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Am. Sub. S. B. No. 275 As Passed by the SenateAs Passed by the Senate
127th General Assembly | Regular Session | 2007-2008 |
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Cosponsors:
Senators Coughlin, Grendell, Jacobson, Mumper, Padgett, Roberts, Stivers, Schaffer
A BILL
To enact
sections
4722.01 to 4722.08 of the Revised
Code
to
establish
laws governing the practices
of home
improvement
contractors and to provide
civil
remedies for home
owners who
are damaged
by a
home improvement contractor who
violates
the law.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections
4722.01, 4722.02, 4722.03, 4722.04,
4722.05, 4722.06,
4722.07, and
4722.08
of the
Revised
Code be
enacted to
read as follows:
Sec. 4722.01. As used in this chapter:
(A) "Construction defect" means a deficiency that arises
directly or indirectly from a home improvement.
(B) "Dwelling action" means any of the following actions,
brought against a home improvement contractor, for damages or the
loss of use of real property, caused by a construction defect:
(1) A civil action in contract or tort for damages or
indemnity;
(2) Any action brought pursuant to Chapter 1345. of the
Revised Code;
(3) Any action brought pursuant to this chapter.
(C) "Home improvement" means any repair, alteration, or
addition to any residential building, industrialized unit,
manufactured
home, or mobile home,
or to any dwelling unit in
any type of
structure. "Home
improvement" does not include any
of the
following:
(1) Construction of a new residential building,
industrialized unit, or manufactured home;
(2) Work performed on a structure that contains four or more
dwelling units, except for work on an individual dwelling unit
within that structure;
(3) Work performed on the common area of a condominium
property.
(D) "Home improvement contractor" means any person who
performs or offers to perform any home
improvement for
compensation.
(E) "Industrialized unit," "manufactured home," and
"residential building" have the same meanings as in section
3781.06 of the Revised Code.
(F) "Mobile home" has the meaning as in section 4501.01 of
the Revised Code.
(G) "Owner" means the person who contracts with a home
improvement contractor
for a home improvement. "Owner" may
include
the owner of the
property, a tenant who occupies the
dwelling unit
on which the
home improvement is performed, or a
person the owner
authorizes to act on the owner's behalf to
contract for a
home improvement, and any other person who
contracts for a
home improvement.
Sec. 4722.02. (A) No home improvement contractor shall
perform any
home improvement the cost of which equals or exceeds
one
thousand
dollars
unless that person enters into a written
contract with
the
owner. The contract shall include all
agreements and
conditions
related to the home improvement,
including all of the
following:
(1) The home improvement contractor's name, physical business
address,
business telephone number, taxpayer
identification
number, and physical home
address;
(2) The owner's name, address, and telephone number;
(3) The address of the property where the home improvement is
to be performed;
(4) A detailed description of the home improvement,
including
the goods and services to be furnished as part of the
home improvement;
(5) The date or time period the home improvement is to
begin
and the date or time period it is to be completed;
(6) The total cost of the home improvement;
(7) Any cost of installation, delivery, or other cost that
the total cost does not cover;
(8) The dated signatures of the owner and the home
improvement contractor;
(9) A notice of applicable right to cure provisions in
substantially the following language:
IN THE EVENT THAT THE HOME IMPROVEMENT THAT IS THE
SUBJECT
OF THIS CONTRACT RESULTS IN A CONSTRUCTION DEFECT, THE HOME
IMPROVEMENT
CONTRACTOR NAMED IN THIS CONTRACT WILL HAVE THE RIGHT
TO CURE THE
CONSTRUCTION DEFECT IN A MANNER CONSISTENT WITH
CHAPTER 4722. OF THE REVISED CODE IF
THE CONSTRUCTION DEFECT
ARISES FROM A HOME IMPROVEMENT. GENERALLY
THE RIGHT TO CURE
PROVISIONS PROVIDE THE HOME IMPROVEMENT CONTRACTOR THIRTY (30)
DAYS TO CURE ANY CONSTRUCTION DEFECT, BUT SEE THE APPLICABLE
SECTIONS OF THE REVISED CODE TO DETERMINE SPECIFIC TIME AND NOTICE
REQUIREMENTS."
(10) A notice stating whether or not the home improvement
contractor has
performance bonds or other insurance beyond the
insurance required
by section 4722.07 of the Revised Code that
will cover losses
incurred through defects or breach of contract
terms by the home improvement
contractor.
