Substitute House Bill No. 5590

Public Act No. 00-132

An Act Concerning Consumer Protection For New Home Construction.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 1 of public act 99-246 is repealed and the following is substituted in lieu thereof:

As used in [this act] public act 99-246:

(1) "Certificate" means a certificate of registration issued under section 3 of [this act] public act 99-246;

(2) "Commissioner" means the Commissioner of Consumer Protection or any person designated by the commissioner to administer and enforce [this act] public act 99-246;

(3) "Contract" means any agreement between a new home construction contractor and a consumer for the construction or sale of a new home;

(4) "Engage in the business" means that the person engages in the business for the purpose of compensation or profit;

[(4)] (5) "New home construction contractor" means any person who contracts with a consumer to construct or sell a new home or any portion of a new home prior to occupancy;

[(5)] (6) "New home" means any newly constructed (A) single family dwelling unit, [any] (B) dwelling consisting of not more than two units, or (C) a unit, common element or limited common element in a condominium, as defined in section 47-68a of the general statutes, or in a common interest community, as defined in section 47-202 of the general statutes;

[(6)] (7) "Person" means one or more individuals, partnerships, associations, corporations, limited liability companies, business trusts, legal representatives or any organized group of persons; [and]

[(7)] (8) "Consumer" means the [original] buyer or prospective buyer, or the [original] buyer's or prospective buyer's heirs or designated representatives, of any new home; and

(9) "Completion" means the stage of construction of a new home in which the new home construction contractor is in receipt of such new home's certificate of occupancy issued by the municipality in which such new home is constructed.

Sec. 2. (NEW) (a) Public act 99-246, as amended by this act, does not apply to any of the following persons or organizations: (1) Any person holding a current license as a real estate broker or salesperson issued pursuant to chapter 392 of the general statutes, provided such person engages only in work for which such person is licensed under chapter 392 of the general statutes; (2) any person licensed or otherwise authorized under chapter 412 of the general statutes to sell or place a mobile manufactured home, as defined in section 21-64 of the general statutes, upon a mobile manufactured home park or mobile manufactured space or lot, both as defined in section 21-64 of the general statutes, provided such person engages only in work for which such person is licensed or otherwise authorized under chapter 412 of the general statutes; (3) any other person holding a professional or occupational license, registration or certificate issued pursuant to the general statutes, provided such person engages only in the work for which such person is licensed, registered or certified; and (4) any new home construction contractor who enters into one or more new home construction contracts related to the same new home when such contract or contracts in the aggregate with respect to that home has a total price for work or services that is less than three thousand five hundred dollars.

(b) The commissioner shall reimburse the amount of the fees paid for a certificate issued under section 3 of public act 99-246, as amended by this act, and the amount of fees paid into the New Home Construction Guaranty Fund pursuant to section 9 of public act 99-246, as amended by this act, if such person for whom reimbursement is requested (1) is a person exempt from registration as a contractor pursuant to subsection (a) of this section, and (2) makes such request in writing to the Department of Consumer Protection on a form supplied by the department and such request is received by the department on or before June 30, 2001.

Sec. 3. Section 2 of public act 99-246 is repealed and the following is substituted in lieu thereof:

(a) No person shall engage in the business of new home construction or hold oneself out as a new home construction contractor unless such person has been issued a certificate of registration by the commissioner in accordance with the provisions of [this act] public act 99-246, as amended by this act. No new home construction contractor shall be relieved of responsibility for the conduct and acts of its agents, employees or officers by reason of such new home construction contractor's compliance with the provisions of [this act] public act 99-246, as amended by this act.

(b) Any person seeking a certificate of registration shall apply to the commissioner, in writing, on a form provided by the commissioner. The application shall include (1) the applicant's name, [residence or] business street address, business telephone number, [and] (2) the identity of the insurer that provides the applicant with insurance coverage for liability, [based upon the errors and omissions of the new home construction contractor] (3) if such applicant is required by any provision of the general statutes to have workers' compensation coverage, the identity of the insurer that provides the applicant with such workers' compensation coverage, and (4) if such applicant is required by any provision of the general statutes to have an agent for service of process, the name and address of such agent. Each such application shall be accompanied by a fee of one hundred twenty dollars, except that no such application fee shall be required if such person has paid the registration fee required under section 20-421 of the general statutes, as amended, during any year in which such person's registration as a new home construction contractor would be valid.

