Senate Bill 12-038

1386 Consumer and Commercial Transactions Ch. 267

CHAPTER 267

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CONSUMER AND COMMERCIAL TRANSACTIONS

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SENATE BILL 12-038

BY SENATOR(S) Tochtrop, Aguilar, Bacon, Newell;

also REPRESENTATIVE(S) Priola, Labuda, Todd, Williams A.

AN ACT

CONC E RNING M EA SU R ES TO PRO T ECT CO N SUM ERS W H O E N G A G E A R OOFIN G C O NT R ACTO R T O

PE RFO R M R OOFIN G SER VIC E S O N RESIDEN T IAL PRO PER T Y.

Be it enacted by the General Assembly of the State of Colorado:

SECTION 1. In Colorado Revised Statutes, add article 22 to title 6 as follows:

ARTICLE 22

Roofing Services - Residential Property

6-22-101. Legislative declaration. (1) THE GENERAL ASSEMBLY HEREBY

DECLARES THAT THE PURPOSE OF ENACTING THIS ARTICLE IS TO PROTECT COLORADO

CONSUMERS BY:

(a) REQUIRING ROOFING CONTRACTORS OFFERING TO PERFORM ROOFING WORK ON

RESIDENTIAL PROPERTY IN THIS STATE TO SIGN A WRITTEN CONTRACT WITH

PROPERTY OWNERS DETAILING THE SCOPE AND COST OF THE ROOFING WORK AND

CONTACT INFORMATION FOR THE ROOFING CONTRACTOR;

(b) REQUIRING ROOFING CONTRACTORS TO PERMIT PROPERTY OWNERS TO

RESCIND A CONTRACT FOR THE PERFORMANCE OF ROOFING WORK AND OBTAIN A

REFUND OF ANY DEPOSIT PAID TO THE ROOFING CONTRACTOR; AND

PROMISING TO PAY, WAIVE, OR REBATE ALL OR PART OF ANY INSURANCE

DEDUCTIBLE APPLICABLE TO AN INSURANCE CLAIM MADE TO THE PROPERTY OWNER'S

PROPERTY AND CASUALTY INSURER FOR PAYMENT FOR ROOFING WORK ON THE

RESIDENTIAL PROPERTY COVERED BY A PROPERTY AND CASUALTY INSURANCE

POLICY.

)) ) ) )

Capital letters indicate new material added to existing statutes; dashes through words indicate deletions

from existing statutes and such material not part of act.

Ch. 267 Consumer and Commercial Transactions 1387

6-22-102. Definitions. AS USED IN THIS ARTICLE, UNLESS THE CONTEXT

OTHERWISE REQUIRES:

(1) "PROPERTY OWNER" MEANS THE OWNER OF RESIDENTIAL PROPERTY OR THE

OWNER'S LEGAL REPRESENTATIVE.

(2) (a) "RESIDENTIAL PROPERTY" MEANS:

(I) A DETACHED, ONE- OR TWO-FAMILY DWELLING; OR

(II) MULTIPLE SINGLE-FAMILY DWELLINGS THAT ARE NOT MORE THAN THREE

STORIES ABOVE GRADE PLANE HEIGHT AND PROVIDE SEPARATE MEANS OF EGRESS.

(b) "RESIDENTIAL PROPERTY" DOES NOT INCLUDE:

(I) A STRUCTURE COMPRISING MULTIPLE, ATTACHED SINGLE-FAMILY DWELLINGS,

UNLESS MAINTENANCE, REPAIR, OR REPLACEMENTS OF THE DWELLINGS' ROOF IS THE

RESPONSIBILITY OF A CONDOMINIUM ASSOCIATION, HOMEOWNERS' ASSOCIATION,

COMMON INTEREST COMMUNITY, UNIT OWNERS' ASSOCIATION, OR ANY OTHER

ENTITY SUBJECT TO THE "COLORADO COMMON INTEREST OWNERSHIP ACT",

ARTICLE 33.3 OF TITLE 38, C.R.S., REGARDLESS OF WHEN THE ENTITY WAS FORMED;

(II) NEW CONSTRUCTION.

(3) "ROOFING CONTRACTOR" MEANS:

(a) AN INDIVIDUAL OR SOLE PROPRIETORSHIP THAT PERFORMS ROOFING WORK OR

ROOFING SERVICES IN THIS STATE FOR COMPENSATION; OR

(b) (I) A FIRM, PARTNERSHIP, CORPORATION, ASSOCIATION, BUSINESS TRUST,

LIMITED LIABILITY COMPANY, OR OTHER LEGAL ENTITY THAT PERFORMS OR OFFERS

TO PERFORM ROOFING WORK IN THIS STATE ON RESIDENTIAL PROPERTY FOR

COMPENSATION.

