HB840: relative to home improvement contracts.

HB 840 – AS INTRODUCED

2007 SESSION

07-0898

10/04

HOUSE BILL 840

AN ACT relative to home improvement contracts.

SPONSORS: Rep. Infantine, Hills 13

COMMITTEE: Commerce

ANALYSIS

This bill establishes requirements for home contractors and consumers of home contractor services, and establishes criminal and civil penalties for violations of a home improvement contract.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

07-0898

10/04

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Seven

AN ACT relative to home improvement contracts.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 New Chapter; Home Improvement Contracts. Amend RSA by inserting after chapter 359-H the following new chapter:

CHAPTER 359-I

HOME IMPROVEMENT CONTRACTS

359-I:1 Definitions. In this chapter:

I. “Person” shall include natural persons, corporations, trusts, partnerships, incorporated or unincorporated associations, and any other legal entity.

II. “Home improvement contract” means an agreement for the performance of home improvement, including all labor, goods, and services under such agreement.

III. “Home improvement contractor” or “contractor” means any person who owns or operates a business who, personally or through others, undertakes, offers to undertake, purports to have the capacity to undertake, or submits a bid for home improvement.

IV. “Knowing” or “knowingly” means that a person, with respect to information:

(a) Has actual knowledge of the information;

(b) Acts in deliberate ignorance of the truth or falsity of the information; or

(c) Acts in reckless disregard of the truth or falsity of the information. No proof of specific intent to defraud is required for an act to be knowing.

359-I:2 Home Improvement Contracts.

I. A contractor shall not make, permit, or cause any practice that:

(a) Fails to perform the services promised under a contract in a timely, competent, or workmanlike manner; or

(b) Has the effect of creating or maintaining a fraud.

II. No contract covering property located in this state shall provide that:

(a) The consumer is not a party to the contract;

(b) The contractor has no liability to the consumer;

(c) The consumer does not have the right to bring an action to enforce the terms of the contract or otherwise challenge the denial of a claim which the consumer believes is wrongful, subject to the provisions of any alternative dispute resolution procedure specified in the contract; or

(d) Any civil action or alternative dispute resolution procedure brought in connection with the contract shall be brought in the courts of a jurisdiction other than New Hampshire.

III. Any contract for home improvement services between a home improvement contractor and a person which requires an initial down payment shall require a written agreement. The written agreement shall include at least the following information:

(a) The consumer’s name, telephone number, and the address of the residential structure that is the subject of the home improvement.

(b) The name and street address of the home improvement contractor and the number of any license or permit issued to the home improvement contractor by the electrician’s board pursuant to RSA 319-C, the plumbers’ licensing and regulation board pursuant to RSA 329-A, the water well board pursuant to RSA 482-B, or the department of environmental services pursuant to RSA 485-A, and any other applicable license or permit.

(c) The name and telephone number of any agent to whom consumer problems and inquiries can be directed.

(d) The date the home improvement contract was submitted to the consumer and any time limitation on the consumer’s acceptance of the home improvement contract.

(e) A detailed description of the proposed home improvements.

(f) The estimated date of commencement of work and the estimated date when the work will be substantially completed and any contingencies that would materially change the approximate completion date.

(g) The home improvement contract price or basis for charges.

(h) The amount of the initial down payment and the schedule of payments, which may stipulate additional deposits required to initiate the ordering of materials.

(i) A written change order statement for any alteration or deviation from the contractual specifications that increases the contract price.

(j) A statement describing the extent of the liability insurance maintained by the home improvement contractor or a disclosure that the home improvement contractor does not have liability insurance.

(k) A statement specifying whether, and to what extent, any warranty applies to the work performed.

(l) Signature lines for the home improvement contractor or the contractor’s agent and for each consumer who is to be a party to the home improvement contract with a legible printed or a typed version of that person’s name placed directly after or below the signature.

IV. Parties to a home improvement contract may exempt themselves from the requirements of this chapter only if the consumer asserts that exigent circumstances exist. Exigent circumstances shall include, but not be limited to, severe damage to the residential structure, such as by fire or water, that requires immediate repair in order to mitigate further damage or make the residential structure habitable.

V. No civil action, judicial action, or arbitration proceeding asserting a claim shall be maintained under this chapter unless the homeowner complies with RSA 359-G concerning residential construction defects.

VI. Nothing in this chapter shall affect any right or action under RSA 447 concerning liens for labor and materials.

359-I:3 Home Contractor Fraud.

I. A home contractor is guilty of fraud, if, such person knowingly and with intent to injure, defraud, or deceive any consumer, conceals or causes to be concealed from any other person a material statement, or presents or causes to be presented to any person, or prepares with knowledge or belief that it will be so presented, any written or oral statement including computer-generated documents, knowing that such statement contains false, incomplete, or misleading information which is material to:

(a) An application for the issuance of any building permit.

(b) A prepayment requirement for material which is in excess of 10 percent of materials cost.

(c) A prepayment requirement for labor which is in excess of 10 percent of labor cost.

(d) Payments made in accordance with the terms of any contract, written or oral.