(B)(1) To determine the type of notice an owner requires when
the costs of a home improvement exceed the estimate provided
in
the contract, the contract shall include a statement in
substantially the following language:
IF AT ANY TIME A HOME IMPROVEMENT REQUIRES EXTRA COSTS
ABOVE
THE COST SPECIFIED OR ESTIMATED IN THE CONTRACT WHICH WERE
UNFORESEEN, BUT REASONABLY NECESSARY, AND THE
TOTAL OF
ALL EXTRA
COSTS TO DATE EXCEEDS TEN PER CENT OF THE
CONTRACT COST,
YOU
HAVE A RIGHT TO AN ESTIMATE OF THOSE EXCESS
COSTS BEFORE THE
HOME IMPROVEMENT
CONTRACTOR BEGINS WORK RELATED TO THOSE COSTS.
INITIAL YOUR
CHOICE
OF THE TYPE OF ESTIMATE YOU REQUIRE:
..... written estimate ..... oral estimate"
(2) If the total amount of unforeseen, but reasonably
necessary excess costs of a home improvement
at any time
exceeds
ten per cent of the cost estimated
or
specified in the
contract, prior to performing the work
related to
the excess
costs, the home improvement contractor shall provide an
owner
with the
type of
notice the owner has designated in the
contract.
(3) If the contract stipulates that the specified cost of the
home improvement is a firm price and the home improvement
contractor will not
charge the owner with any excess costs, the
home improvement contractor need not
comply with the notice
requirements of this division.
(4) An owner is not liable for any excess costs unless the
costs were unforeseen, but reasonably necessary, and unless the
home improvement
contractor complies with this section's notice
requirements.
Sec. 4722.03. No home improvement contractor shall do any
of
the following:
(A) Prior to commencing work related to the home improvement,
fail to enter into a written contract that complies
with this
chapter;
(B) After entering into a contract with an owner and prior to
commencing any work that is related to an excess
cost, fail to
provide an estimate of the excess costs as this
chapter requires;
(C) After entering into a contract with an owner, do any of
the following:
(1) Fail to disclose, prior to the owner's acceptance of any
goods or work related to an excess cost, that in failing to
approve an excess cost, completion of the work may not be possible
and a charge may be imposed for any disassembly, reassembly, or
partially completed work, which shall be directly related to the
actual labor or parts involved;
(2) Charge for any excess cost that the owner has not
approved;
(3) Represent that repairs or work have been performed when
such is not the fact;
(4) Fail to provide the owner, upon the owner's request, a
written itemized list
of repairs performed or services rendered,
including a list of
parts or materials and a statement of whether
they are used,
manufactured, or rebuilt, if not new, the cost to
the owner, the
amount charged for labor, and the identity of the
individual
performing the repair or service;
(5) Fail to tender to the owner any replaced parts, unless
the parts are to be rebuilt or sold by the home improvement
contractor, or returned
to the manufacturer in connection with a
warranted repair or
service, and the intended reuse or return is
made known to the
owner prior to commencing any repair or
services;
(6) Fail to provide a full refund for any goods or services
that the home improvement contractor has failed to deliver in
accordance with the
terms and conditions of the contract required
by section 4722.02
of the Revised Code and for which the home
improvement contractor has received
payment;
(7) Fail to provide to the owner, upon the owner's request,
a written, itemized receipt for any item of goods that are left
with, or turned over to, the home improvement contractor for
repair or services.
The receipt shall include all of the
following:
(a) The identity of the person who will perform the repair or
services;
(b) The name and dated signature of the person or
representative who actually accepts the goods;
(c) A description including make and model number or other
features that will reasonably identify the goods that are turned
over and the repair or services that are to be performed.
(D) Make the performance of any home improvement
contingent
upon a consumer's waiver of any rights this chapter
provides;
(E) Represent that repairs, services, or work is necessary
when such is not the fact;
(F) Represent that an item of goods or any part thereof that
is being inspected or diagnosed for a home improvement is in a
dangerous condition, or that its continued use may be harmful,
when such is not the fact;
(G) Materially understate or misstate the estimated cost of
the home improvement;
(H) Fraudulently misrepresent any aspect of the transaction
or the nature or the quality of the work or materials;
(I) Fail at the time any owner signs or initials any
document to provide the owner with a copy of the document;
(J) Fail to disclose to the owner prior to the commencement
of any repair or service, that any part of the repair or service
will be performed by a person other than the home improvement
contractor or
employee of the home improvement contractor if the
contract disclaims
any
warranty of the repair or service that
the other person
performs;
(K) Represent that repairs or services must be performed
away from the property on which the home improvement is being
performed when that is not the fact.
