2004 Legislation
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SENATE BILL NO. 1391 – Contractor disclosure, exception

SENATE BILL NO. 1391

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Bill Status



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

Bill Text


                                                                        
                                                                        
  ]]]]              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 / Fiscal Impact



                       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