Bill Text: HI HB1809 | 2020 | Regular Session | Amended
Bill Title: Relating To Consumer Protection.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2020-02-25 - The committee(s) on CPC recommend(s) that the measure be deferred. [HB1809 Detail]
Download: Hawaii-2020-HB1809-Amended.html
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
1809 |
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THIRTIETH LEGISLATURE, 2020 |
H.D. 1 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO CONSUMER PROTECTION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that, after significant weather events, contractors often swarm into neighborhoods with promises to provide homeowners new roofs "at no cost to them", convincing homeowners to sign binding contracts to replace the entire roof. In cases where there has been substantial damage requiring a complete roof replacement, this not a problem; however, in many instances a subsequent inspection by a qualified adjuster reveals that the roof sustained minimal or no damage, and the insurer must limit the claim to the cost to repair the actual damage, if any. In those situations, homeowners find themselves responsible for the cost with no recourse.
The legislature further finds that following catastrophic storms, when contractors may be in short supply, unscrupulous individuals may take advantage of such circumstances and represent themselves as insurance claims experts who can obtain insurance proceeds to fix a house, even when the individuals are not licensed independent adjusters. The legislature believes that stronger consumer protection measures must be taken to protect Hawaii residents from this kind of unscrupulous predatory behavior.
Accordingly, the purpose of this Act is to protect homeowners from unsolicited offers to repair their homes predicated on the receipt of insurance proceeds by:
(1) Prohibiting residential contractors from offering to pay, in any monetary form, a homeowners insurance deductible as an incentive to encourage the homeowner to hire the contractor;
(2) Allowing an insured to rescind a contract to repair or replace roof systems or other exterior work within five business days of receiving notice from a homeowners insurer that all or part of the claim or contract is not a covered loss under a homeowners insurance policy; and
(3) Prohibiting a contractor from knowingly and intentionally acting as a public adjuster.
SECTION 2. Chapter 444, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§444- Residential
contractors; roof systems; homeowners insurance policies; deductibles;
rescission. (a) A residential contractor shall not advertise
or promise to pay or rebate any portion, including the entire portion, of any homeowners
insurance deductible as an inducement to the sale of goods or services. As used in this subsection, a promise to pay
or rebate includes granting any allowance against the fees to be charged;
paying to the insured any form of compensation; or providing to the insured any
gift, prize, bonus, coupon, credit, referral fee, or any other item of monetary
value for any reason, including but not limited to permitting the residential
contractor to display a sign or any other type of advertisement at the
insured's premises.
(b) A person who has entered into a written
contract with a residential contractor to provide goods and services to be paid
from the proceeds of a homeowners insurance policy may rescind the contract
prior to midnight on the fifth business day after the insured has been notified
by the homeowners insurer that all or any part of the claim or contract is not
a covered loss under the homeowners insurance policy. Rescission is evidenced by the insured giving
written notice of rescission to the residential contractor at the address
stated in the contract; provided that if notice of rescission is given by mail,
the notice shall be effective upon deposit in the United States mail, postage
prepaid and properly addressed to the residential contractor. Notice of rescission need not take any
particular form and is sufficient if the notice indicates, by any form of
written expression, the intention of the insured not to be bound by the
contract; provided that any notice of rescission shall include a copy of the
notice by the homeowners insurer that all or any part of the claim or contract
is not a covered loss under the homeowners insurance policy.
(c) Within ten days of the rescission of a
contract pursuant to subsection (b), the residential contractor shall tender to
the insured of the residential real estate any payments, partial payments, or
deposits made and any note or any other evidence of indebtedness; provided that
if the residential contractor has performed any emergency services, which have
been acknowledged by the insured in writing as necessary to prevent damage to
the residential real estate premises, the residential contractor shall be
entitled to the reasonable value of such services. Any provision in a contract for goods or
services to be paid from the proceeds of a homeowners insurance policy that
requires the payment of any fee for anything except emergency services shall
not be enforceable against an insured who has rescinded a contract pursuant to
subsection (b).
(d) A contract entered into pursuant to
subsection (b) shall contain the following notices, in a type size no smaller
than ten-point boldface type:
(1) A notice of
right to rescind form in substantially the following form:
"You may rescind this
contract at any time before midnight on the fifth business day after you have
been notified by your insurer that all or any part of the claim or contract is
not a covered loss under your homeowners' insurance policy. See attached notice of rescission form for an
explanation of this right."; and
(2) A notice of rescission
form, in duplicate, attached to the contract and easily detachable, completed
with the name of the residential contractor and the address where the notice of
cancellation is to be delivered, in substantially the following form:
"NOTICE OF
RESCISSION
If you are notified by your
insurer that all or any part of the claim or contract is not a covered loss
under your homeowners insurance policy, you may rescind the contract by mailing
or delivering a signed and dated copy of this rescission notice or any other
written notice to [name of residential contractor] at [address of residential
contractor's place of business] at any time prior to midnight on the fifth
business day after you have received such notice from your insurer. If you rescind, any payment made by you under
the contract, except for certain emergency work already performed by the
residential contractor, will be returned to you within ten business days
following receipt by the residential contractor of your rescission notice.
