Senate Bill No. 466
(By Senators D. Hall, Tucker, Barnes, Green, Cann, Carmichael, Nohe, Stollings, Williams, Beach and Kessler (Mr. President))
[Introduced February 3, 2014; referred to the Committee on Banking and Insurance; and then to the Committee on the Judiciary.]
A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new article, designated §46A-6M-1, §46A-6M-2, §46A-6M-3, §46A-6M-4, §46A-6M-5 and §46A-6M-6, all relating generally to providing consumers with the right to cancel residential roofing contracts where the contract is expected to be paid from a property and casualty insurance policy; providing definitions; establishing a consumer's right to cancel; creating standard disclosure and notice requirements; providing rules for the proscribed cancellation period; prohibiting certain acts; and misdemeanor criminal offense and penalty.
Be it enacted by the Legislature of West Virginia:
That the Code of West Virginia, 1931, as amended, be amended by adding thereto a new section, designated §46A-6M-1, §46A-6M-2, §46A-6M-3, §46A-6M-4, §46A-6M-5 and §46A-6M-6, all to read as follows:
ARTICLE 6M. STORM SCAMMER CONSUMER PROTECTION ACT.
As used in this article:
(a) "Residential real estate" means any real property located in West Virginia, upon which is constructed or intended to be constructed a dwelling;
(b) "Roof system" means the components of a roof to include, but not be limited to, covering, framing, insulation, sheathing, ventilation, guttering and weatherproofing; and
(c) "Roofing contractor" means a person or entity in the business of contracting or offering to contract with an owner of residential real estate to repair or replace a roof system.
§46A-6M-2. Consumer's right to cancel residential roofing contract.
(a) A person, who on or after July 1, 2014, enters into a contract with a roofing contractor to provide goods or services related to a roof system of residential real estate where the goods or services are expected to be paid from the proceeds of a property and casualty insurance policy, may cancel the contract prior to midnight of the fifth business day after the person has received written notice from the insurer that all or part of the claim is not a covered loss under the property and casualty insurance policy.
(b) Cancellation shall be considered to have occurred when the person either personally delivers written notice of cancellation to the roofing contractor; deposits the written notice of cancellation in the United States mail, postage prepaid and addressed to the roofing contractor at the address stated in the contract; or, if applicable, at the time notice of cancellation is transmitted to the roofing contractor by facsimile or at the time an e-mail notice of cancellation is sent.
(c) Notice of cancellation given by the person need not take a particular form and is sufficient if it indicates by any form of written expression the intention of the person not to be bound by the contract.
§46A-6M-3. Roofing contractor's duty to disclose rights of the consumer via standard form.
Prior to entering into a contract on or after July 1, 2014, for the provision of goods or services relating to the repair or replacement of any part of a roof system of residential real estate as provided in section two of this article, a roofing contractor shall furnish the owner of the residential real estate with:
(a) The mailing address of the roofing contractor through which written communication may be received;
(b) The telephone number of the roofing contractor and, if applicable, the facsimile number and e-mail address;
(c) A statement in at least ten point boldface type that states: "You may cancel this contract at any time before midnight on the fifth business day after you have received written notification from your insurer that all or any part of the claim or contract is not a covered loss under the insurance policy. This right to cancel is in addition to any other rights of cancellation you may have under state or federal law or regulation. See the attached Notice of Cancellation form for an explanation of this right."; and
(d) A fully completed form in duplicate, under the conspicuous caption "NOTICE OF CANCELLATION," and attached to but easily detachable from the contract, in at least ten point boldface type that shall read as follows:
"NOTICE OF CANCELLATION
(enter date of transaction)
If you are notified by your insurer that all or any part of the claim or contract is not a covered loss under the insurance policy, you may cancel this contract without penalty or monetary obligation before midnight of the fifth business day after you have received notice from your insurer. To cancel this transaction you may use any of the following methods: Mail or otherwise deliver a signed and dated copy of this cancellation notice, or any other written notice of cancellation which you sign and date, to (enter physical address of roofing contractor), or e-mail a notice of cancellation to (enter e-mail address of roofing contractor), or transmit a notice of cancellation to (enter facsimile number of roofing contractor), not later than midnight of the fifth day after you receive notice from your insurer.
I HEREBY CANCEL THIS TRANSACTION.
§46A-6M-4. Rules for proscribed consumer cancellation period.
(a) Except as provided in subsection (c) of this section, on or after July 1, 2014, a roofing contractor may not require any advance payments under a contract for the repair or replacement of any part of a roof system of residential real estate when payment is expected to be made from the proceeds of a property or casualty insurance policy until the cancellation period, as provided in section two of this article has expired.
(b) Within ten days after a contract has been canceled as provided in section two of this article, a roofing contractor shall tender to the payor any payments, partial payments, or deposits made, and any note or other evidence of indebtedness, except as provided in subsection (c) of this section.
(c) A roofing contractor that performs any repair services authorized by the owner of residential real estate, including, but not limited to, repair services necessary to prevent further damage to the premises, may collect a reasonable and customary amount for the repair services performed.
(d) Any provision in a contract executed on or after July 1, 2014, for the repair of a roof system of residential real estate, as provided in sections one and five of this article, that requires the payment of any fee, except for repair services performed under subsection (c) of this section, is not enforceable against any person who has canceled a contract under section two of this article.
§46A-6M-5. Roofing contractors; prohibited acts.
(a) On or after July 1, 2014, a roofing contractor may not represent, negotiate, or advertise to represent or negotiate on behalf of an owner of residential real estate on any insurance claim in connection with the repair or replacement of a roof system. Nothing in this subsection may be construed to prohibit a roofing contractor from:
(1) Providing an estimate for repair, replacement, construction or reconstruction of the property to the owner of residential real estate; or
(2) Conferring with an insurance company's representative about damage to the property after a claim has been submitted by the owner of residential real estate. This subsection does not apply to a public adjuster as defined in section one-e, article twelve-b, chapter thirty-three of this code.
(b) On or after July 1, 2014, a roofing contractor or person representing a roofing contractor may not:
(1) Offer to pay or rebate all or any portion of an insurance deductible or claims proceeds as an inducement to the sale of goods or services related to a residential roof contract;
(2) Grant an allowance or discount against the fee to be charged under the contract; or
(3) Pay the owner of residential real estate for whom services have been performed pursuant to this article for any reason or any form of compensation, including, but not limited to a:
(F) Referral fee; or
(G) Any other item having a monetary value.
§46A-6M-6. Private remedies for violations of this article; penalties.
(a) If a roofing contractor violates the provisions of this article, the insured or the applicable insurer may bring an action against the residential contractor in a court of competent jurisdiction for damages sustained by the insured or insurer as a consequence of the residential contractor's violation.
(b) A roofing contractor who willfully violates the provisions of this article is guilty of a misdemeanor and, upon conviction thereof, shall be fined not more than $5,000 or confined in jail not more than one year, or both fined and confined.
NOTE: The purpose of this bill is to provide consumers with the right to cancel residential roofing contracts where the contract is expected to be paid from a property and casualty insurance policy. The bill provides definitions; establishes a consumer's right to cancel; creates standard disclosure and notice requirements; and provides rules for the proscribed cancellation period. The bill also prohibits certain acts and provides misdemeanor criminal offense and penalty.
This article is new; therefore, strike-throughs and underscoring have been omitted.