New Law for NY Roofers

Every contractor doing roofing or siding work in New York got a new challenge last month. NY General Business Law, § 770(8) and § 771-b set new standards for roofing and related work. To earn the right to collect on the job, your contract has to include new disclosures. The new law is fairly detailed. So stay with me.

Who’s Covered?

Every roofer working on an existing residential or non-residential building. But the definition of “roofing contractor” will be a surprise to many. A “roofing contractor” is any:

independent contractor, day laborer or subcontractor engaged in the business of roofing, gutter, downspout or siding services for a fee or who offers to engage in or solicits roofing-related services, including construction, installation, renovation, repair, maintenance, alteration or waterproofing

Nearly anyone doing work on the roof of an existing commercial or residential building is covered. For example, waterproofing, installing or repairing gutters or downspouts or replacing siding makes you a New York “roofing contractor”. New construction and demolition are excluded.

What’s Required of “Roofing Contractors”

This is where the new law gets down and dirty. A written contract is required. The contract has to include:

• All the disclosures required in NY home improvement contracts.
• The name of the contractor’s liability insurer.
• Confirmation of at least $100,000/$300,000 policy limits.
• Certification that the contractor will provide either (1) a certificate of workers' compensation covering all employees, or (2) A Certificate of Attestation Exemption (CE-200) from the Workers' Compensation Board.

Other Mandates of the New Law

• No payment is allowed until materials are delivered to the job site.
• Roofing jobs have to follow the plans and specs and have to comply with the applicable building code.
• Roofing contractors have to pay for materials and services used on the job once the contractor has been paid.

Special Requirements for Insurance Jobs

• The contractor can’t offer to pay or rebate any of the insurance deductible.
• The owner has three days to cancel the deal after any part of the claim is denied. There’s an exception for emergencies.
• No cancellation form is required in the contract. The deal is cancelled when an owner says the deal is off (by either registered or certified mail).
• Roofing contractors can’t negotiate terms of settlement with the insurance carrier.

The effect of all this is to make every New York roofing, siding or waterproofing job a home improvement project, whether the job is on a residence, apartment, store or office. That’s a major change.

Until now, commercial contractors didn't have to make the pages disclosures required in home improvement contracts: mechanics’ liens, trust funds, progress payments, hourly pay, right to cancel, right to receive a copy of the contract, insurance coverage. Now all that is required if work includes roofing or siding.

There’s good reason to comply with the new law. Technical violations earn a fine of $100. The civil penalty for substantial violations is $250 or 5% of the contract price for each violation. Worse, New York courts won’t enforce a roofing contract that falls short of what the law requires.

It's easy to write contracts that comply precisely with New York’s new roofing act – or the law of any state and for any type of project. Have a look at Construction Contract Writer. The trial version is free.

 

Construction Law Changes in New York and Texas

If you work in either New York or Texas, keep reading. Changes in the law are going to affect how you do business.

First, New York

As I write these words (November 23, 2019), New York Governor Andrew Cuomo is about to sign S.B. 1405, the “storm chaser” bill. There’s no organized opposition to the bill. So, you can assume the bill will go into effect by June 2020.

What’s in the new law? Roofing, siding and waterproofing contracts have to be in writing and must show the name of the roofer’s liability and worker’s comp carriers. Policy limits are $100,000/$300,000 for liability and either workers’ comp coverage or a Certificate of Exemption from the Workers' Comp Board.

No payment on the contract is allowed until materials are on site.

For insured losses:

• Roofing contractors can’t offer to cover any portion of the deductible.
• The owner has three business days to cancel the contract after being informed that any part of the loss is not covered by insurance.
• Emergency work is exempted if the owner furnishes a dated and signed hand-written statement of the emergency and waives the right to cancel.
• Roofers aren’t allowed to negotiate settlement of claims or receive a fee for referral to a claims negotiator.

Failure to comply with this new law bars suit on the contract.

Now to Texas

The new law is similar in some respects to the New York law but covers all insured losses, not just residential roofing. Business and Commerce Code § 2702 became effective September 1, 2019.

Any repair job for $1,000 or more that’s covered at least in part by insurance has to a include a detailed notice in 12-point type:

Texas law requires a person insured under a property insurance policy to pay any deductible applicable to a claim made under the policy. It is a violation of Texas law for a seller of goods or services who reasonably expects to be paid wholly or partly from the proceeds of a property insurance claim to knowingly allow the insured person to fail to pay, or assist the insured person’s failure to pay, the applicable insurance deductible.

It's a Class B misdemeanor (six months in jail) to either (1) omit the contract notice or (2) offer to reimburse the owner’s deductible.

20 States

With the addition of New York and Texas, 20 states now place some form of restriction on contracts for insurance repair work: AL, AZ, GA, IL, IN, KY, LA, MI, MO, MS, NE, NY, OK, SC, SD, TN, TX, UT, WI and WV. The laws are technical and change every year. No matter the type of work or where you build, Construction Contract Writer will draft letter-perfect contracts that comply exactly with the law in your state. The trial version is free.