Assigned to COM                                                                                                 FOR CAUCUS & FLOOR ACTION

 

 

ARIZONA STATE SENATE

Phoenix, Arizona

 

REVISED

FACT SHEET FOR H.B. 2413

 

swimming pool; spa; construction contracts

 

Purpose

 

Requires a contract between a homeowner and a licensed pool or spa builder to include provisions providing for the purchase of a payment and performance bond, a payment schedule and written notification for customers regarding the right to file a complaint with the Registrar of Contractors.

 

Background

 

Currently, the minimum elements required in a contract between a licensed contractor and a property owner include the name of the contractor and the contractor's business address and license number, the name and address of the owner, the jobsite address or legal description, the date the parties entered into the contract, the estimated date of completion of all work to be performed under the contract and a description of the work to be performed under the contract.

 

Contracts between licensed contractors and property owners must also include the total amount to be paid to the contractor by the owner for all work to be performed under the contract, the amount of any down payment, the amount of any progress payment and the stage of construction that the progress payment is due. Currently, the amount of money that the contractor may collect as a down payment or before completion of the pool or spa are not statutorily addressed and are determined by the property owner and the contractor.

 

H.B. 2413 requires that a contract between a homeowner and a licensed pool or spa builder include provisions providing for a payment schedule with no more than a $1,000 down payment and no more than 30 percent of the contract price paid on completion of each project stage. This bill also requires that contracts include an option for the homeowner to purchase a payment and performance bond. Finally, H.B. 2413 also requires contracts to provide for written notification for customers regarding the right to file a complaint with the Registrar of Contractors (Registrar).

  

According to the Registrar, there is no fiscal impact to the state general fund associated with this measure.

 

Provisions

 

1.      Requires a contract for a residential in-ground swimming pool or spa to contain at least the following:

 

a)      A provision providing the purchaser the opportunity to buy a Registrar-approved standard contractor’s payment and performance bond. Prohibits the contractor from levying a surcharge or service fee.

b)      A payment schedule, as follows:

 

1)      A down payment of up to $1,000 payable on the execution of the contract.

2)      A payment of up to 30 percent of the contract price plus any written change orders after excavation is complete.

3)      A payment of up to 30 percent of the contract price plus any written change orders after infrastructure is installed.

4)      A payment of up to 30 percent of the contract price plus any written change orders after decking materials are installed.

5)      Payment of all remaining sums due on the contract plus any written change orders before finishing materials are applied or the pool or spa is complete.

 

c)      A Registrar-approved notice outlining the purchaser’s right to receive documentation explaining contract provisions and the procedures provided by the Registrar for the resolution of claims and disputes.

 

d)      A Registrar-approved notice outlining the rights of a purchaser regarding home solicitations and referral sales.

 

2.      Stipulates that if the purchaser requires the contractor to furnish a payment and performance bond the payment schedule can be changed in any manner agreed to by the parties to the contract.

 

3.      Requires any changes, additions or deletions to the original contract to be included in a written change order.

 

4.      Specifies that a contractor’s noncompliance with the inclusion of required contract provisions is a violation of statute relating to the grounds for suspension or revocation of a contractor’s license.

 

5.      Requires all written contracts for residential construction to contain a confirmation initialed by the customer verifying the customer has received a notice of the right to file a complaint with the Registrar. Prescribes the statement for the notification.

 

6.      Requires, for all verbal contracts for residential construction, customers be given a preprinted written notification of the right to file a complaint with the Registrar. Prescribes the statement for the notification.

 

7.      Exempts from the notification requirements any person other than a licensed contractor engaging in work on one project that is casual or minor in nature and for which the aggregate contract price is less than $750.

 

8.      Provides for a general effective date.

 

 

 

 

Amendments Adopted by Committee

 

1.      Removes the stipulation that a contractor's noncompliance with the notification requirements is a violation of statute relating to the grounds for suspension or revocation of the license.

 

2.      Makes a conforming change.

 

House Action                                                               Senate Action

 

CED                02/04/02          DP       6-0-0-4                        COM               4/3/02         DPA         5-0-1

3rd Read           03/27/02                     34-22-4

 

 

Prepared by Senate Staff

April 3, 2002