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House Study Bill 41 - IntroducedA Bill ForAn Act 1relating to home improvement fraud and providing
2penalties for contractors who commit home improvement fraud.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 714.29 Home improvement fraud —
2penalties.
31. As used in this section, unless the context otherwise
4requires:
5a. “Consumer” means an individual who owns, leases, or
6rents the residential property that is subject to the home
7improvement contract and engages in the home improvement
8contract with the contractor.
9b. “Contract price” means the total price agreed upon in a
10home improvement contract.
11c. “Contractor” means a person who engages in home
12improvement work under a home improvement contract or solicits
13home improvement contracts whether or not the person interacts
14directly with the consumer.
15d. “Fair market value” means the amount for the home
16improvement which in commercial judgment or under usage of
17trade would be reasonable for services, materials, and work of
18similar quality and workmanship.
19e. “Home improvement” means any alteration, repair,
20addition, modification, or improvement to a dwelling or the
21property on which it is situated, including but not limited
22to the construction, painting or coating, installation,
23replacement or repair of driveways, sidewalks, swimming pools,
24unattached structures, porches, kitchens, bathrooms, chimneys,
25fireplaces, stoves, air conditioning or heating systems, hot
26water heaters, water treatment systems, electrical wiring or
27systems, plumbing fixtures or systems, doors, windows, roofs,
28gutters, downspouts, and siding.
29f. “Home improvement contract” means a written or oral
30agreement whereby a contractor offers or agrees to provide
31a home improvement to a consumer in exchange for payment of
32moneys, regardless of whether any such payment is made.
33g. “Material fact” means a fact that a reasonable person
34would consider important when purchasing a home improvement.
35h. “Unconscionable home improvement contract” means a home
-1-1improvement contract in which an unreasonable difference exists
2between the fair market value of services, materials, and work
3performed or to be performed and the home improvement contract
4price.
52. A person, who is acting as a contractor, is guilty of
6home improvement fraud if the person enters, or offers to
7enter, into a home improvement contract, and intentionally does
8any of the following:
9a. Uses or employs a false pretense or false promise to
10convey that a need exists to enter into a home improvement
11contract.
12b. Knowingly creates or reinforces a consumer’s false
13impression or belief concerning the condition of a consumer’s
14dwelling or property that is the subject of the home
15improvement contract.
16c. Makes a false statement or omits a material fact as to
17the terms of the home improvement contract or the condition of
18a person's dwelling or property that is the subject of the home
19improvement contract.
20d. Receives moneys for the purpose of paying for services,
21labor, materials, or equipment and fails to apply such moneys
22for such purpose by doing any of the following:
23(1) Failing to substantially complete the home improvement
24for which the moneys were provided within the following time
25periods, provided that this subparagraph does not preclude the
26contractor and consumer from agreeing to change the original,
27substantial completion date to accommodate situations unknown
28to either the contractor or consumer at the time of entering
29into the original contract:
30(a) Within thirty days of the date specified in the contract
31for substantially completed work, if such a date is specified.
32(b) Within ninety days of the date of the signed written
33home improvement contract, if no completion date is specified
34in the contract.
35(c) Within ninety days of receipt of moneys paid by the
-2-1consumer to the contractor, if the contract is oral.
2(2) Failing to pay for the services, labor, materials, or
3equipment provided incident to such home improvement.
4(3) Diverting the moneys to a use other than for which the
5moneys were received.
6e. Provides a false individual name or a false business
7name, address, or telephone number to a consumer.
8f. Enters into an unconscionable home improvement contract
9with a consumer.
10(1) For the purposes of this paragraph, if the contract
11price is greater than four times the fair market value of the
12services, material, or work performed or to be performed, it is
13prima facie evidence that a contract is unconscionable.
14(2) Fair market value shall be determined as of the date
15the home improvement contract was entered into. However, if
16such evidence is not readily available, the fair market value
17prevailing within any reasonable time before or after the time
18described, which in commercial judgment or under usage of trade
19would serve as a reasonable substitute, may be used.