(II) AS USED IN SUBPARAGRAPH (I) OF THIS PARAGRAPH (b), "ASSOCIATION" DOES

NOT INCLUDE A CONDOMINIUM ASSOCIATION, HOMEOWNERS' ASSOCIATION, COMMON

INTEREST COMMUNITY, UNIT OWNERS' ASSOCIATION, OR ANY OTHER ENTITY SUBJECT

TO THE "COLORADO COMMON INTEREST OWNERSHIP ACT", ARTICLE 33.3 OF TITLE

38, C.R.S., REGARDLESS OF WHEN THE ENTITY WAS FORMED.

(4) (a) "ROOFING WORK" OR "ROOFING SERVICES" MEANS THE CONSTRUCTION,

RECONSTRUCTION, ALTERATION, MAINTENANCE, OR REPAIR OF A ROOF ON A

RESIDENTIAL PROPERTY AND THE USE OF MATERIALS AND ITEMS IN THE

CONSTRUCTION, RECONSTRUCTION, ALTERATION, MAINTENANCE, AND REPAIR OF

ROOFING AND WATERPROOFING OF ROOFS, ALL IN A MANNER TO COMPLY WITH

PLANS, SPECIFICATIONS, CODES, LAWS, RULES, REGULATIONS, AND ROOFING

INDUSTRY STANDARDS FOR WORKMANLIKE PERFORMANCE APPLICABLE TO THE

CONSTRUCTION, RECONSTRUCTION, ALTERATION, MAINTENANCE, AND REPAIR OF

ROOFS ON RESIDENTIAL PROPERTIES.

1388 Consumer and Commercial Transactions Ch. 267

(b) "ROOFING WORK" OR "ROOFING SERVICES" DOES NOT INCLUDE ROOFING WORK

OR SERVICES FOR WHICH THE COMPENSATION IS ONE THOUSAND DOLLARS OR LESS

PER CONTRACT.

6-22-103. Contracts for roofing services - writing required - required terms.

(1) PRIOR TO ENGAGING IN ANY ROOFING WORK, A ROOFING CONTRACTOR SHALL

PROVIDE A WRITTEN CONTRACT TO THE PROPERTY OWNER, SIGNED BY BOTH THE

ROOFING CONTRACTOR OR HIS OR HER DESIGNEE AND THE PROPERTY OWNER,

STATING AT LEAST THE FOLLOWING TERMS:

(a) THE SCOPE OF ROOFING SERVICES AND MATERIALS TO BE PROVIDED;

(b) THE APPROXIMATE DATES OF SERVICE;

THE TIME THE CONTRACT IS ENTERED;

(d) THE ROOFING CONTRACTOR'S CONTACT INFORMATION, INCLUDING PHYSICAL

ADDRESS, ELECTRONIC MAIL ADDRESS, TELEPHONE NUMBER, AND ANY OTHER

CONTACT INFORMATION AVAILABLE FOR THE ROOFING CONTRACTOR;

(e) IDENTIFICATION OF THE ROOFING CONTRACTOR'S SURETY AND LIABILITY

COVERAGE INSURER AND THEIR CONTACT INFORMATION, IF APPLICABLE;

(f) (I) THE ROOFING CONTRACTOR'S POLICY REGARDING CANCELLATION OF THE

CONTRACT AND REFUND OF ANY DEPOSIT, INCLUDING A RESCISSION CLAUSE

ALLOWING THE PROPERTY OWNER TO RESCIND THE CONTRACT AND OBTAIN A FULL

REFUND OF ANY DEPOSIT WITHIN SEVENTY-TWO HOURS AFTER ENTERING THE

CONTRACT; AND

(II) A WRITTEN STATEMENT THAT THE PROPERTY OWNER MAY RESCIND A ROOFING

CONTRACT PURSUANT TO SECTION 6-22-104; AND

(g) A WRITTEN STATEMENT THAT IF THE PROPERTY OWNER PLANS TO USE THE

PROCEEDS OF A PROPERTY AND CASUALTY INSURANCE POLICY ISSUED PURSUANT TO

PART 1 OF ARTICLE 4 OF TITLE 10, C.R.S., TO PAY FOR THE ROOFING WORK,

PURSUANT TO SECTION 6-22-105, THE ROOFING CONTRACTOR CANNOT PAY, WAIVE,

REBATE, OR PROMISE TO PAY, WAIVE, OR REBATE ALL OR PART OF ANY INSURANCE

DEDUCTIBLE APPLICABLE TO THEINSURANCE CLAIM FOR PAYMENT FOR ROOFING

WORK ON THE COVERED RESIDENTIAL PROPERTY.