II. A person is guilty as an accomplice to fraud, if, with a purpose to injure, defraud, or deceive, the person assists, abets, solicits, or conspires with another to commit fraud described in paragraph I:

(a) By a knowingly false statement or misrepresentation or by impersonation or other knowingly fraudulent act or device attempts to obtain or obtains funds to which he or she is not entitled.

(b) Knowingly aids or abets any person, by a knowingly false statement or misrepresentation or by impersonation or other knowingly fraudulent act or device, to attempt to obtain or obtain funds to which the person is not entitled.

III. A fraud in violation of this section shall be:

(a) A class A felony if the value of the fraudulent portion of the claim for payment is more than $1,000.

(b) A class B felony if the value of the fraudulent portion of the claim for payment is more than $500, but not more than $1,000.

(c) A misdemeanor in all other cases.

359-I:4 Consumer Fraud on Contractors. A person who is a consumer of home improvement contractor services is guilty of a misdemeanor if:

I. The person destroys, removes, conceals, encumbers, transfers, or otherwise deals with property subject to a security interest with a purpose to hinder enforcement of that interest; or

II. Knowing that proceedings have been or are about to be instituted for the appointment of a person entitled to administer property for the benefit of contractor, the person destroys, removes, conceals, encumbers, transfers, or otherwise deals with any property with a purpose to defeat or obstruct the claim of any contractor, or otherwise to obstruct the operation of any law relating to administration of property for the benefit of creditors.

359-I:5 False Claims Against Homeowner.

I. A contractor shall be guilty of a misdemeanor if such contractor:

(a) Knowingly presents, or causes to be presented, to a homeowner a false or fraudulent claim for payment or approval.

(b) Knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim.

(c) Conspires to defraud by getting a false or fraudulent claim allowed or paid.

(d) Has possession, custody, or control of property or money used, or to be used with the intent to defraud a homeowner and delivers, or causes to be delivered, less property than the amount for which a homeowner receives a certificate or receipt.

(e) Knowingly makes, uses, or causes to be made or used, a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the homeowner.

(f) Is a beneficiary of an inadvertent submission of a false claim for payment, who subsequently discovers the falsity of the claim, and fails to disclose the false claim to the homeowner within a reasonable time after discovery of the false claim.

II. A court may impose no civil penalty, if the court finds that a contractor who has violated paragraph I:

(a) Furnished officials of the state responsible for investigating violations with all information known to the contractor about the violation within 30 days after the date on which the contractor first obtained the information;

(b) Fully cooperated with any state investigation of such violation; and

(c) At the time the contractor furnished the state with the information about the violation, no criminal prosecution, civil action, or administrative action had commenced under this chapter with respect to such violation, and the contractor did not have actual knowledge of the existence of an investigation into such violation.

III. A person violating paragraph I shall also be liable for the costs and attorneys’ fees arising from any civil action brought to recover the penalty or damages.

IV. Liability under this section shall be joint and several for any act committed by 2 or more contractors.

359-I:6 False Claims Against Contractor.

I. A person shall be guilty of a misdemeanor if a person:

(a) Knowingly presents, or causes to be presented, to a contractor a false or fraudulent claim for payment or approval.

(b) Knowingly makes, uses, or causes to be made or used, a false record or statement to get a false or fraudulent claim paid.

(c) Conspires to defraud by getting a false or fraudulent claim allowed or paid.

(d) Has possession, custody, or control of property or money used, or to be used intending to defraud a contractor and delivers, or causes to be delivered, less property than the amount for which the person receives a certificate or receipt.

(e) Knowingly makes, uses, or causes to be made or used, a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the contractor.

(f) Is a beneficiary of an inadvertent submission of a false claim for payment, who subsequently discovers the falsity of the claim, and fails to disclose the false claim to the contractor within a reasonable time after discovery of the false claim.

II. Notwithstanding the damages provision of paragraph I, the court may reduce the penalty or impose no civil penalty, if the court finds that a person who has violated paragraph I:

(a) Furnished officials of the state responsible for investigating violations with all information known to the person about the violation within 30 days after the date on which the person first obtained the information;

(b) Fully cooperated with any state investigation of such violation; and

(c) At the time the person furnished the state with the information about the violation, no criminal prosecution, civil action, or administrative action had commenced under this chapter with respect to such violation, and the person did not have actual knowledge of the existence of an investigation into such violation.

III. A person violating paragraph I shall also be liable for the costs and attorneys’ fees arising from any civil action brought to recover the penalty or damages.

IV. Liability under this section shall be joint and several for any act committed by 2 or more persons.

359-I:7 Enforcement; Additional Penalties. The provisions of this chapter shall be administered and enforced by the consumer protection and antitrust bureau, department of justice established by RSA 21-M:9. In addition to other appropriate penalties, any violation of the provisions of this chapter shall constitute an unfair or deceptive act or practice within the meaning of RSA 358-A. Any right, remedy or power set forth in RSA 358-A may be used to enforce the provisions of this chapter.

2 New Subparagraph; Enforcement. Amend RSA 21-M:9, II by inserting after subparagraph (u) the following new subparagraph:

(v) Administering and enforcing the provisions of RSA 359-I, relative to home improvement contracts.

3 Effective Date. This act shall take effect January 1, 2008.