203. It shall be evidence of intent that the person, who is
21acting as a contractor, has committed home improvement fraud if
22any of the following are applicable:
23a. The person has previously been convicted under this
24section or under a similar statute of the United States or of
25any state within ten years of the home improvement contract in
26question.
27b. The person is currently subject to any administrative
28orders, judgments, or injunctions that relate to home
29improvements.
304. A person who commits an offense under this section is,
31upon conviction, guilty of a class “D” felony if any of the
32following circumstances are present:
33a. The contract price or the total amount paid to the
34defendant by or on behalf of the consumer is one thousand five
35hundred dollars or more.
-3- 1b. At least one of the consumers who entered into the home
2improvement contract is sixty-two years of age or older at the
3time the consumer and the contractor entered into the home
4improvement contract.
5c. The defendant has previously been convicted under this
6section.
75. If none of the circumstances enumerated in subsection 4
8are present, a person who commits an offense under this section
9is, upon conviction, guilty of an aggravated misdemeanor.
10EXPLANATION
11The inclusion of this explanation does not constitute agreement with
12the explanation’s substance by the members of the general assembly.
13This bill relates to home improvement fraud. The bill
14defines home improvement as any alteration, repair, addition,
15modification, or improvement to a dwelling or the property
16on which it is situated, including but not limited to the
17construction, painting or coating, installation, replacement
18or repair of driveways, sidewalks, swimming pools, unattached
19structures, porches, kitchens, bathrooms, chimneys, fireplaces,
20stoves, air conditioning or heating systems, hot water
21heaters, water treatment systems, electrical wiring or systems,
22plumbing fixtures or systems, doors, windows, roofs, gutters,
23downspouts, and siding.
24The bill provides that a person, who is acting as a
25contractor, is guilty of home improvement fraud if the person
26enters, or offers to enter, into a home improvement contract,
27and intentionally does any of the following: uses or employs a
28false pretense or false promise to convey that there is a need
29to enter into a home improvement contract; knowingly creates or
30reinforces a consumer’s false impression or belief concerning
31the condition of a consumer’s dwelling or property that is
32the subject of the home improvement contract; makes a false
33statement or omits a material fact as to the terms of the home
34improvement contract or the condition of a person’s dwelling or
35property that is the subject of the home improvement contract;
-4-1receives moneys for the purpose of paying for services, labor,
2materials, or equipment and fails to apply such moneys for
3such purpose by failing to substantially complete the home
4improvement for which the moneys were provided within specified
5time periods, failing to pay for the services, labor, materials
6or equipment provided incident to such home improvement, or
7diverting the moneys to a use other than for which the moneys
8were received; provides a false individual name or a false
9business name, address, or telephone number to a consumer; or
10enters into an unconscionable home improvement contract with
11a consumer.
12The bill provides that it shall be evidence of intent that
13the person, who is acting as a contractor, has committed home
14improvement fraud if the person has previously been convicted
15under this bill or under a similar statute of the United States
16or of any state within 10 years of entering into the home
17improvement contract in question or if the person is currently
18subject to any administrative orders, judgments, or injunctions
19that relate to home improvements.
20The bill provides that a person who commits an offense
21under the bill is, upon conviction, guilty of a class “D”
22felony if any of the following circumstances are present: the
23contract price or the total amount paid to the defendant by or
24on behalf of the consumer is $1,500 or more; at least one of
25the consumers who entered into the home improvement contract
26is 62 years of age or older at the time the home improvement
27contract is entered into; or the defendant has previously been
28convicted under the bill. If none of these circumstances are
29present, a person who commits an offense under the bill is,
30upon conviction, guilty of an aggravated misdemeanor.
31A class “D” felony is punishable by confinement for no more
32than five years and a fine of at least $750 but not more than
33$7,500. An aggravated misdemeanor is punishable by confinement
34for no more than two years and a fine of at least $625 but not
35more than $6,250.
