2002 Legislation
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HOUSE BILL NO. 664 – Property, residentl, info disclosed

HOUSE BILL NO. 664

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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

Bill Text


                                                                        
                                                                        
  ||||              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 / Fiscal Impact


                     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