In what appears to be a consumer protection driven bill, Representative Dean Arp has sponsored a bill which, if passed, would substantially alter requirements for and regulation of roofing contractors. Before you start reading this it is important to know that licensed general contractors and subcontractors providing roofing services who work under (for) a licensed North Carolina general contractor are exempt from this bill. Target is small, unregulated residential roofers performing work over $750.00.
The proposed legislation distinguishes by definition resident and nonresident roofing contractors, but within the language of the proposed statute, there is no difference as to the requirements – or otherwise stated, the proposed regulations apply equally to resident and nonresident roofing contractors.
The stated purpose being consumer protection, the bill prohibits roofing contractors from in any manner covering insurance deductibles, nor can the contractor offer any form of an inducement attached to a sale. Translation: no gifts, prizes, coupons, referral fees or other payment to the consumer or a broker. And, the contractor may not ask for an assignment of claim or power of attorney in order to represent the consumer in an insurance claim.
Of greater import may well be the provisions within the bill which would require roofing contractors to provide a contract in writing and further require that the contract contain a detailed estimate, including a “precise description and location” for all damages contained in the estimate, as well as any existing damage which is excluded and an explanation as to why it is excluded; an itemized estimate of repair costs including cost of materials, hourly labor rate and number of hours anticipated or a unit cost; a description of the inspection done including whether the roof was “physically accessed”; and a statement indicating that no assurances were made as to insurance coverage. The estimate must all include a disclosure that if coverage is denied the consumer is responsible for payment and the contractor’s name and physical address. In bold-face type, there must be a disclosure of the right to cancel the contract up to three business days after consumer receives written notice from insurer of non-coverage. And, the contract must have the statutory “Notice of Cancellation” attached.
If the Notice of Cancellation is properly completed and submitted by the consumer, then the roofing contractor will have 10 days to return any payments received from the consumer, with an exception for emergency repairs made under a separate written contract – “emergency repairs” are those necessary to prevent additional damage to the property while the insurance issues are being addressed.
Failure to return those funds or failure to comply with this statute will constitute an unfair trade practice and will expose the roofing contractor to treble damages and attorney’s fees.
At present, there is no real guidance as to who might be pushing this legislation though Rep. Arp is a civil engineer and therefore has contacts throughout the construction industry. We will monitor this bill and provide updates as they are warranted. If you have specific concerns, contact your state legislative representatives.