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REFERENCE TITLE: contractors; owners; documents |
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State of Arizona Senate Fifty-third Legislature First Regular Session 2017
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SB 1246 |
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Introduced by Senator Griffin
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AN ACT
amending sections 32‑1158, 32‑1158.01 and 32‑1158.02, Arizona Revised Statutes; relating to contractors.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 32-1158, Arizona Revised Statutes, is amended to read:
32-1158. Provision of documents and receipt at contract signing
A. From and after December 31, 1992 until December 31, 2007, any contract in an amount of more than one thousand dollars and less than one hundred fifty thousand dollars entered into between a contractor and the owner of a property to be improved shall contain in writing at least the following information:
1. The name of the contractor and the contractor's business address and license number.
2. The name and mailing address of the owner and the jobsite address or legal description.
3. The date the parties entered into the contract.
4. The estimated date of completion of all work to be performed under the contract.
5. A description of the work to be performed under the contract.
6. The total dollar amount to be paid to the contractor by the owner for all work to be performed under the contract, including all applicable taxes.
7. The dollar amount of any advance deposit paid or scheduled to be paid to the contractor by the owner.
8. The dollar amount of any progress payment and the stage of construction at which the contractor will be entitled to collect progress payments during the course of construction under the contract.
B. From and after December 31, 2007, any contract in an amount of more than one thousand dollars entered into between a contractor and the owner of a property to be improved shall contain in writing at least the following information:
1. The name of the contractor and the contractor's business address and license number.
2. The name and mailing address of the owner and the jobsite address or legal description.
3. The date the parties entered into the contract.
4. The estimated date of completion of all work to be performed under the contract.
5. A description of the work to be performed under the contract.
6. The total dollar amount to be paid to the contractor by the owner for all work to be performed under the contract, including all applicable taxes.
7. The dollar amount of any advance deposit paid or scheduled to be paid to the contractor by the owner.
8. The dollar amount of any progress payment and the stage of construction at which the contractor will be entitled to collect progress payments during the course of construction under the contract.
9. That the property owner has the right to file a written complaint with the registrar for an alleged violation of section 32‑1154, subsection A. The contract shall contain the registrar's telephone number and website address and shall state that complaints must be made within the applicable time period as set forth in section 32‑1155, subsection A. The information in this paragraph must be prominently displayed in the contract in at least ten point bold type, and the contract shall be signed by the property owner and the contractor or the contractor's designated representative. This paragraph does not apply to a person who is subject to and complies with section 12‑1365.
C. A. At the time of signing When a contractor and an owner sign a contract, the contractor shall provide the owner shall be provided with a legible copy of all documents signed and a written and signed receipt for and in the true amount of any cash paid to the contractor by the owner.
D. B. The requirements of this section shall are not constitute prerequisites to the formation or enforcement of a contract. Failure to comply with the requirements of this section shall does not constitute a defense by either party to an action for compensation, damages, breach, enforcement or other cause of action based on the contract.
Sec. 2. Section 32-1158.01, Arizona Revised Statutes, is amended to read:
32-1158.01. Swimming pool; spa; construction contracts
A. In addition to the requirements of section 32‑1158, A licensed contractor who enters into a contract for the construction or installation of a residential in‑ground swimming pool or spa with a purchaser who resides in the residence or who intends to reside in the residence after the completion of the contract shall include in the contract at least the following provisions:
1. A provision providing the purchaser the opportunity to request standard contractor's payment and performance bonds in a form approved by the registrar, securing the completion of the work and payment for services and materials. The cost of the payment and performance bond shall be paid by the purchaser of the swimming pool or spa, and the contractor shall not charge a surcharge or a service charge.
2. The following payment provisions:
(a) A down payment payable on the execution of the contract of not more than one thousand dollars.
(b) After the completion of the excavation work on the swimming pool or spa, a payment of not more than thirty per cent percent of the amount of the original contract price plus any written change orders approved by the purchaser.
(c) After the installation of steel, plumbing and pneumatically applied concrete materials or the installation of a prefabricated swimming pool or spa, a payment of not more than thirty per cent percent of the amount of the original contract price plus any written change orders approved by the purchaser.
(d) After the installation of decking materials, a payment of not more than thirty per cent percent of the amount of the original contract price plus any written change orders approved by the purchaser.
(e) Before the application of the finishing interior materials or completion of all work on a prefabricated pool or spa, payment of all remaining sums due on the original contract plus any written change orders approved by the purchaser.
3. A provision that gives notice to the purchaser, in a form that is approved by the registrar and that is in at least ten point ten‑point type, of the purchaser's right to receive written material that advises the purchaser of the provisions of this section and of the procedures provided for by the registrar for the resolution of claims and disputes with licensed contractors.
4. A provision in a form that is approved by the registrar and that is in at least ten point ten‑point type, advising the purchaser of the purchaser's rights under title 44, chapter 15.
B. If a purchaser requires the contractor to furnish a payment and performance bond securing the performance of the contract, the contract provisions of required by subsection A, paragraph 2 of this section may be changed in any manner agreed to by the parties to the contract.
C. Any changes, additions or deletions to the work specified in the original contract shall be included in a written change order.
