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S1391................................................by JUDICIARY AND RULES
CONTRACTOR DISCLOSURE - Amends existing law to provide that the required
disclosure by general contractors to owners or purchasers of residential
property shall not apply to instances in which a homeowner or the agent of
the homeowner initiates the contact with the general contractor for
purposes of providing repairs necessary to meet a bona fide emergency of
the homeowner or to make necessary repairs to an electrical, plumbing or
water system of the homeowner.
02/24 Senate intro - 1st rdg - to printing
02/25 Rpt prt - to Com/HuRes
03/05 Rpt out - rec d/p - to 2nd rdg
03/08 2nd rdg - to 3rd rdg
03/09 3rd rdg - PASSED - 33-1-1
AYES -- Andreason, Bailey, Brandt, Bunderson, Burkett, Burtenshaw,
Calabretta, Cameron, Compton, Darrington, Davis, Gannon, Geddes,
Goedde, Hill, Ingram, Kennedy, Keough, Little, Lodge, Malepeai,
Marley, McWilliams, Noh, Pearce, Richardson, Schroeder, Sorensen,
Stegner, Stennett, Sweet, Werk, Williams
NAYS -- McKenzie
Absent and excused -- Noble
Floor Sponsor - Noh
Title apvd - to House
03/10 House intro - 1st rdg - to Bus
03/16 Rpt out - rec d/p - to 2nd rdg
03/17 2nd rdg - to 3rd rdg
Rls susp - PASSED - 66-3-1
AYES -- Andersen, Barraclough, Barrett, Bauer, Bayer, Bedke, Bell,
Black, Block, Boe, Bolz, Bradford, Campbell, Cannon, Clark, Collins,
Cuddy, Deal, Denney, Douglas, Eberle, Edmunson, Eskridge, Field(18),
Field(23), Gagner, Garrett, Henbest, Jaquet, Jones, Kellogg, Kulczyk,
Lake, Langford, Langhorst, Martinez, McGeachin, McKague, Meyer,
Miller, Mitchell, Moyle, Naccarato, Nielsen, Pasley-Stuart, Raybould,
Ridinger, Ring, Ringo, Roberts, Robison, Rydalch, Sayler, Schaefer,
Shepherd, Shirley, Skippen, Smith(30), Smith(24), Smylie, Snodgrass,
Stevenson, Trail, Wills, Wood, Mr. Speaker
NAYS -- Ellsworth, Harwood, Sali
Absent and excused -- Crow
Floor Sponsor - Smith(24)
Title apvd - to Senate
03/18 To enrol
03/19 Rpt enrol - Pres signed - Sp signed
03/22 To Governor
03/23 Governor signed
Session Law Chapter 225
Effective: 03/23/04
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]]
Fifty-seventh Legislature Second Regular Session - 2004
IN THE SENATE
SENATE BILL NO. 1391
BY JUDICIARY AND RULES COMMITTEE
1 AN ACT
2 RELATING TO MECHANICS AND MATERIALMEN'S LIENS; AMENDING SECTION 45-525, IDAHO
3 CODE, TO PROVIDE THAT THE STATUTE REQUIRING DISCLOSURES BY GENERAL CON-
4 TRACTORS TO OWNERS OR PURCHASERS OF RESIDENTIAL PROPERTY SHALL NOT APPLY
5 TO INSTANCES IN WHICH A HOMEOWNER OR THE AGENT OF THE HOMEOWNER INITIATES
6 THE CONTACT WITH THE GENERAL CONTRACTOR FOR PURPOSES OF PROVIDING REPAIRS
7 NECESSARY TO MEET A BONA FIDE EMERGENCY OF THE HOMEOWNER OR TO MAKE NECES-
8 SARY REPAIRS TO AN ELECTRICAL, PLUMBING OR WATER SYSTEM OF THE HOMEOWNER;
9 AND DECLARING AN EMERGENCY.
10 Be It Enacted by the Legislature of the State of Idaho:
11 SECTION 1. That Section 45-525, Idaho Code, be, and the same is hereby
12 amended to read as follows:
13 45-525. GENERAL CONTRACTORS -- RESIDENTIAL PROPERTY -- DISCLOSURES. (1)
14 Legislative intent. This section is intended to protect owners and purchasers
15 of residential real property by requiring that general contractors provide
16 adequate disclosure of potential liens.
17 (2) General contractor information. Prior to entering into any contract
18 in an amount exceeding two thousand dollars ($2,000) with a homeowner or resi-
19 dential real property purchaser to construct, alter or repair any improvements
20 on residential real property, or with a residential real property purchaser
21 for the purchase and sale of newly constructed property, the general contrac-
22 tor shall provide to the homeowner a disclosure statement setting forth the
23 information specified in this subsection. The statement shall contain an
24 acknowledgment of receipt to be executed by the homeowner or residential real
25 property purchaser. The general contractor shall retain proof of receipt and
26 shall provide a copy to the homeowner or residential real property purchaser.
