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S.B. 173

             1     

RESIDENTIAL CONSTRUCTION CONTRACT AMENDMENTS

             2     
2013 GENERAL SESSION

             3     
STATE OF UTAH

             4     
Chief Sponsor: J. Stuart Adams

             5     
House Sponsor: Brad R. Wilson

             6     
             7      LONG TITLE
             8      General Description:
             9          This bill allows a person, under certain conditions, to cancel a contract for repair work
             10      if the contract is to be paid with proceeds of a property and casualty insurance policy.
             11      Highlighted Provisions:
             12          This bill:
             13          .    defines terms;
             14          .    entitles a person to cancel a contract with a residential contractor for the
             15      performance of repair work on a residential building if:
             16              .    at the time of the execution of the contract, the residential contractor knew or
             17      should have known that any part of the contract would be paid by proceeds of a
             18      property and casualty insurance policy;
             19              .    the property and casualty insurer denies any part of the claim; and
             20              .    the person provides the residential contractor written notice of cancellation
             21      within five business days after the day on which the person receives written
             22      notice of the denial;
             23          .    requires a residential contractor to return any payments made under a cancelled
             24      contract for repair work on a residential building, except for payments made for
             25      certain authorized work actually performed; and
             26          .    requires a contract described in this bill to include a notice that explains the person's
             27      right to cancel and a notice of cancellation form.


             28      Money Appropriated in this Bill:
             29          None
             30      Other Special Clauses:
             31          None
             32      Utah Code Sections Affected:
             33      ENACTS:
             34          13-50-101, Utah Code Annotated 1953
             35          13-50-102, Utah Code Annotated 1953
             36          13-50-201, Utah Code Annotated 1953
             37          13-50-202, Utah Code Annotated 1953
             38          13-50-203, Utah Code Annotated 1953
             39     
             40      Be it enacted by the Legislature of the state of Utah:
             41          Section 1. Section 13-50-101 is enacted to read:
             42     
CHAPTER 50. RESIDENTIAL CONSTRUCTION CONTRACTS ACT

             43     
Part 1. General Provisions

             44          13-50-101. Title.
             45          (1) This chapter is known as the "Residential Construction Contracts Act."
             46          (2) This part is known as "General Provisions."
             47          Section 2. Section 13-50-102 is enacted to read:
             48          13-50-102. Definitions.
             49          As used in this chapter:
             50          (1) "Repair work" means any work done to siding, gutters, a roof system, or a window
             51      system to repair damage caused by wind or hail.
             52          (2) "Residential building" means a single or multiple family dwelling of up to four
             53      units.
             54          (3) "Residential contractor" means a person that, for compensation, other than wages as
             55      an employee, contracts or offers to contract to perform repair work on a residential building.
             56          (4) "Roof system" includes roof coverings, roof sheathing, roof weatherproofing, roof
             57      framing, roof ventilation, and roof insulation.
             58          Section 3. Section 13-50-201 is enacted to read:


             59     
Part 2. Right to Cancel Certain Residential Construction Contracts

             60          13-50-201. Title.
             61          This part is known as "Right to Cancel Certain Residential Construction Contracts."
             62          Section 4. Section 13-50-202 is enacted to read:
             63          13-50-202. Right to cancel.
             64          (1) A person that enters into a written contract with a residential contractor for the
             65      performance of repair work on a residential building may cancel the contract if:
             66          (a) at the time of the execution of the contract, the residential contractor knew or
             67      should have known that the person intended that all or part of the contract would be paid with
             68      proceeds of a property and casualty insurance policy;
             69          (b) the property and casualty insurer denies any part of the person's claim relating to the
             70      repair work governed by the contract; and
             71          (c) within five business days after the day on which the person receives written notice
             72      from the person's property and casualty insurer that all or part of the person's claim relating to
             73      the repair work governed by the contract is denied, the person deposits in the United States
             74      mail, or otherwise provides, written notice of cancellation to the physical address provided in
             75      the contract.
             76          (2) Except as provided in Subsection (3), within 10 business days after the day on
             77      which a person cancels a contract under Subsection (1), the residential contractor shall return to
             78      the person all payments, partial payments, deposits, and evidence of indebtedness made by the
             79      person in relation to the contract.
             80          (3) A residential contractor may retain or collect the reasonable value of any repair
             81      work described in the contract that was actually performed, if the owner of the residential
             82      building expressly instructed the residential contractor to perform the repair work without
             83      waiting for the property and casualty insurer to provide notice of whether it accepts or denies
             84      coverage of the contract.
             85          Section 5. Section 13-50-203 is enacted to read:
             86          13-50-203. Required provisions.
             87          A written contract between a person and a residential contractor for the performance of
             88      repair work on a residential building shall:
             89          (1) include a notice of the person's right to cancel the contract, as described in Section


             90      13-50-202 , that is in substantially the following form:
             91          "Utah Code Section 13-50-202 provides that if, when you signed this contract, the
             92      residential contractor knew or should have known that you intended that all or part of the
             93      contract would be paid with proceeds of a property and casualty insurance policy, you may
             94      cancel this contract within five business days after the day on which you receive written
             95      notification from your property and casualty insurer that your claim, or a portion of your claim,
             96      has been denied";
             97          (2) state the mailing address where the residential contractor receives written notice;
             98      and
             99          (3) include a detachable copy of a notice of cancellation that is in substantially the
             100      following form:
             101          "NOTICE OF CANCELLATION
             102          If your property and casualty insurer denies your claim, or a portion of your claim, to
             103      pay for the repair work to be provided under this contract, you may cancel the contract by
             104      mailing or delivering a signed and dated copy of this cancellation notice or any other written
             105      cancellation notice to ______ (name of residential contractor) at ______ (address where
             106      residential contractor receives notices) any time within five business days after the day on
             107      which you receive written notice from your property and casualty insurer that your claim, or a
             108      portion of your claim, for coverage of the repair services described in this contract has been
             109      denied. If you cancel, any payments made by you under the contract will be returned within 10
             110      business days after the day on which the residential contractor receives your written
             111      cancellation notice, except that the residential contractor may retain or collect the reasonable
             112      value of any repair work actually performed, if you expressly instructed the residential
             113      contractor to perform the repair work without waiting for notice of coverage from your
             114      property and casualty insurer.
             115          I HEREBY CANCEL THIS TRANSACTION.
             116      Dated_____________
             117          
Signature_____________________"






Legislative Review Note
    as of 2-11-13 11:05 AM


Office of Legislative Research and General Counsel


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