Office of Sen.

Mike Johnston
Colorado General Assembly | 200 E. Colfax Avenue | Denver, CO 80203 | 303.866.4864

FACT SHEET MEMORANDUM

SB 12-038 Protect Consumers Residential Roofing Work Sen. Tochtrop & Rep. Vaad Staff Name: Riki Parikh What the Bill Does: This bill adds new statutory regulations to consumer roofing contracts. Residential roofing contractors are required to sign a written contract with their customers detailing the contractors contact information, the specified terms of the work agreement, and written statements mandating the refund of all deposits if a customer cancels the contracts within 72 hours of signing or within 72 hours of receiving notice that their insurance claim to pay for the roofing service has been denied. Refunds must be made within 10 days of cancellation. The bill also requires that the contract include a written statement that the roofing contractor cannot pay, waive, or rebate any part of the customer's insurance deductible. Colorado Context: There are no state laws directly regulating the roofing industry.1 While zoning and building codes may impose some regulatory burden on roofers, the only consumer protections currently in place are claims made under the Colorado Consumer Protection Act.2 Roofing and home building associations have requested regulations for their industry to strengthen the market of roofing contractors whose credibility has suffered due to fraudulent and unprofessional contractors.3 Last year, the Colorado Roofing Association submitted a proposal to the Department of Regulatory Agencies to create a licensing regime for roofing contractors.4 A comprehensive legislative proposal creating the regime was introduced last year as SB 11-207 and voted out of the Business, Labor, and Technology Committee before dying on the Senate floor during a political debate on immigration reform.5

DEPT. OF REGULATORY AGENCIES, 2012 SUNRISE REVIEW: ROOFING CONTRACTORS 6 (Sept. 29, 2010), available at http://www.dora.state.co.us/opr/archive/2010RooferSunrise.pdf [hereinafter DORA Report] 2 Id. 3 See Roofing Regulations May Help Consumer Concerns, CBS4 DENVER (Apr. 21, 2011), http://denver.cbslocal.com/2011/04/21/roofing-regulation-may-help-consumer-concerns/; Jerry Koppel, Roofing Industry Concedes Need for Regulation, COLO. STATESMAN (Apr. 15, 2011), http://coloradostatesman.com/kopel/992743-roofing-industryconcedes-need-regulation 4 DORA Report, supra note 1, at 5. 5 SB 11-207 -- Defeated in Senate on 4-27-11, COLO. ROOFING ASSN (Apr. 27, 2011), http://coloradoroofing.org/member/SB207.html

DRAFT 1/27/2012 For a complete list of fact sheets, visit www.mikejohnston.org/in-the-legislature.

National Context: Thirty states and Washington, D.C., provide some regulation of roofing contractors in the form of licensing regimes, according to the Colorado Roofing Association.6 Bill Provisions: Declares the purpose of Article 22 of Title 6 is to protect Colorado consumers by: Requiring consumers and roofing contractors hired for work on residential property to sign a written contract detailing the scope and cost of the project and containing the contact information for the roofing contractor; Requiring roofing contractors to allow their customers to rescind their contract and obtain a refund of any deposit paid within 72 hours of signing the contract; and Prohibiting contractors from paying, waiving, or rebating all or part of any insurance deductible applicable to a claim for payment for roofing work on the residential property covered by the insurance. Provides specific definitions for residential property, roofing contractor, and roofing services, which are the subject of the subsequent regulations. Provides the required terms of the contract between the roofing contractors and their customers. The contracts must be signed by both parties and provided to the customer before the services begin, and must include: the scope of the project and materials to be provided; the dates and cost of service; the contractors contact information, including phone number, email, and physical address; the contact information of the contractors surety and liability insurance provider; and the contractors cancellation and deposit refund policy, which must allow the customer to rescind the contract and obtain a full refund within 72 hours after entering into the contract. Provides that a customer paying for roofing services through their property or casualty insurance policies must be able to cancel their contract -- in writing and delivered to the contractor by mail, email, or personal delivery -- within 72 hours after the customer receives notice from their insurance company that their claim has been denied in whole or in part. Any deposits made must be refunded within 10 days of a customers cancellation. Any payment given to compensate for work already done does not have to be refunded. Provides that if a customer hires a roofing contractor using money from an insurance policy, the contractor cannot advertise or promise to pay, waive, or rebate any part of the insurance deductible applicable to the claim for payment for the work. If a contractor violates this prohibition, the insurance company is not obligated to consider the contractors cost estimate, and the customer may bring action against the roofing contractor to recover damages. Fiscal Impact: There is no fiscal impact associated with this legislation.7

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DORA Report, supra note 1, at 6-9. Josh Abram, Fiscal Note: SB 12-038 (Jan. 13, 2012), available at http://www.leg.state.co.us/clics/clics2012a/csl.nsf/fsbillcont3/27662B8088A2C51F87257981007F1243?Open&file=SB038_00.p df.

DRAFT 1/27/2012 For a complete list of fact sheets, visit www.mikejohnston.org/in-the-legislature.