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2penalties for contractors who commit home improvement fraud.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. NEW SECTION. 714.29 Home improvement fraud —
2penalties.
31. As used in this section, unless the context otherwise
4requires:
5a. “Consumer” means an individual who owns, leases, or
6rents the residential property that is subject to the home
7improvement contract and engages in the home improvement
8contract with the contractor.
9b. “Contract price” means the total price agreed upon in a
10home improvement contract.
11c. “Contractor” means a person who engages in home
12improvement work under a home improvement contract or solicits
13home improvement contracts whether or not the person interacts
14directly with the consumer.
15d. “Fair market value” means the amount for the home
16improvement which in commercial judgment or under usage of
17trade would be reasonable for services, materials, and work of
18similar quality and workmanship.
19e. “Home improvement” means any alteration, repair,
20addition, modification, or improvement to a dwelling or the
21property on which it is situated, including but not limited
22to the construction, painting or coating, installation,
23replacement or repair of driveways, sidewalks, swimming pools,
24unattached structures, porches, kitchens, bathrooms, chimneys,
25fireplaces, stoves, air conditioning or heating systems, hot
26water heaters, water treatment systems, electrical wiring or
27systems, plumbing fixtures or systems, doors, windows, roofs,
28gutters, downspouts, and siding.
29f. “Home improvement contract” means a written or oral
30agreement whereby a contractor offers or agrees to provide
31a home improvement to a consumer in exchange for payment of
32moneys, regardless of whether any such payment is made.
33g. “Material fact” means a fact that a reasonable person
34would consider important when purchasing a home improvement.
35h. “Unconscionable home improvement contract” means a home
-1-1improvement contract in which an unreasonable difference exists
2between the fair market value of services, materials, and work
3performed or to be performed and the home improvement contract
4price.
52. A person, who is acting as a contractor, is guilty of
6home improvement fraud if the person enters, or offers to
7enter, into a home improvement contract, and intentionally does
8any of the following:
9a. Uses or employs a false pretense or false promise to
10convey that a need exists to enter into a home improvement
11contract.
12b. Knowingly creates or reinforces a consumer’s false
13impression or belief concerning the condition of a consumer’s
14dwelling or property that is the subject of the home
15improvement contract.
16c. Makes a false statement or omits a material fact as to
17the terms of the home improvement contract or the condition of
18a person's dwelling or property that is the subject of the home
19improvement contract.
20d. Receives moneys for the purpose of paying for services,
21labor, materials, or equipment and fails to apply such moneys
22for such purpose by doing any of the following:
23(1) Failing to substantially complete the home improvement
24for which the moneys were provided within the following time
25periods, provided that this subparagraph does not preclude the
26contractor and consumer from agreeing to change the original,
27substantial completion date to accommodate situations unknown
28to either the contractor or consumer at the time of entering
29into the original contract:
30(a) Within thirty days of the date specified in the contract
31for substantially completed work, if such a date is specified.
32(b) Within ninety days of the date of the signed written
33home improvement contract, if no completion date is specified
34in the contract.
35(c) Within ninety days of receipt of moneys paid by the
-2-1consumer to the contractor, if the contract is oral.
2(2) Failing to pay for the services, labor, materials, or
3equipment provided incident to such home improvement.
4(3) Diverting the moneys to a use other than for which the
5moneys were received.
6e. Provides a false individual name or a false business
7name, address, or telephone number to a consumer.
8f. Enters into an unconscionable home improvement contract
9with a consumer.
10(1) For the purposes of this paragraph, if the contract
11price is greater than four times the fair market value of the
12services, material, or work performed or to be performed, it is
13prima facie evidence that a contract is unconscionable.
14(2) Fair market value shall be determined as of the date
15the home improvement contract was entered into. However, if
16such evidence is not readily available, the fair market value
17prevailing within any reasonable time before or after the time
18described, which in commercial judgment or under usage of trade
19would serve as a reasonable substitute, may be used.