(c) Certificates issued to new home construction contractors shall not be transferable or assignable.

(d) All certificates issued under the provisions of [this act] public act 99-246, as amended by this act, shall expire biennially. The fee for renewal of a certificate shall be the same as the fee charged for an original application, except as provided in subsection (c) of section 9 of [this act] public act 99-246, and that no renewal fee is due if a person seeking renewal of a certificate has paid the registration fee under section 20-427 of the general statutes during any year in which such person's registration as a new home construction contractor would be valid.

(e) A certificate shall not be restored unless it is renewed not later than one year after its expiration.

(f) Failure to receive a notice of expiration or a renewal application shall not exempt a contractor from the obligation to renew.

Sec. 4. Section 4 of public act 99-246 is repealed and the following is substituted in lieu thereof:

(a) A new home construction contractor shall (1) prior to entering into a contract with a consumer for new home construction, provide to the consumer a copy of the new home construction contractor's certificate of registration and a written notice that (A) discloses that the certificate of registration does not represent in any manner that such contractor's registration constitutes an endorsement of the quality of such person's work or of such contractor's competency by the commissioner, (B) advises the consumer to contact the Department of Consumer Protection to determine (i) if such contractor is registered in this state as a new home construction contractor, (ii) if any complaints have been filed against such contractor, and (iii) the disposition of any such complaints, and (C) advises the consumer to request from such contractor a list of [each individual or the fifteen most recent individuals, whichever is less for whom such contractor has engaged in new home construction during the current and preceding calendar year] consumers of the last twelve new homes constructed to completion by the contractor during the previous twenty-four months, or if the contractor has not constructed at least twelve new homes to completion during the previous twenty-four months, then a list of all consumers for whom the contractor has constructed a new home to completion during the previous twenty-four months, and to contact several individuals on the list to discuss the quality of such contractor's new home construction work, (2) state in any advertisement, including any advertisement in a telephone directory, the fact that such contractor is registered, and (3) include such contractor's registration number in any such advertisement.

(b) A new home construction contractor shall include in every contract with a consumer a provision advising the consumer that the consumer may be contacted by such contractor's prospective consumers concerning the quality and timeliness of such contractor's new home construction work, unless the consumer advises such contractor, in writing, at the time the contract is executed, that the consumer prefers not to be contacted.

(c) The written notice required in subsection (a) of this section shall be in capital letters not less than ten-point bold face type, and may include a statement in substantially the following form:

"NEW HOME CONSTRUCTION CONTRACTOR

REGISTRATION NOTICE

A CERTIFICATE OF REGISTRATION AS A NEW HOME CONSTRUCTION CONTRACTOR DOES NOT REPRESENT IN ANY MANNER THAT THE CONNECTICUT DEPARTMENT OF CONSUMER PROTECTION ENDORSES THE QUALITY OF THE CONTRACTOR'S NEW HOME CONSTRUCTION WORK OR THE CONTRACTOR'S COMPETENCY TO ENGAGE IN NEW HOME CONSTRUCTION.

ACCORDINGLY, YOU ARE ADVISED TO:

(1) REQUEST FROM THE CONTRACTOR A LIST OF [EACH INDIVIDUAL OR THE FIFTEEN MOST RECENT INDIVIDUALS, WHICHEVER IS LESS, FOR WHOM THE CONTRACTOR HAS ENGAGED IN NEW HOME CONSTRUCTION IN THIS STATE DURING THE CURRENT AND PRECEDING CALENDAR YEAR] CONSUMERS OF THE LAST TWELVE NEW HOMES CONSTRUCTED TO COMPLETION BY THE CONTRACTOR DURING THE PREVIOUS TWENTY-FOUR MONTHS, OR IF THE CONTRACTOR HAS NOT CONSTRUCTED AT LEAST TWELVE NEW HOMES TO COMPLETION DURING THE PREVIOUS TWENTY-FOUR MONTHS, THEN A LIST OF ALL CONSUMERS FOR WHOM THE CONTRACTOR HAS CONSTRUCTED A NEW HOME TO COMPLETION DURING THE PREVIOUS TWENTY-FOUR MONTHS,

(2) CONTACT SEVERAL INDIVIDUALS ON THE LIST TO DISCUSS THE QUALITY AND THE TIMELINESS OF THE CONTRACTOR'S NEW HOME CONSTRUCTION WORK, AND

(3) CONTACT THE DEPARTMENT OF CONSUMER PROTECTION TO VERIFY THE REGISTRATION INFORMATION PRESENTED BY THE CONTRACTOR AND TO ASCERTAIN THE CONTRACTOR'S COMPLAINT HISTORY WITH THE DEPARTMENT.