27 The disclosure shall include the following:
28 (a) The homeowner or residential real property purchaser shall have the
29 right at the reasonable expense of the homeowner or residential real prop-
30 erty purchaser to require that the general contractor obtain lien waivers
31 from any subcontractors providing services or materials to the general
32 contractor;
33 (b) The homeowner or residential real property purchaser shall have the
34 right to receive from the general contractor proof that the general con-
35 tractor has a general liability insurance policy including completed oper-
36 ations in effect and proof that the general contractor has worker's com-
37 pensation insurance for his employees as required by Idaho law;
38 (c) The homeowner or residential real property purchaser shall be
39 informed of the opportunity to purchase an extended policy of title insur-
40 ance covering certain unfiled or unrecorded liens; and
41 (d) The homeowner or residential real property purchaser shall have the
42 right to require, at the homeowner's or residential real property
43 purchaser's expense, a surety bond in an amount up to the value of the
2
1 construction project.
2 (3) Subcontractor, materialmen and rental equipment information.
3 (a) A general contractor shall provide to a prospective residential real
4 property purchaser or homeowner a written disclosure statement, which
5 shall be signed by the general contractor listing the business names,
6 addresses and telephone numbers of all subcontractors, materialmen and
7 rental equipment providers having a direct contractual relationship with
8 the general contractor and who have supplied materials or performed work
9 on the residential property of a value in excess of five hundred dollars
10 ($500). A general contractor is not required under this subsection to dis-
11 close subcontractors, materialmen or rental equipment providers not
12 directly hired by or directly working for the general contractor. Such
13 information shall be provided within a reasonable time prior to:
14 (i) The closing on any purchase and sales agreement with a prospec-
15 tive residential real property purchaser; or
16 (ii) The final payment to the general contractor by a homeowner or
17 residential real property purchaser for construction, alteration, or
18 repair of any improvement of residential real property.
19 (b) All subcontractors, materialmen and rental equipment providers listed
20 in the disclosure statement are authorized to disclose balances owed to
21 the prospective real property purchasers or homeowners and to the agents
22 of such purchasers or homeowners.
23 (c) The general contractor shall not be liable for any error, inaccuracy
24 or omission of any information delivered pursuant to this section if the
25 error, inaccuracy or omission was not within the personal knowledge of the
26 general contractor.
27 (4) Failure to disclose. Failure to provide complete disclosures as
28 required by this section to the homeowner or prospective residential real
29 property purchaser shall constitute an unlawful and deceptive act or practice
30 in trade or commerce under the provisions of the Idaho consumer protection
31 act, chapter 6, title 48, Idaho Code.
32 (5) Definitions. For purposes of this section:
33 (a) "General contractor" means a person who enters into an agreement in
34 excess of two thousand dollars ($2,000) with:
35 (i) A homeowner or prospective residential real property purchaser
36 for the construction, alteration or repair of residential real prop-
37 erty; or
38 (ii) A prospective residential real property purchaser for the pur-
39 chase and sale of newly constructed property.
40 The term "general contractor" does not include subcontractors, materialmen
41 or rental equipment providers who do not have a direct contractual rela-
42 tionship with the homeowner or residential real property purchaser.
43 (b) "Residential real property" shall include owner and nonowner occupied
44 real property consisting of not less than one (1) nor more than four (4)
45 dwelling units.
46 (6) This section shall not apply to instances in which a homeowner or the
47 agent of the homeowner initiates the contact with the general contractor for
48 purposes of providing repairs necessary to meet a bona fide emergency of the
49 homeowner or to make necessary repairs to an electrical, plumbing or water
50 system of the homeowner.
51 SECTION 2. An emergency existing therefor, which emergency is hereby
52 declared to exist, this act shall be in full force and effect on and after its
53 passage and approval.
STATEMENT OF PURPOSE
RS 14134
Idaho Code 45-525 requires general contractors to provide
certain information to and gain approval of homeowners for work
in excess of $2,000. Failure to do so precludes use of liens to
protect these providers.
This has created problems in places such as the Wood
River Valley when homeowners may use their residences for a short
period of the year and hire caretakers to oversee the property
the rest of the year. The costs of restoring vital services in
an emergency or repairing vital services frequently exceeds
$2,000 and it can take considerable time to find and communicate
directly with the homeowners.
This proposal exempts providers from this requirement in
instances where the homeowners or the agent of the homeownerinitiates
contact with the general contractor for the purposes of
making emergency repairs to vital services or to repair vital
services.
FISCAL IMPACT
None.
Contact
Name: Senator Laird Noh
Phone: 332-1333
STATEMENT OF PURPOSE/FISCAL NOTE S 1391