Sec. 4722.04. (A) A home improvement contractor may take as a
down payment not more than ten per cent of the contract price
before the home improvement contractor's performance that is
required by the contract is completed, except a home improvement
contractor may take as a down payment not more than seventy-five
per cent of the total cost of any special order item that is
otherwise not returnable or usable before the home improvement
contractor's performance that is required by the contract is
completed.
(B) A home improvement contractor shall begin work
on
the
date or within
the time period the contract specifies and
shall
complete the
home improvement pursuant to any
agreed-upon
schedule unless
delay is due to reasonable cause beyond the home
improvement contractor's control.
Sec. 4722.05. The failure of a home improvement contractor to
comply with sections 4722.02, 4722.03, and 4722.04 of the
Revised
Code is an unfair or deceptive act or practice in
violation of
section 1345.02 of the Revised Code. All powers and
remedies
available to the attorney general to enforce sections
1345.01 to
1345.13, except those powers and remedies available under section
1345.02(E), of the Revised Code are available to the
attorney
general
to enforce sections 4722.02, 4722.03, and 4722.04 of the
Revised
Code. The same remedies available to
consumers under
section
1345.09 of the Revised Code to remedy
violations of
section
1345.02 of the Revised Code are available to
owners to
remedy the
failure of a home improvement contractor to
comply
with sections
4722.02, 4722.03, and 4722.04 of the
Revised Code.
Sec. 4722.06. (A) No owner shall file a dwelling action or
commence an arbitration proceeding against a home improvement
contractor unless, at least thirty days before filing the action
or commencing the arbitration proceeding, the owner provides the
home improvement contractor with a written notice of the
construction defect that would be the basis of the dwelling action
or arbitration proceeding. The notice shall be in writing and
mailed, sent by telegram, delivered in person, or sent by any
means the home improvement contractor has indicated communications
may be sent, including facsimile transmission and electronic mail.
(B) After receiving a notice of defect pursuant to division
(A) of this section, the home improvement contractor shall provide
the owner with a good faith written response. The response shall
be delivered to the owner not later than seven days after the home
improvement contractor receives the notice described in division
(A) of this section. The response shall notify the owner whether
the home improvement contractor intends to remedy the construction
defect or contest the construction defect. If the home improvement
contractor elects to remedy the defect, the home improvement
contractor shall have thirty days from the date the home
improvement contractor received the notice described in division
(A) of this section to complete such remedy. If the home
improvement contractor does not remedy the defect within thirty
days after the delivery of the notice stating the election to
remedy the defect, the owner may file a dwelling action or
commence an arbitration proceeding. If the home improvement
contractor elects to contest the construction defect, the owner
can immediately file a dwelling action or commence an arbitration
proceeding.
(C) If a home improvement contractor files a mechanics lien
or commences any type of arbitration proceedings or legal action
against an owner, this section does not apply, and the owner
immediately may counterclaim or file a dwelling action or commence
an arbitration proceeding against the home improvement contractor.
(D) In the event that a home improvement contractor is
subject to the provisions of this section and the provisions of
Chapter 1312. of the Revised Code, the provisions of this section
shall control the actions of the owner and home improvement
contractor, and Chapter 1312. of the Revised Code shall not apply.
(E) This section does not apply to any dwelling action or
arbitration proceeding
arising out of a construction defect where
that construction
defect will jeopardize the welfare, health, or
safety of the owner
or any other occupant of the residential
building or the
residential building has been rendered
uninhabitable by the
construction defect.
Sec. 4722.07. A home improvement contractor engaging in any
home improvement, the cost of which equals or exceeds one thousand
dollars, shall
maintain
general liability
insurance in an
amount not less than
two
hundred
fifty thousand
dollars.
Sec. 4722.08. (A) Any instrumentality, as defined in division
(B)(6) of section 2981.01 of the Revised Code, of a home
improvement contractor
convicted of an offense in connection with
a home improvement,
shall be subject to the forfeiture provisions
of Chapter 2981. of
the Revised Code.
(B) If a home improvement contractor is convicted of a
criminal offense in
connection with a home improvement, the
sentencing court, when
sentencing that home improvement
contractor, shall consider and specify a plan of
restitution to
the owner of the property harmed by the offense
pursuant to any
community control sanctions ordered pursuant to
sections 2929.15
to 2929.28 of the Revised Code.
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