D. A contractor's failure to comply with this section is a violation of section 32‑1154, subsection A.
Sec. 3. Section 32-1158.02, Arizona Revised Statutes, is amended to read:
32-1158.02. Residential construction contracts
A. For residential repair or replacement of damage resulting directly from a catastrophic storm in a specific area that is designated by an insurer, in addition to the requirements of section 32‑1158, a licensed contractor who enters into a contract for the repair or replacement of a residential roof or other repair or replacement within the scope of the regulation of this chapter with a purchaser who resides in the residence or who intends to reside in the residence after the completion of the contract shall include in the contract at least the following provisions:
1. A statement in at least ten-point bold type in substantially the following form: "You may cancel this contract at any time within seventy‑two hours after you have been notified that your insurer has denied your claim to pay for the goods and services to be provided under this contract."
2. A statement in at least ten-point bold type in substantially the following form: "You may cancel this contract at any time, for any reason, within four business days after signing this contract."
3. A copy of a repair estimate that contains the following disclosures:
(a) A precise description and location of all damage claimed on the repair estimate.
(b) For roofing repair or replacement, a detailed description of the work to be done, including the square footage of the repair area or the replacement area.
(c) If the damaged areas are not included in the repair estimate, a specification of those areas and any reason for their exclusion from the repair estimate.
(d) Whether or not the property was inspected before the preparation of the estimate and the nature of that inspection, specifically whether the roof was physically accessed.
(e) That a contractor has made no assurances that the claimed loss will be covered by an insurance policy.
(f) That the policyholder is responsible for payment for any work performed if the insurer should deny payment or coverage for any part of the loss.
B. A residential owner of a property or casualty insurance policy has the right to cancel the contract described in subsection A of this section within seventy-two hours after the insured owner has been notified by the insurer that the claim has been denied.
C. In addition to the right prescribed in subsection B of this section, the insured owner of a residence has the right to cancel the contract described in subsection A of this section for any reason within four business days after signing the contract. A cancellation shall be evidenced by the insured owner giving written notice of cancellation to the contractor's address stated in the contract. Notice of cancellation does not need to be in a particular form, except that the notice must indicate in writing the intent of the insured owner not to be bound by the contract.
D. Within ten days after a contract has been canceled pursuant to this section, the contractor must tender to the insured owner any payments made by the insured owner and any note or other evidence of indebtedness, except that if the contractor has performed any emergency services, the contractor is entitled to receive reasonable compensation for the services if the insured owner has received a detailed description and itemization of the charges for those services.
E. The down payment section on the execution of a contract entered into pursuant to this section shall not require more than fifty per cent percent of the total contract.
F. Any changes, additions or deletions to the work order specified in the original contract shall be included in a written change order that is signed by the homeowner.
G. A contractor shall immediately notify and disclose in writing to the residential owner of a property or casualty insurance policy any cancellation of the contractor's workers' compensation coverage.
H. A contractor's failure to comply with this section is grounds for license suspension or revocation pursuant to section 32‑1154.
I. An individual or contractor who prepares a repair estimate for post-storm repair or replacement services as described in subsection A of this section in anticipation of making an insurance claim must disclose the following information to the insured owner:
1. A precise description and location of all damage claimed or included on the repair estimate.
2. Documentation to support the damage claimed on the estimate, including photographs, digital images or another medium.
3. A detailed description and itemization of any emergency repairs already completed by the contractor.
4. If damaged areas are not included in the repair estimate, a specification of those areas and any reason for their exclusion from the repair estimate.
5. A provision stating whether or not the property was inspected before the preparation of the estimate, if the contract is a contract for repair or replacement of a roof, and whether the roof was physically accessed.
6. A provision stating that the contractor has made no assurances that the claimed loss will be covered by an insurance policy.
J. If an insured owner submits a claim with the insurer for residential repair or replacement pursuant to this section, the contractor may not begin work on the repair or replacement until the insurer approves or denies the claim except if the work is necessary to prevent further loss.
K. A person who is not licensed pursuant to this chapter and who is not exempt from licensure pursuant to this chapter may not bring a private cause of action to recover monies from a homeowner for any residential repair or replacement that the person does pursuant to this section.
L. Except as otherwise provided in this subsection, a contractor providing post-storm repair or replacement contracting services shall not act on behalf of an insured owner in negotiating for the settlement of a claim for loss or damage under any policy of insurance covering the insured owner's residence and shall not make any assurance that the proposed repair or replacement contracting services will be covered by an insurance policy. The contractor may communicate with an insurer to assist in any claim disputes, including actual damages incurred, if both of the following apply:
1. The insured owner gives the contractor permission.
2. The contractor is not compensated for the communication.
M. With a policyholder's written consent, an insurer providing coverage for a post-storm residential repair or replacement may issue its check in the name of both the policyholder and the contractor with the contractor's license number issued pursuant to this chapter noted on the check.
N. This section shall does not limit the following individuals from contacting and negotiating with the insured owner:
1. A government official who is engaged in the performance of official duties.
2. An attorney who is engaged in the performance of professional duties.
3. Licensed insurers and licensed insurance producers while engaged in the performance of their duties in connection with insurance transactions.
4. Any salaried office employee who is performing exclusively clerical or administrative duties and who is not compensated in any manner for securing contracts related to post-storm residential repair or replacement contracting.
5. Photographers, estimators, appraisers or engineers who ARE employed exclusively for the purpose of furnishing technical assistance.
6. A private investigator who is licensed pursuant to chapter 24 of this title.
7. A full-time salaried employee of a property owner or property management company who is retained by a property owner, who has not been hired for the purpose of handling a specific claim resulting from a fire or casualty loss and who acts at the sole discretion of the property owner or management company regarding a claim related to the owner's property.