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H0664..........................................................by EDUCATION
PROPERTY - RESIDENTIAL - Adds to existing law to require that general
contractors, subcontractors, materialmen and rental equipment providers
disclose certain information to owners and purchasers of residential real
property.
02/20 House intro - 1st rdg - to printing
02/21 Rpt prt - to Bus
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature Second Regular Session - 2002
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 664
BY EDUCATION COMMITTEE
1 AN ACT
2 RELATING TO DISCLOSURES TO RESIDENTIAL REAL PROPERTY PURCHASERS AND
3 HOMEOWNERS; AMENDING CHAPTER 5, TITLE 45, IDAHO CODE, BY THE ADDITION OF A
4 NEW SECTION 45-525, IDAHO CODE, TO REQUIRE THAT GENERAL CONTRACTORS DIS-
5 CLOSE CERTAIN INFORMATION TO OWNERS AND PURCHASERS OF RESIDENTIAL REAL
6 PROPERTY; AND AMENDING CHAPTER 5, TITLE 45, IDAHO CODE, BY THE ADDITION OF
7 A NEW SECTION 45-526, IDAHO CODE, TO REQUIRE THAT SUBCONTRACTORS,
8 MATERIALMEN AND RENTAL EQUIPMENT PROVIDERS DISCLOSE CERTAIN INFORMATION TO
9 OWNERS AND PURCHASERS OF RESIDENTIAL REAL PROPERTY.
10 Be It Enacted by the Legislature of the State of Idaho:
11 SECTION 1. That Chapter 5, Title 45, Idaho Code, be, and the same is
12 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
13 ignated as Section 45-525, Idaho Code, and to read as follows:
14 45-525. GENERAL CONTRACTORS -- RESIDENTIAL PROPERTY -- DISCLOSURES. (1)
15 Legislative intent. This section is intended to protect owners and purchasers
16 of residential real property by requiring that general contractors provide
17 adequate disclosure of potential liens.
18 (2) General contractor information. Prior to entering into any contract
19 in an amount exceeding two thousand dollars ($2,000) with a homeowner or resi-
20 dential real property purchaser to construct, alter or repair any improvements
21 on residential real property, or with a residential real property purchaser
22 for the purchase and sale of newly constructed property, the general contrac-
23 tor shall provide to the homeowner a disclosure statement setting forth the
24 information specified in this subsection. The statement shall contain an
25 acknowledgment of receipt to be executed by the homeowner or residential real
26 property purchaser. The general contractor shall retain proof of receipt and
27 shall provide a copy to the homeowner or residential real property purchaser.
28 The disclosure shall include the following:
29 (a) The homeowner or residential real property purchaser shall have the
30 right at the reasonable expense of the homeowner or residential real prop-
31 erty purchaser to require that the general contractor obtain lien waivers
32 from any subcontractors providing services or materials to the general
33 contractor;
34 (b) The homeowner or residential real property purchaser shall have the
35 right to receive from the general contractor proof that the general con-
36 tractor has a general liability insurance policy including completed oper-
37 ations in effect and proof that the general contractor has worker's com-
38 pensation insurance for his employees as required by Idaho law;
39 (c) The homeowner or residential real property purchaser shall be
40 informed of the opportunity to purchase an extended policy of title insur-
41 ance covering certain unfiled or unrecorded liens; and
42 (d) The homeowner or residential real property purchaser shall have the
43 right to require, at the homeowner's or residential real property
2
1 purchaser's expense, a surety bond in an amount up to the value of the
2 construction project.
3 (3) Subcontractor, materialmen and rental equipment information.
4 (a) A general contractor shall provide to a prospective residential real
5 property purchaser or homeowner a written disclosure statement, which
6 shall be signed by the general contractor listing the business names,
7 addresses and telephone numbers of all subcontractors, materialmen and
8 rental equipment providers having a direct contractual relationship with
9 the general contractor and who have supplied materials or performed work
10 on the residential property of a value in excess of five hundred dollars
11 ($500). A general contractor is not required under this subsection to dis-
12 close subcontractors, materialmen or rental equipment providers not
13 directly hired by or directly working for the general contractor. Such
14 information shall be provided within a reasonable time prior to:
15 (i) The closing on any purchase and sales agreement with a prospec-
16 tive residential real property purchaser; or
17 (ii) The final payment to the general contractor by a homeowner or
18 residential real property purchaser for construction, alteration, or
19 repair of any improvement of residential real property.