I
HEREBY RESCIND THIS TRANSACTION
____________________
(Date)
________________________________
(Insured's
signature)"
(e) A residential contractor shall not represent
or negotiate, or offer or advertise to represent or negotiate, on behalf of an insured
on any homeowners insurance claim in connection with the repair or replacement
of roof systems, or the performance of any other exterior repair, replacement,
construction, or reconstruction work.
(f) Any violation of this section by a
residential contractor shall be considered an unfair method of competition and
unfair or deceptive act or practice under chapter 480.
(g) For purposes of this section:
"Residential
contractor" means a person or entity in the business of contracting or
offering to contract with an insured who is an owner or possessor of
residential real estate to repair or replace roof systems or perform any other
exterior repair, replacement, construction, or reconstruction work on
residential real estate.
"Residential real
estate" means a new or existing building constructed for habitation by one
to four families, including detached garages.
"Roof system" includes
roof coverings, roof sheathing, roof weatherproofing, and insulation."
SECTION 3. Section 444-17, Hawaii Revised Statutes, is amended to read as follows:
"§444-17 Revocation, suspension, and renewal of licenses. In addition to any other actions authorized by law, the board may revoke any license issued pursuant to this section, or suspend the right of a licensee to use a license, or refuse to renew a license for any cause authorized by law, including:
(1) Any dishonest, fraudulent, or deceitful act as a contractor that causes substantial damage to another;
(2) Engaging in any unfair or deceptive act or practice as prohibited by section 480-2;
(3) Abandonment of any construction project or operation without reasonable or legal excuse;
(4) Wilful diversion of funds or property received for prosecution or completion of a specific construction project or operation, or for a specified purpose in the prosecution or completion of any construction project or operation, and the use thereof for any other purpose;
(5) Wilful departure from, or wilful disregard of plans or specifications in any material respect without consent of the owner or the owner's duly authorized representative, that is prejudicial to a person entitled to have the construction project or operation completed in accordance with those plans and specifications;
(6) Wilful violation of any law of the State, or any county, relating to building, including any violation of any applicable rule of the department of health, or of any applicable safety or labor law;
(7) Failure to make and keep records showing all contracts, documents, records, receipts, and disbursements by a licensee of all the licensee's transactions as a contractor for a period of not less than three years after completion of any construction project or operation to which the records refer or to permit inspection of those records by the board;
(8) When the licensee being a partnership or a joint venture permits any partner, member, or employee of the partnership or joint venture who does not hold a license to have the direct management of the contracting business thereof;
(9) When the licensee being a corporation permits any officer or employee of the corporation who does not hold a license to have the direct management of the contracting business thereof;
(10) Misrepresentation of a material fact by an applicant in obtaining a license;
(11) Failure of a licensee to complete in a material respect any construction project or operation for the agreed price if the failure is without legal excuse;
(12) Wilful failure in any material respect to comply with this chapter or the rules adopted pursuant thereto;
(13) Wilful failure or refusal to prosecute a project or operation to completion with reasonable diligence;
(14) Wilful failure to pay when due a debt incurred for services or materials rendered or purchased in connection with the licensee's operations as a contractor when the licensee has the ability to pay or when the licensee has received sufficient funds therefor as payment for the particular operation for which the services or materials were rendered or purchased;
(15) The false denial of any debt due or the validity of the claim therefor with intent to secure for a licensee, the licensee's employer, or other person, any discount of the debt or with intent to hinder, delay, or defraud the person to whom the debt is due;
(16) Failure to secure or maintain workers' compensation insurance, unless the licensee is authorized to act as a self-insurer under chapter 386 or is excluded from the requirements of chapter 386;
(17) Entering into a contract with an unlicensed contractor involving work or activity for the performance of which licensing is required under this chapter;
(18) Performing service on a residential or commercial air conditioner using CFCs without using refrigerant recovery and recycling equipment;
(19) Performing service on any air conditioner after January 1, 1994, without successful completion of an appropriate training course in the recovery and recycling of CFC and HCFC refrigerants, which included instruction in the proper use of refrigerant recovery and recycling equipment that is certified by Underwriters Laboratories, Incorporated;
(20) Violating chapter 342C;
(21) Failure to pay
delinquent taxes, interest, and penalties assessed under chapter 237 that
relate to the business of contracting, or to comply with the terms of a
conditional payment plan with the department of taxation for the payment of
such delinquent taxes, interest, and penalties; [and]
(22) Knowingly or
intentionally employing a person to perform work under a contract subject to
chapter 104 who is not eligible to work in the United States under federal law[.];
and
(23) Knowingly or intentionally acting as a public adjuster as defined in section 431:9-105."
SECTION 4. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 5. This Act shall take effect on July 1, 2050.
Report Title:
Consumer Protection; Residential Contractors; Roof Systems; Homeowners Insurance; Deductibles; Right of Rescission
Description:
Prohibits residential contractors from offering to pay, in any monetary form, a homeowners insurance deductible as an incentive to encourage the homeowner to hire the contractor. Allows an insured to rescind a contract to repair or replace roof systems or other exterior work within five business days of receiving notice from a homeowners insurer that all or part of the claim or contract is not a covered loss under an homeowners insurance policy. Authorizes the Contractors License Board to suspend, revoke, or refuse to renew the license of any contractor acting as a public adjuster. Effective 7/1/2050. (HD1)
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
