For those of us that practice in the area of property damage in Colorado, June 6, 2012, is a day with much notoriety. A large wind and hail storm passed through the state, causing extraordinary damage. Even though it was classified as a catastrophic event, many insurers still challenged damages, so I represented a high volume of clients from this storm. However, this was not the only thing that happened on this date in Colorado. Governor Hickenlooper also signed into effect Senate Bill 12-038, “Concerning Measures to Protect Consumers who Engage a Roofing Contractor to Perform Roofing Services on Residential Property.” The full act is available online, but I wanted to draw your attention to certain parts of it as they have been topics of many recent phone calls.
Roofing contract requirements:
A written contract signed by both the contractor and the property owner is required. It must state the scope of services and materials to be provided, as well as the approximate dates of service. It also must include the approximate cost of services based upon the damages currently known. The contractor’s contact information and insurance information must be included. Also, the contractor’s policy regarding cancellation, refund of the deposit and a rescission clause allowing a full refund if the contract is cancelled within seventy-two (72) hours of signing the contract. The contract must also contain in bold a statement that the contractor will hold in trust any monies received from the property owner until materials are delivered to the site or until a majority of the work has been done.
If the property owner plans to use insurance proceeds to pay for the contractor’s services, “[t]he roofing contractor cannot pay, waive, rebate, or promise to pay, waive, or rebate all or part of any insurance deductible applicable to the insurance claims for payment for roofing work on the covered residential property.” I draw your attention to this particular clause because it comes up quite often in conversations. The deductible is something that has to be paid by the property owner. By law, it cannot be paid by the contractor and there are penalties for violation of this section. If a contractor does violate this provision, the insurance company is not obligated to consider the estimate prepared by said contractor and the property owner may sue the contractor to recover damages.
In addition, a property owner may also rescind a contract within seventy-two (72) hours after the property owner receives written notice from the insurance company that the claim is being denied in whole or in part. (This does not apply when it involves supplemental roofing services that could not have been reasonably foreseen as necessary at the time of the initial inspection or execution of the contract.) Written notice of rescission by the property owner must be given to the contractor via email, mail or personal delivery. Within ten (10) days of a proper rescission, the contractor must return any money to the property owner. The contractor may keep all proceeds for the work already performed.
A contractor soliciting roofing services shall not act as or claim to be a public adjuster. The contractor may, on behalf of the property owner, discuss the scope of repairs with the insurance company so long as the contractor has a valid contract. Contractors are not permitted to discuss policy language, so if this is necessary, it may be in your best interest to hire a public adjuster or attorney to assist with your claim.