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.

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:

"RIGHT TO CURE

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:

"EXCESS COSTS

IF AT ANY TIME A HOME IMPROVEMENT REQUIRES EXTRA COSTS ABOVE THE COST SPECIFIED OR ESTIMATED IN THE CONTRACT THAT 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 division (B) of this section.

(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 is 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 of the Revised Code, except those powers and remedies available under division (E) of section 1345.02 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, 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 if 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.