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Know the Facts: Act No. 193

A number of bills were recently enacted into law during the 2012 Louisiana Legislative Session that may affect you. Garcia Roofing wants their customers to stay informed and to know their rights. Here are few things to keep in mind as you begin the process of working with a contractor on repairs for your home.

Negotiating an agreement with a home improvement contractor:

  • Get your agreement with your home improvement contractor in writing.
  • Submit your estimate of repairs to your insurance company.

The contractor is prohibited by law from paying your deductible or offering you discounts!

  • The contractor is prohibited by law from advertising or promising to pay or rebate all or any portion of your insurance deductible.
  • The contractor is prohibited from paying you or offering you a discount for reasons such as displaying a sign advertising the contractor’s service or for making referrals or recommendations.
  • If the contractor violates the above provisions, your insurance company is not obligated to consider the estimate prepared by the contractor.
  • If the contractor violates the above provisions, you or your insurance company may bring legal action for damages sustained as a result of the contractor’s violation.

Home improvement contracting:

  • Every agreement in excess of $1,500, but not in excess of $75,000 shall be in writing and include the specific language stated on page 2 of the act.
  • Louisiana State Licensing Board of Contractors requires that all contractors be registered with the Board in order to perform services in excess of $1,500 but not to exceed $75,000.
  • In addition to the requirement for worker’s compensation insurance, contractors must furnish proof of general liability insurance in a minimum amount of $100,000 to the Louisiana State Licensing Board of Contractors.
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Notice of cancellation:

  • If given by mail, shall be certified mail, return receipt requested, and effective upon deposit into the US mail, postage prepaid, and properly addressed to the home improvement contractor.
  • Shall be sufficient if it indicates, by any form of written expression, the intention of the insured party not to be bound by the contract.
  • Within 10 days after a contract has been cancelled, the contractor shall tender to the owner or possessor of the residential real estate any payments, partial payments, or deposits made by the insured party and any note or other evidence of indebtedness.
  • If contractor has performed emergency services, acknowledged by the insured in writing to be necessary to prevent damage to the premises, the contractor shall be entitled to the reasonable value of such services.

What if your insurance company refuses to pay?

  • If your insurance company refuses payment, you have 72 hours to cancel the agreement with the contractor.
  • Your notice of cancellation to the contractor does not need to be in any specific form but should indicate your intent not to be bound by the contract.
  • If you give your notice by mail, you must mail it to the contractor by certified mail, return receipt properly requested, postage prepaid, and properly addressed to the home improvement contractor.
  • The contractor has 10 days after the contract has been cancelled to reimburse you any payments, partial payments, or deposits made and any note or other evidence of indebtedness to the contractor.
  • If the contractor has performed emergency services for you, acknowledged by you in writing, you are obligated to pay the reasonable value of those services.

Prohibited Acts

  • Advertising or promising to pay or rebate all or any portion of an applicable insurance deductible as an inducement to the sale of goods or services in connection with the repair or replacement of a roof system is prohibited.
  • A promise to pay or rebate the deductible shall include granting any allowance or offering any discount against the fees to be charged or paying the insured party any form of compensation for any reason.
  • Prohibitions are included but not limited to receiving pay for permitting the home improvement contractor to display a sign or any other type of advertisement at the insured party’s premises or paying an insured party for providing a letter of referral or recommendation. ACT No. 193:

Please read the documents below for more information. Remember, it is important to stay informed! To read complete text of the law go to: www.legis.state.la.us/lss/lss.asp?doc=208400

Act 193 Legal Information
Act 193 Legislation Update
Act 193 Quick Facts Brochure