Print
Senate File 461 - 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.
352. A person, who is acting as a contractor, is guilty of
-1-1home improvement fraud if the person enters, or offers to
2enter, into a home improvement contract, and intentionally does
3any of the following:
4a. Knowingly uses or employs a false pretense or false
5promise to convey that a need exists to enter into a home
6improvement contract.
7b. Knowingly makes a false statement, or knowingly
8creates or reinforces a consumer’s false impression or belief
9concerning the condition of a consumer’s dwelling or property
10that is the subject of the home improvement contract.
11c. Knowingly provides a false personal name or false
12business name, address, or telephone number to a consumer.
13d. Knowingly represents that repairs or work have been
14performed when repairs have not been performed.
15e. Receives moneys from a consumer prior to completion of
16a home improvement for the purpose of paying for services,
17labor, materials, or equipment and intentionally fails to
18substantially complete the home improvement within the time
19agreed to by the consumer and contractor or fails to pay for
20the services, labor, materials, and equipment incident to
21the home improvement. The time for substantial completion
22of the home improvement may be extended by agreement of the
23parties, or for reasonable unforeseen circumstances beyond the
24contractor’s control. It shall be a defense to a violation of
25this subsection if, upon failure to timely perform under the
26agreement of the parties, the contractor returns moneys to the
27consumer that were advanced for services and materials that
28were not provided by that date.
29f. Enters into an unconscionable home improvement contract
30with a consumer.
31(1) For the purposes of this paragraph, if the contract
32price is greater than four times the fair market value of the
33services, material, or work performed or to be performed, it is
34prima facie evidence that a contract is unconscionable.
35(2) Fair market value shall be determined as of the date
-2-1the home improvement contract was entered into. However, if
2such evidence is not readily available, the fair market value
3prevailing within any reasonable time before or after the time
4described, which in commercial judgment or under usage of trade
5would serve as a reasonable substitute, may be used.
63. A person who commits an offense under this section is,
7upon conviction, guilty of a class “D” felony if any of the
8following circumstances are present:
9a. The contract price or the total amount paid to the
10defendant by or on behalf of the consumer is one thousand five
11hundred dollars or more.
12b. At least one of the consumers who entered into the home
13improvement contract is sixty-two years of age or older at the
14time the violation occurred.
15c. The defendant has previously been convicted under this
16section.
174. If none of the circumstances enumerated in subsection 3
18are present, a person who commits an offense under this section
19is, upon conviction, guilty of an aggravated misdemeanor.
205. This section shall not impair, limit, or reduce the
21statutory, common law, or contractual duties, liabilities, or
22rights of any contractor or consumer.
23EXPLANATION
24The inclusion of this explanation does not constitute agreement with
25the explanation’s substance by the members of the general assembly.
26This bill relates to home improvement fraud. The bill
27defines home improvement as any alteration, repair, addition,
28modification, or improvement to a dwelling or the property
29on which it is situated, including but not limited to the
30construction, painting or coating, installation, replacement
31or repair of driveways, sidewalks, swimming pools, unattached
32structures, porches, kitchens, bathrooms, chimneys, fireplaces,
33stoves, air conditioning or heating systems, hot water
34heaters, water treatment systems, electrical wiring or systems,
35plumbing fixtures or systems, doors, windows, roofs, gutters,
-3-1downspouts, and siding.
2The bill provides that a person, who is acting as a
3contractor, is guilty of home improvement fraud if the person
4enters, or offers to enter, into a home improvement contract,
5and intentionally does any of the following: knowingly uses
6or employs a false pretense or false promise to convey that
7there is a need to enter into a home improvement contract;
8knowingly makes a false statement, or knowingly creates or
9reinforces a consumer’s false impression or belief concerning
10the condition of a consumer’s dwelling or property that is the
11subject of the home improvement contract; knowingly provides
12a false personal name or false business name, address, or
13telephone to a consumer; knowingly represents that repairs or
14work have been performed when repairs or work have not been
15performed; receives moneys from a consumer prior to completion
16of a home improvement for the purpose of paying for services,
17labor, materials, or equipment and intentionally fails to
18substantially complete the home improvement within the time
19agreed to by the consumer and the contractor or fails to pay
20for the services, labor, materials, and equipment incident to
21the home improvement; or enters into an unconscionable home
22improvement contract with a consumer.
23The bill provides that a person who commits an offense under
24the bill is, upon conviction, guilty of a class “D” felony if
25any of the following circumstances are present: the contract
26price or the total amount paid to the defendant by or on
27behalf of the consumer is $1,500 or more; at least one of the
28consumers who entered into the home improvement contract is 62
29years of age or older at the time the violation occurred; or
30the defendant has previously been convicted under the bill. If
31none of these circumstances are present, a person who commits
32an offense under the bill is, upon conviction, guilty of an
33aggravated misdemeanor.
34A class “D” felony is punishable by confinement for no more
35than five years and a fine of at least $750 but not more than
-4-1$7,500. An aggravated misdemeanor is punishable by confinement
2for no more than two years and a fine of at least $625 but not
3more than $6,250.
4The bill provides that the bill shall not impair, limit,
5or reduce the statutory, common law, or contractual duties,
6liabilities, or rights of any contractor or consumer.