(2) IN ADDITION TO THE CONTRACT TERMS REQUIRED IN SUBSECTION (1) OF THIS

SECTION, A ROOFING CONTRACTOR SHALL INCLUDE, ON THE FACE OF THE CONTRACT,

IN BOLD-FACED TYPE, A STATEMENT INDICATING THAT THE ROOFING CONTRACTOR

SHALL HOLD IN TRUST ANY PAYMENT FROM THE PROPERTY OWNER UNTIL THE

ROOFING CONTRACTOR HAS DELIVERED ROOFING MATERIALS AT THE RESIDENTIAL

PROPERTY SITE OR HAS PERFORMED A MAJORITY OF THE ROOFING WORK ON THE

RESIDENTIAL PROPERTY.

6-22-104. Residential roofing contract - payment from insurance proceeds

- right to rescind - return of payments. (1) (a) A PROPERTY OWNER WHO ENTERS

Ch. 267 Consumer and Commercial Transactions 1389

INTO A WRITTEN CONTRACT WITH A ROOFING CONTRACTOR TO PERFORM ROOFING

WORK ON THE PROPERTY OWNER'S RESIDENTIAL PROPERTY, THE PAYMENT FOR

WHICH WILL BE MADE FROM THE PROCEEDS OF A PROPERTY AND CASUALTY

INSURANCE POLICY ISSUED PURSUANT TO PART 1 OF ARTICLE 4 OF TITLE 10, C.R.S.,

MAY RESCIND THE CONTRACT WITHIN SEVENTY-TWO HOURS AFTER THE PROPERTY

OWNER RECEIVES WRITTEN NOTICE FROM THE PROPERTY AND CASUALTY INSURER

THAT THE CLAIM FOR PAYMENT FOR ROOFING WORK ON THE RESIDENTIAL PROPERTY

IS DENIED IN WHOLE OR IN PART. THE PROPERTY OWNER'S RIGHT OF RESCISSION

UNDER THIS SUBSECTION (1) DOES NOT APPLY WHEN THE PROPERTY AND CASUALTY

INSURER DENIES, IN WHOLE OR IN PART, A CLAIM RELATED TO A REQUEST FOR

SUPPLEMENTAL ROOFING SERVICES IF THE DAMAGE REQUIRING THE SUPPLEMENTAL

ROOFING SERVICES COULD NOT HAVE BEEN REASONABLY FORESEEN AS A NECESSARY

AND RELATED ROOFING SERVICE AT THE TIME OF THE INITIAL ROOFING INSPECTION

OR THE EXECUTION OF THE INITIAL ROOFING CONTRACT.

(b) THE PROPERTY OWNER SHALL GIVE WRITTEN NOTICE OF RESCISSION OF THE

CONTRACT TO THE ROOFING CONTRACTOR AT THE PHYSICAL ADDRESS PROVIDED IN

THE CONTRACT WITHIN SEVENTY-TWO HOURS AFTER HE OR SHE IS NOTIFIED OF THE

DENIAL. THE PROPERTY OWNER MAY GIVE NOTICE OF RESCISSION OF THE CONTRACT:

(I) IN AN ELECTRONIC FORM, WHICH IS EFFECTIVE ON THE DATE OF THE

ELECTRONIC TRANSMISSION;

(II) BY MAIL, WHICH IS EFFECTIVE UPON DEPOSIT IN THE UNITED STATES MAIL,

POSTAGE PREPAID, SENT TO THE PHYSICAL ADDRESS STATED IN THE CONTRACT; OR

(III) BY PERSONAL DELIVERY TO THE ROOFING CONTRACTOR, WHICH IS EFFECTIVE

UPON DELIVERY.

(2) WITHIN TEN DAYS AFTER RESCISSION OF A CONTRACT IN ACCORDANCE WITH

SUBSECTION (1) OF THIS SECTION, THE ROOFING CONTRACTOR SHALL RETURN TO THE

PROPERTY OWNER ANY PAYMENTS OR DEPOSITS MADE BY OR EVIDENCE OF

INDEBTEDNESS OF THE PROPERTY OWNER IN CONNECTION WITH THE CONTRACT FOR

ROOFING WORK ON THE RESIDENTIAL PROPERTY.

(3) NOTHING IN THIS SECTION PRECLUDES A ROOFING CONTRACTOR FROM

RETAINING ALL OR A PORTION OF ANY PAYMENTS OR DEPOSITS MADE BY A PROPERTY

OWNER TO COMPENSATE THE ROOFING CONTRACTOR FOR ROOFING WORK ACTUALLY

PERFORMED ON THE RESIDENTIAL PROPERTY IN A WORKMANLIKE MANNER

CONSISTENT WITH STANDARD ROOFING INDUSTRY PRACTICES, BUT THE ROOFING

CONTRACTOR MAY RETAIN ONLY AN AMOUNT REQUIRED TO COMPENSATE THE

ROOFING CONTRACTOR FOR THE ACTUAL WORK PERFORMED.

