Same law allows homeowners to cancel roofing contract if
homeowner's insurance company denies the claim
In response to concerns from consumers, insurers, and other contractors, the 2010 Legislature passed a bill (SF 1886) that will have a direct effect on licensed building contractors who contract with homeowners to repair roofs damaged by storms.
Effective Aug. 1, 2010, the main provision of this new law is a prohibition on advertising or offering to pay or rebate all or part of a homeowner's insurance deductible. Although CCLD does not have direct enforcement authority over this prohibition, a contractor who advertises or promises to pay or rebate all or part of a homeowner's deductible in soliciting roofing work may be subject to a civil action by the homeowner or their insurance company to recover any damages they sustain as a result of the violation. Also, an insurer does not have to consider the estimate prepared by a contractor who offered to pay all or part of the homeowner's deductible.
Another provision of the bill allows homeowners to cancel any contract for roofing work if their homeowner's insurance company denies the claim. Contractors must include in their contractor for roofing work a notice of right to cancel that a homeowner can use to notify the contractor of their decision to cancel the contract. This cancellation must be made within 72 hours of the homeowner receiving notice of the claim denial from their insurer. In the event of such a cancellation, the contractor must refund any down payment to the homeowner within 10 business days of receiving the cancellation notice. CCLD does have authority to sanction contractors who fail to comply with the cancellation notice provisions of this law.
Questions regarding residential building contractor laws and rules can be directed to CCLD Enforcement Services staff at (651) 284-5069 or DLI.email@example.com.
View the full bill (SF 1886)
Summary of 2010 Legislative action, including: lead certification, roofing contracts, home warranties, and others.