20 (b) All subcontractors, materialmen and rental equipment providers listed
21 in the disclosure statement are authorized to disclose balances owed to
22 the prospective real property purchasers or homeowners and to the agents
23 of such purchasers or homeowners.
24 (c) The general contractor shall not be liable for any error, inaccuracy
25 or omission of any information delivered pursuant to this section if the
26 error, inaccuracy or omission was not within the personal knowledge of the
27 general contractor.
28 (4) Failure to disclose. Failure to provide complete disclosures as
29 required by this section to the homeowner or prospective residential real
30 property purchaser shall constitute an unlawful and deceptive act or practice
31 in trade or commerce under the provisions of the Idaho consumer protection
32 act, chapter 6, title 48, Idaho Code.
33 (5) Definitions. For purposes of this section:
34 (a) "General contractor" means a person who enters into an agreement in
35 excess of two thousand dollars ($2,000) with:
36 (i) A homeowner or prospective residential real property purchaser
37 for the construction, alteration or repair of residential real prop-
38 erty; or
39 (ii) A prospective residential real property purchaser for the pur-
40 chase and sale of newly constructed property.
41 The term "general contractor" does not include subcontractors, materialmen
42 or rental equipment providers who do not have a direct contractual rela-
43 tionship with the homeowner or residential real property purchaser.
44 (b) "Residential real property" shall include owner and nonowner occupied
45 real property consisting of not less than one (1) nor more than four (4)
46 dwelling units.
47 SECTION 2. That Chapter 5, Title 45, Idaho Code, be, and the same is
48 hereby amended by the addition thereto of a NEW SECTION, to be known and des-
49 ignated as Section 45-526, Idaho Code, and to read as follows:
50 45-526. SUBCONTRACTORS, MATERIALMEN AND RENTAL EQUIPMENT PROVIDERS --
51 DISCLOSURES. (1) A subcontractor, materialman or rental equipment provider
52 whose name is not required to be provided pursuant to section 45-525(3), Idaho
53 Code, shall provide to a prospective residential real property purchaser or
3
1 homeowner a written disclosure statement that includes the business name,
2 address and telephone number of such subcontractor, materialman or rental
3 equipment provider if he has supplied materials or performed work on the resi-
4 dential real property of a value in excess of five hundred dollars ($500).
5 Such information shall be provided within a reasonable time prior to:
6 (a) The closing on any purchase and sales agreement with a prospective
7 residential real property purchaser; or
8 (b) The final payment to the general contractor by a homeowner or resi-
9 dential real property purchaser for construction, alteration or repair of
10 any improvement of the residential real property.
11 (2) All subcontractors, materialmen and rental equipment providers shall
12 disclose any balances owed to the prospective real property purchasers or
13 homeowners and to the agents of such purchasers or homeowners.
14 (3) Failure to provide complete disclosures as required by this section
15 to the homeowner or prospective residential real property purchaser shall con-
16 stitute an unlawful and deceptive act or practice in trade or commerce under
17 the provisions of the Idaho consumer protection act, chapter 6, title 48,
18 Idaho Code.
19 (4) This section shall apply only to subcontractors, materialmen and
20 rental equipment providers who provide labor, material or equipment to:
21 (a) A homeowner or prospective residential real property purchaser for
22 the construction, alteration or repair of residential real property; and
23 (b) A prospective residential real property purchaser for the purchase
24 and sale of newly constructed property.
25 (5) For purposes of this section, "residential real property" includes
26 owner and nonowner occupied real property consisting of not less than one (1)
27 nor more than four (4) dwelling units.
STATEMENT OF PURPOSE
RS 12117
This legislation is designed to address issues relating to liens.
The legislation requires a disclosure by second tier
subcontractors, materialmen, or rental equipment providers to
homeowners and residential real property purchasers when said
second tier subcontractors, materialmen or rental equipment
providers have performed work on residential real property of a
value in excess of five hundred dollars ($500). The legislation
furthers requires second tier subcontractors, materialmen, or
rental equipment providers to provide, to a prospective
residential real property purchaser or homeowner a written
disclosure statement that includes the business name, address and
telephone number of such second tier subcontractor, materialmen or
rental equipment provider within a reasonable time prior to a
closing of a sale or final payment for services performed. Failure
to provide these disclosures shall constitute an unlawful and
deceptive act or practice in trade or commerce under the
provisions of the Idaho Consumer Protection Act.
FISCAL IMPACT
There should be no fiscal impact resulting from this proposed
legislation.
Contact
Name: Larry Benton, Idaho Land Title Assn.
Phone: 461 2000
STATEMENT OF PURPOSE/FISCAL NOTE H 664