(4) NOTHING IN THIS SECTION ABROGATES THE ROOFING CONTRACTOR'S RIGHT TO

PURSUE COMMON LAW REMEDIES FOR THE REASONABLE VALUE OF ROOFING

MATERIALS ORDERED AND ACTUALLY INSTALLED ON THE RESIDENTIAL PROPERTY

PURSUANT TO A CONTRACT FOR ROOFING WORK BEFORE THE PROPERTY OWNER

RESCINDED THE CONTRACT, AS LONG AS THE ROOFING CONTRACTOR PERFORMED THE

ROOFING SERVICES CONSISTENT WITH ROOFING INDUSTRY STANDARDS FOR

WORKMANLIKE PERFORMANCE OF ROOFING SERVICES.

1390 Consumer and Commercial Transactions Ch. 267

(5) NOTHING IN THIS SECTION ABROGATES A PROPERTY AND CASUALTY INSURER'S

DUTIES, RESPONSIBILITIES, OR LIABILITY UNDER SECTIONS 10-3-1115 AND

10-3-1116, C.R.S.

6-22-105. Waiver of insurance deductible prohibited. (1) A ROOFING

CONTRACTOR THAT PERFORMS ROOFING WORK, THE PAYMENT FOR WHICH WILL BE

MADE FROM THE PROCEEDS OF A PROPERTY AND CASUALTY INSURANCE POLICY

ISSUED PURSUANT TO PART 1 OF ARTICLE 4 OF TITLE 10, C.R.S., SHALL NOT

ADVERTISE OR PROMISE TO PAY, WAIVE, OR REBATE ALL OR PART OF ANY INSURANCE

DEDUCTIBLE APPLICABLE TO THE CLAIM FOR PAYMENT FOR ROOFING WORK ON THE

COVERED RESIDENTIAL PROPERTY.

(2) IF A ROOFING CONTRACTOR VIOLATES SUBSECTION (1) OF THIS SECTION:

(a) THE INSURER TO WHOM THE PROPERTY OWNER SUBMITTED THE CLAIM FOR

PAYMENT FOR THE ROOFING WORK IS NOT OBLIGATED TO CONSIDER THE ESTIMATE

OF COSTS FOR THE ROOFING WORK PREPARED BY THE ROOFING CONTRACTOR; AND

(b) THE PROPERTY OWNER WHOSE RESIDENTIAL PROPERTY IS INSURED UNDER THE

PROPERTY AND CASUALTY INSURANCE POLICY OR THE INSURER THAT ISSUED THE

POLICY MAY BRING AN ACTION AGAINST THE ROOFING CONTRACTOR IN A COURT OF

COMPETENT JURISDICTION TO RECOVER DAMAGES SUSTAINED BY THE PROPERTY

OWNER OR INSURER AS A CONSEQUENCE OF THE VIOLATION.

(3) A ROOFING CONTRACTOR SOLICITING ROOFING SERVICES IN THIS STATE SHALL

NOT CLAIM TO BE OR ACT AS A PUBLIC INSURANCE ADJUSTER ADJUSTING CLAIMS FOR

LOSSES OR DAMAGES. NOTHING IN THIS ARTICLE PREVENTS A PUBLIC INSURANCE

ADJUSTER LICENSED PURSUANT TO SECTION 10-2-417, C.R.S., FROM ACTING OR

HOLDING HIMSELF OR HERSELF OUT AS A PUBLIC INSURANCE ADJUSTER. NOTHING IN

THIS SUBSECTION (3) PRECLUDES A ROOFING CONTRACTOR FROM DISCUSSING, ON

BEHALF OF THE PROPERTY OWNER, THE SCOPE OF REPAIRS WITH A PROPERTY AND

CASUALTY INSURER WHEN THE ROOFING CONTRACTOR HAS A VALID CONTRACT WITH

THE PROPERTY OWNER OF THE RESIDENTIAL PROPERTY ON WHICH THE ROOFING

CONTRACTOR HAS CONTRACTED TO PERFORM ROOFING WORK.

SECTION 2. Applicability. The provisions of this act apply to roofing work

performed on residential property in this state on or after the effective date of this

act.

SECTION 3. Safety clause. The general assembly hereby finds, determines, and

declares that this act is necessary for the immediate preservation of the public peace,

health, and safety.

Approved: June 6, 2012