-5-asf/jh
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.
352. A person, who is acting as a contractor, is guilty of
-1-1home improvement fraud if the person enters, or offers to
2enter, into a home improvement contract, and intentionally does
3any of the following:
4a. Knowingly uses or employs a false pretense or false
5promise to convey that a need exists to enter into a home
6improvement contract.
7b. Knowingly makes a false statement, or knowingly
8creates or reinforces a consumer’s false impression or belief
9concerning the condition of a consumer’s dwelling or property
10that is the subject of the home improvement contract.
11c. Knowingly provides a false personal name or false
12business name, address, or telephone number to a consumer.
13d. Knowingly represents that repairs or work have been
14performed when repairs have not been performed.
15e. Receives moneys from a consumer prior to completion of
16a home improvement for the purpose of paying for services,
17labor, materials, or equipment and intentionally fails to
18substantially complete the home improvement within the time
19agreed to by the consumer and contractor or fails to pay for
20the services, labor, materials, and equipment incident to
21the home improvement. The time for substantial completion
22of the home improvement may be extended by agreement of the
23parties, or for reasonable unforeseen circumstances beyond the
24contractor’s control. It shall be a defense to a violation of
25this subsection if, upon failure to timely perform under the
26agreement of the parties, the contractor returns moneys to the
27consumer that were advanced for services and materials that
28were not provided by that date.
29f. Enters into an unconscionable home improvement contract
30with a consumer.
31(1) For the purposes of this paragraph, if the contract
32price is greater than four times the fair market value of the
33services, material, or work performed or to be performed, it is
34prima facie evidence that a contract is unconscionable.
35(2) Fair market value shall be determined as of the date
-2-1the home improvement contract was entered into. However, if
2such evidence is not readily available, the fair market value
3prevailing within any reasonable time before or after the time
4described, which in commercial judgment or under usage of trade
5would serve as a reasonable substitute, may be used.
63. A person who commits an offense under this section is,
7upon conviction, guilty of a class “D” felony if any of the
8following circumstances are present:
9a. The contract price or the total amount paid to the
10defendant by or on behalf of the consumer is one thousand five
11hundred dollars or more.
12b. At least one of the consumers who entered into the home
13improvement contract is sixty-two years of age or older at the
14time the violation occurred.
15c. The defendant has previously been convicted under this
16section.
174. If none of the circumstances enumerated in subsection 3
18are present, a person who commits an offense under this section
19is, upon conviction, guilty of an aggravated misdemeanor.
205. This section shall not impair, limit, or reduce the
21statutory, common law, or contractual duties, liabilities, or
22rights of any contractor or consumer.
23EXPLANATION
24The inclusion of this explanation does not constitute agreement with
25the explanation’s substance by the members of the general assembly.
26This bill relates to home improvement fraud. The bill
27defines home improvement as any alteration, repair, addition,
28modification, or improvement to a dwelling or the property
29on which it is situated, including but not limited to the
30construction, painting or coating, installation, replacement
31or repair of driveways, sidewalks, swimming pools, unattached
32structures, porches, kitchens, bathrooms, chimneys, fireplaces,
33stoves, air conditioning or heating systems, hot water
34heaters, water treatment systems, electrical wiring or systems,
35plumbing fixtures or systems, doors, windows, roofs, gutters,
-3-1downspouts, and siding.
2The bill provides that a person, who is acting as a
3contractor, is guilty of home improvement fraud if the person
4enters, or offers to enter, into a home improvement contract,
5and intentionally does any of the following: knowingly uses
6or employs a false pretense or false promise to convey that
7there is a need to enter into a home improvement contract;
8knowingly makes a false statement, or knowingly creates or
9reinforces a consumer’s false impression or belief concerning
10the condition of a consumer’s dwelling or property that is the
11subject of the home improvement contract; knowingly provides
12a false personal name or false business name, address, or
13telephone to a consumer; knowingly represents that repairs or
14work have been performed when repairs or work have not been
15performed; receives moneys from a consumer prior to completion
16of a home improvement for the purpose of paying for services,
17labor, materials, or equipment and intentionally fails to
18substantially complete the home improvement within the time
19agreed to by the consumer and the contractor or fails to pay
20for the services, labor, materials, and equipment incident to
21the home improvement; or enters into an unconscionable home
22improvement contract with a consumer.
23The bill provides that a person who commits an offense under
24the bill is, upon conviction, guilty of a class “D” felony if
25any of the following circumstances are present: the contract
26price or the total amount paid to the defendant by or on
27behalf of the consumer is $1,500 or more; at least one of the
28consumers who entered into the home improvement contract is 62
29years of age or older at the time the violation occurred; or
30the defendant has previously been convicted under the bill. If
31none of these circumstances are present, a person who commits
32an offense under the bill is, upon conviction, guilty of an
33aggravated misdemeanor.
34A class “D” felony is punishable by confinement for no more
35than five years and a fine of at least $750 but not more than
-4-1$7,500. An aggravated misdemeanor is punishable by confinement
2for no more than two years and a fine of at least $625 but not
3more than $6,250.
4The bill provides that the bill shall not impair, limit,
5or reduce the statutory, common law, or contractual duties,
6liabilities, or rights of any contractor or consumer.
-5-asf/jh