 |
| (c) Represent that repairs or work have been performed when | 261 |
| such is not the fact; | 262 |
| (d) Fail to perform the home construction service in a | 263 |
| competent, workmanlike manner as defined in section 4722.01 of the | 264 |
| Revised Code; | 265 |
| (e) Fail to tender to the owner, within a reasonable time and | 266 |
| upon the owner's request, any replaced parts, unless the parts are | 267 |
| to be rebuilt or sold by the home construction service provider, | 268 |
| or returned to the manufacturer in connection with a warranted | 269 |
| repair or service, and the intended reuse or return is made known | 270 |
| to the owner prior to commencing any repair or services; | 271 |
| (f) Fail to provide a full refund within a reasonable time | 272 |
| period for any goods or services that the home construction | 273 |
| service supplier has failed to deliver in accordance with the | 274 |
| terms and conditions of the contract required by section 4722.02 | 275 |
| of the Revised Code and for which the supplier has received | 276 |
| payment; | 277 |
| (g) Fail to provide to the owner, within a reasonable time | 278 |
| and upon the owner's request, a written, itemized receipt for any | 279 |
| item of goods that is left with, or turned over to, the home | 280 |
| construction service supplier for repair or services. The receipt | 281 |
| shall include all of the following: | 282 |
| (i) The identity of the person who will perform the repair or | 283 |
| services; | 284 |
| (ii) The name and dated signature of the person or | 285 |
| representative who actually accepts the goods; | 286 |
| (iii) A description, including make and model number or other | 287 |
| features that will reasonably identify the goods that are turned | 288 |
| over, and the repair or services that are to be performed. | 289 |
| (4) Make the performance of any home construction service | 290 |
| contingent upon a consumer's waiver of any rights this chapter | 291 |
| provides; | 292 |
| (5) Represent that repairs, services, or work is necessary to | 293 |
| comply with the residential building code when such is not the | 294 |
| fact; | 295 |
| (6) Represent that an item of goods or any part thereof that | 296 |
| is being inspected or diagnosed for a home construction service is | 297 |
| in a dangerous condition, or that its continued use may be | 298 |
| harmful, when such is not the fact; | 299 |
| (7) Intentionally understate or intentionally misstate the | 300 |
| estimated cost of the home construction service; | 301 |
| (8) Fraudulently misrepresent any aspect of the transaction | 302 |
| or the nature or the quality of the work or materials; | 303 |
| (9) Fail at the time any owner signs or initials any document | 304 |
| to provide the owner with a copy of the document within a | 305 |
| reasonable time period; | 306 |
| (10) Fail to disclose to the owner prior to the commencement | 307 |
| of any repair or service that any part of the repair or service | 308 |
| will be performed by a person other than the home construction | 309 |
| service supplier or employee of the supplier if the contract | 310 |
| disclaims any warranty of the repair or service that the other | 311 |
| person performs; | 312 |
| (11) Represent that repairs or services must be performed | 313 |
| away from the property on which the home construction service is | 314 |
| being performed when that is not the fact. | 315 |
| (B) A home construction service supplier who enters into a | 316 |
| cost-plus contract with an owner for a home construction service | 317 |
| need not comply with the requirements regarding excess costs | 318 |
| provided in this section. | 319 |
| Sec. 4722.04. A home construction service supplier may take | 320 |
| as a down payment not more than ten per cent of the contract price | 321 |
| before the supplier's performance that is required by the contract | 322 |
| is completed, except a supplier may take as a down payment not | 323 |
| more than seventy-five per cent of the total cost of any special | 324 |
| order item that is otherwise not returnable or usable before the | 325 |
| supplier's performance that is required by the contract is | 326 |
| completed. This section does not apply to a home construction | 327 |
| service supplier who enters into a cost-plus contract. A supplier | 328 |
| may accept payments from a construction loan in connection with a | 329 |
| home construction service contract. | 330 |
| Sec. 4722.05. (A) All powers and remedies available to the | 331 |
| attorney general provided in sections 1345.05 to 1345.07 of the | 332 |
| Revised Code to enforce sections 1345.01 to 1345.13 of the Revised | 333 |
| Code are available to the attorney general to enforce this | 334 |
| chapter. | 335 |
| Sec. 4722.06. For a violation of Chapter 4722. of the | 336 |
| Revised Code, an owner has a cause of action and is entitled to | 337 |
| relief as follows: | 338 |
| (A) Where the violation was an act prohibited by section | 339 |
| 4722.02, 4722.03, or 4722.04 of the Revised Code, the owner may, | 340 |
| in an individual action, rescind the transaction or recover the | 341 |
| owner's actual economic damages plus an amount not exceeding five | 342 |
| thousand dollars in noneconomic damages. | 343 |
| (B) In any action for rescission, revocation of the | 344 |
| transaction must occur within a reasonable time after the owner | 345 |
| discovers or should have discovered the ground for it and before | 346 |
| any substantial change in condition of the subject of the | 347 |
| transaction. | 348 |
| (C) Any owner may seek a declaratory judgment, an injunction, | 349 |
| or other appropriate relief against an act or practice that | 350 |
| violates this chapter. | 351 |
| (D) The court may award to the prevailing party a reasonable | 352 |
| attorney's fee limited to the work reasonably performed, if either | 353 |
| of the following apply: | 354 |
| (1) The owner complaining of the act or practice that | 355 |
| violated this chapter has brought or maintained an action that is | 356 |
| groundless, and the owner filed or maintained the action in bad | 357 |
| faith; | 358 |
| (2) The home construction service supplier has knowingly | 359 |
| committed an act or practice that violates this chapter. | 360 |
| (E) As used in this section, "actual economic damages" means | 361 |
| damages for direct, incidental, or consequential pecuniary losses | 362 |
| resulting from a violation of Chapter 4722. of the Revised Code | 363 |
| and does not include damages for noneconomic loss as defined in | 364 |
| section 2315.18 of the Revised Code. | 365 |
| (F) Nothing in this section shall preclude an owner from also | 366 |
| proceeding with a cause of action under any other theory of law. | 367 |
| Section 2. That existing section 1345.01 of the Revised Code | 368 |
| is hereby repealed. | 369 |