203. It shall be evidence of intent that the person, who is
21acting as a contractor, has committed home improvement fraud if
22any of the following are applicable:
23a. The person has previously been convicted under this
24section or under a similar statute of the United States or of
25any state within ten years of the home improvement contract in
26question.
27b. The person is currently subject to any administrative
28orders, judgments, or injunctions that relate to home
29improvements.
304. A person who commits an offense under this section is,
31upon conviction, guilty of a class “D” felony if any of the
32following circumstances are present:
33a. The contract price or the total amount paid to the
34defendant by or on behalf of the consumer is one thousand five
35hundred dollars or more.
-3- 1b. At least one of the consumers who entered into the home
2improvement contract is sixty-two years of age or older at the
3time the consumer and the contractor entered into the home
4improvement contract.
5c. The defendant has previously been convicted under this
6section.
75. If none of the circumstances enumerated in subsection 4
8are present, a person who commits an offense under this section
9is, upon conviction, guilty of an aggravated misdemeanor.
10EXPLANATION
11The inclusion of this explanation does not constitute agreement with
12the explanation’s substance by the members of the general assembly.
13This bill relates to home improvement fraud. The bill
14defines home improvement as any alteration, repair, addition,
15modification, or improvement to a dwelling or the property
16on which it is situated, including but not limited to the
17construction, painting or coating, installation, replacement
18or repair of driveways, sidewalks, swimming pools, unattached
19structures, porches, kitchens, bathrooms, chimneys, fireplaces,
20stoves, air conditioning or heating systems, hot water
21heaters, water treatment systems, electrical wiring or systems,
22plumbing fixtures or systems, doors, windows, roofs, gutters,
23downspouts, and siding.
24The bill provides that a person, who is acting as a
25contractor, is guilty of home improvement fraud if the person
26enters, or offers to enter, into a home improvement contract,
27and intentionally does any of the following: uses or employs a
28false pretense or false promise to convey that there is a need
29to enter into a home improvement contract; knowingly creates or
30reinforces a consumer’s false impression or belief concerning
31the condition of a consumer’s dwelling or property that is
32the subject of the home improvement contract; makes a false
33statement or omits a material fact as to the terms of the home
34improvement contract or the condition of a person’s dwelling or
35property that is the subject of the home improvement contract;
-4-1receives moneys for the purpose of paying for services, labor,
2materials, or equipment and fails to apply such moneys for
3such purpose by failing to substantially complete the home
4improvement for which the moneys were provided within specified
5time periods, failing to pay for the services, labor, materials
6or equipment provided incident to such home improvement, or
7diverting the moneys to a use other than for which the moneys
8were received; provides a false individual name or a false
9business name, address, or telephone number to a consumer; or
10enters into an unconscionable home improvement contract with
11a consumer.
12The bill provides that it shall be evidence of intent that
13the person, who is acting as a contractor, has committed home
14improvement fraud if the person has previously been convicted
15under this bill or under a similar statute of the United States
16or of any state within 10 years of entering into the home
17improvement contract in question or if the person is currently
18subject to any administrative orders, judgments, or injunctions
19that relate to home improvements.
20The bill provides that a person who commits an offense
21under the bill is, upon conviction, guilty of a class “D”
22felony if any of the following circumstances are present: the
23contract price or the total amount paid to the defendant by or
24on behalf of the consumer is $1,500 or more; at least one of
25the consumers who entered into the home improvement contract
26is 62 years of age or older at the time the home improvement
27contract is entered into; or the defendant has previously been
28convicted under the bill. If none of these circumstances are
29present, a person who commits an offense under the bill is,
30upon conviction, guilty of an aggravated misdemeanor.
31A class “D” felony is punishable by confinement for no more
32than five years and a fine of at least $750 but not more than
33$7,500. An aggravated misdemeanor is punishable by confinement
34for no more than two years and a fine of at least $625 but not
35more than $6,250.
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