After many of the recent storms crossing Georgia, residential roofing contractors became increasingly involved with assisting homeowners in procuring the necessary repairs to storm-damaged roofs. Contractors negotiated with insurance companies, provided documentation to insurance companies, and ultimately performed the necessary repairs to the storm-damaged roofs. In 2011, the Georgia General Assembly amended the Georgia Fair Business Practices Act in a manner that will directly impact these residential roofing contractors.
The Georgia Fair Business Practices Act (“the Act”) was enacted to protect the consuming public from certain acts that the General Assembly believed were unfair or improper in the context of the consumer marketplace. In 2011, it amended the Act to prohibit certain actions by residential roofing contractors and granting certain new rights to homeowners.
The amendments now provide a five-day cancellation period during which a homeowner or other person who contracts with a residential roofing contractor may cancel the repair contract after receiving notice from the insurer that the policy does not provide coverage. In other words, if a homeowner receives notice from its insurance company that no coverage is available, the homeowner may within five days, cancel a repair contract with the roofing contractor. The cancellation must be in writing and provided to the roofing contractor at the address stated in the contract.
The amendments also require that residential roofing contractors provide a notice to the homeowner of their right to cancel the contract. The contractor must also provide a form “Notice of Cancellation.” The language of the Notice must be in a minimum font size of 10 points, in bold-face, and must include the exact statement provided in the statute.
The amendments also affect the payment rights of residential roofing contractors. Where payment is to be made from insurance proceeds, the contractor shall not require any payment from the homeowner until the five-day cancellation period has expired. An exception is made for emergency services, as long as the homeowner acknowledges in writing that such services are necessary to prevent damage. In such case, the payment for such emergency services may be collected at the time the services are rendered. If the contract provides that payment is due before the five-day cancellation period, such provision shall not be enforceable against a homeowner who has cancelled the contract under this provision.
Another important component of the Act relates to prohibitions on residential roofing contractors’ marketing efforts. A residential roofing contractor cannot represent or negotiate, or offer or advertise to represent or negotiate, on behalf of a homeowner any insurance claim in connection with the repair or replacement of a roof. An exception is made for “public adjustors.” In addition, the amendment appears to prohibit advertising or promising to pay or rebate all or any portion of an insurance deductible as an inducement to engage the contractor. This prohibition would apply to offering any discount or an allowance against the fees to be charged, including offering the discount or allowance in exchange for displaying a sign or other advertisement, or paying or providing the homeowner any type of compensation, gift, prize, bonus, coupon, credit, referral fee, or other item of monetary value.
The amendments substantially impact the business of residential roofing contractors. These provisions not only affect the contract rights and payment rights, they also impact the residential roofing contractors’ ability to engage in the above-noted marketing efforts.