General Contractors and Commercial Roofers Should Be Aware Colorado Senate Bill 38 Could Be Expanded To Include Them, Not Just Residential Roofers

Colorado Senate Bill No. 38, “Concerning Measures To Protect Consumers Who Engage A Roofing Contractor To Perform Roofing Services On Residential Property,” is sponsored by Democratic Senator Tochtrop and Republican House Representative Vaad. As discussed in prior blog posts, the Bill actually hurts consumers and roofers.

Senate Bill 38 was written by insurance companies and it being pushed through the Legislature by State Farm’s lobbyists. News Channel 7 confirmed this in its interview with Senator Tochtrop.

Although the roofing industry had some input in the amendments to the Bill, the text was drafted almost entirely by insurance companies.

Currently, the Bill is written to include residential roofers. However, it appears the Bill also applies to general contractors who subcontract with residential roofers. The Bill states,

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.

Colorado homes damaged by fire, tornado or hail storms may require a general contractor to handle damage to siding, gutters, heating and air conditioning units, fencing, and other collateral damage in addition to the roof. In these situations, it is common for general contractors to hire subcontractors—especially residential roofers. All of the Bill provisions likely apply to general contractors since general contractors perform roofing work on residential property via a subcontractor. This means that for the roof portion of the residential work, a general contractor may not include any discount to the homeowner that might be considered a waiver of the homeowner’s deductible. In addition, all of the contract cancellation provisions also apply to a general contractor—at least with regard to the portion of the general contractor’s contract with the homeowner that concerns roof work.

If this Bill passes in its current form and becomes law, it is quite possible insurance companies will come back next year, or the year after, and pass amendments that will expand the Bill to include commercial roofers, general contractors, as well as other trades. Insurance companies are always looking for ways to minimize insurance benefits payouts, and lower their loss ratio.

Senate Bill 38 has already passed the Senate and the hearing in the House has been set for April 19th.