IN ADDITION, YOU ARE ADVISED TO DISCUSS WITH THE NEW HOME CONSTRUCTION CONTRACTOR:

(1) WHETHER THE CONTRACTOR HAS A CUSTOMER SERVICE POLICY AND IF SO, THE IDENTITY OF THE PERSON DESIGNATED TO ASSIST YOU IN RESOLVING ANY COMPLAINT ABOUT THE CONTRACTOR'S WORK, AND

(2) WHETHER THE CONTRACTOR WILL HOLD YOU HARMLESS FOR WORK PERFORMED BY ANY SUBCONTRACTOR HIRED BY THE CONTRACTOR.

THIS NOTICE DOES NOT CONTAIN AN EXHAUSTIVE LIST OF THE INQUIRIES YOU SHOULD MAKE BEFORE CONTRACTING WITH A NEW HOME CONSTRUCTION CONTRACTOR. ADDITIONAL INFORMATION TO ASSIST YOU IN YOUR SELECTION OF A NEW HOME CONSTRUCTION CONTRACTOR MAY BE OBTAINED BY CONTACTING THE CONNECTICUT DEPARTMENT OF CONSUMER PROTECTION."

(d) No person shall: (1) Present, or attempt to present as such person's own, the certificate of another; (2) knowingly give false evidence of a material nature to the commissioner for the purpose of procuring a certificate; (3) represent such person falsely as, or impersonate, a registered new home construction contractor; (4) use or attempt to use a certificate which has expired or which has been suspended or revoked; (5) engage in the business of a new home construction contractor or hold oneself out as a new home construction contractor without having a current certificate of registration under [this act] public act 99-246, as amended by this act; (6) represent in any manner that such person's registration constitutes an endorsement of the quality of such person's work or of such person's competency by the commissioner; or (7) fail to refund a deposit paid to a new home construction contractor not later than ten days after a written request mailed or delivered to the new home construction contractor's last known address, if (A) the consumer has complied with the terms of the written contract up to the time of the request, (B) no substantial portion of the contracted work has been performed at the time of the request, (C) more than thirty days has elapsed since the starting date specified in the written contract or more than thirty days has elapsed since the date of the contract if such contract does not specify a starting date, and (D) the new home construction contractor has failed to provide a reasonable explanation to the consumer concerning such contractor's failure to perform a substantial portion of the contracted work. For purposes of this subdivision, "substantial portion of the contracted work" includes, but is not limited to, work performed by the new home construction contractor to (i) secure permits and approvals, (ii) redraft plans or obtain engineer, architect, surveyor or other approvals for changes requested by the consumer or made necessary by site conditions discovered after the contract is executed, (iii) scheduling site work or arranging for other contractors to perform services related to the construction of the consumer's new home, and (iv) any other work referred to in the contract as a "substantial portion of the contracted work."

Sec. 5. Section 5 of public act 99-246 is repealed and the following is substituted in lieu thereof:

In addition to any other remedy provided for in [this act] public act 99-246, as amended by this act, any person who violates any provision of subsection (d) of section 4 of [this act] public act 99-246, as amended by this act, except subdivision (7) of said subsection (d) shall be guilty of a class A misdemeanor. Notwithstanding subsection (d) of section 53a-29 or section 54-56e, if the court determines that a contractor cannot fully repay any victim of the violations committed by the contractor within the period of probation established in subsection (d) of section 53a-29 or section 54-56e, the court may impose probation for a period of not more than five years. Any person who violates the provisions of subdivision (7) of subsection (d) of section 4 of public act 99-246, as amended by this act, shall be liable for treble damages.

Sec. 6. This act shall take effect from its passage.

Approved May 26, 2000