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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