In the wake of the recent storms to hit Northern Colorado, many local homeowners are assessing their damage and being heavily solicited by contractors of various kinds. Be careful. Our firm received a number of calls from people in the months following the Windsor tornado, looking for assistance in dealing with contractors who either did not complete work in a good and workmanlike manner, or in some instances failed to do a job at all after having been paid large sums of money. The reality is, while there are a lot of decent, hard-working contractors who do good work in Northern Colorado, there are just as many fraudulent contractors who drift from storm to storm and hold themselves out as Colorado businesses, preying on homeowners dealing with hail damage. Unfortunately, it is difficult to pursue legal remedies against such frauds when they have disappeared within a few months.
Therefore, take your time and protect yourself as you arrange for repair work to be done. In particular, if you are looking to hire a roofing contractor, you should know that the Colorado General Assembly enacted a law last June known as the “Colorado Residential Roofing Act.” The Act was specifically designed to protect consumers who engage a roofing contractor to perform residential roof repair work, and applies to any residential roofing work in excess of $1,000. Under this law, a roofing contractor must have a written and signed contract with a homeowner, and that contract must include the following items:
- A description of the scope of work & materials to be provided
- A specific dollar amount for the cost of the repair work, based on damages known at the time the contract is entered into (it cannot simply say that the work will be done for whatever amount an insurance company will pay).
- The approximate dates of service
- The roofing contractor’s contact information
- The identification of contractor’s surety and liability coverage insurer and their contact information
- The contractor’s policy regarding cancellation of contract and refund of any deposit including a rescission clause allowing the property owner to rescind the contract for roofing services and obtain a full refund of any deposit within 72 hours after entering the contract.
- A statement that if the property owner plans to pay for the roofing services through an insurance claim, the contractor cannot pay, waive or rebate the homeowner’s insurance deductible in part or in whole.
- A statement that the contractor shall hold in trust any payment from the property owner until the contractor has delivered roofing materials to the job site or has performed a majority of the roofing work on the property.
- A statement that the property owner may rescind a contract for services, the payment for which will be made from the proceeds of a property insurance claim, within 72 hours after receiving notice from their insurer that the claim is denied in whole or in part.
As indicated above, the Act specifically prohibits a roofing contractor from paying, waiving or rebating an insurance deductible for a property owner. (Nor may a contractor advertise or promise to waive, pay or rebate same). If a contractor shows up on your doorstep offering to do so, it is a big red flag that the contractor may not actually be licensed in Colorado, even if they represent themselves to be.
The bottom line is that you should do your homework before hiring any contractor, including a roofer. Ask your friends and neighbors for recommendations for a local, reputable contractor. Investigate the contractor on-line, including checking the Colorado Secretary of State website to see if the business is registered in this state and whether the business is in good standing. Ask the contractor for local references of other work completed and a certificate documenting insurance coverage is currently in effect. Finally, read any contract carefully, take your time, and do not pay in full for a job until it is completed.
If you have additional questions or concerns regarding dealing with contractors and insurance claims, we have several knowledgeable attorneys experienced in these types of issues who can assist you. Please give us a call at 970-482-4011.