Legislation Document

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:

Section 1. Amend Chapter 36, Title 6 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:

Subchapter IV. Home Improvement Protections

§ 3684. Definitions .

As used in this subchapter:

(1) “Buyer” means a person who purchases home improvement services or merchandise from a home improvement contractor.

(2) “Contractor” means all persons, firms, partnerships, joint ventures, limited liability companies, and companies, their officers, representatives, agents, and employees, engaged in the trade or commerce of home improvement.

(3) “Home” means a house, dwelling, condominium, townhouse, apartment, or such other residential building or dwelling in which a person resides.

(4) “Home improvement” means as defined in § 916 of Title 11.

(5) “Home improvement contract” means as defined in § 916 of Title 11.

§ 3685. Home improvement contracts.

(a) All home improvement contracts must be in writing.

(b) All buyers entering into home improvement contracts where the buyer is to pay more than $500 shall have a right to cancel a home improvement contract at any time prior to midnight of the third business day after the home improvement contract is signed. A buyer who is 62 years of age or older, or an “adult who is impaired” as defined in § 3902 of Title 31, or a “person with a disability” as defined in § 3901(a)(2) of Title 12, shall have the right to cancel a home improvement contract at any time prior to midnight of the fifth business day after the home improvement contract is signed.

(1) All contracts shall contain in 12-point, bold-faced type the following information and statement:

“YOU, THE BUYER, MAY CANCEL THIS TRANSACTION AT ANY TIME PRIOR TO MIDNIGHT OF THE THIRD BUSINESS DAY AFTER THE DATE OF THIS TRANSACTION. SEE THE ATTACHED NOTICE OF CANCELLATION FORM FOR AN EXPLANATION OF THIS RIGHT. IF YOU ARE 62 YEARS OF AGE OR OLDER OR A PERSON WITH A DISABILITY, YOU MAY CANCEL THIS TRANSACTION AT ANY TIME PRIOR TO MIDNIGHT OF THE FIFTH BUSINESS DAY AFTER THE DATE OF THIS TRANSACTION.”

(2) All contracts shall append a form captioned “Notice of Cancellation,” which must be attached to the home improvement contract or receipt and easily detachable, and shall contain in 12-point, bold-face type a cancellation notice with the name of the contractor, the address of the contractor’s place of business, the date of the transaction, and the date by which the buyer may give the Notice of Cancellation.

(3) A contractor must return all deposits and other money paid to the contractor within 10 days of receiving a Notice of Cancellation from the buyer.

(c) All buyers have the right to waive the cancellation period described in subsection (b). A waiver of the cancellation is invalid unless all of the following are true:

(1) The waiver is in writing and is a separate document from the contract.

(2) The waiver is signed by the buyer and the contractor.

(3) The waiver includes the date the contractor will begin work under the contract.

(4) The waiver includes the following language in 10-point, bold-faced type:

“I, THE BUYER, HEREBY WAIVE THE STATUTORILY PROVIDED CANCELLATION PERIOD FOR HOME IMPROVEMENT CONTRACTS. I REQUESTED THIS WAIVER BECAUSE I WANT THE CONTRACTOR TO BEGIN WORK ON THE DATE INDICATED IN THIS WAIVER, AND THIS DATE IS WITHIN THE CANCELLATION PERIOD. I REQUESTED THIS WAIVER IN RELIANCE ON THE CONTRACTOR’S EXPRESS REPRESENTATION THAT WORK WILL BEGIN ON THE DATE STATED IN THIS WAIVER.”

(d) A deposit for a home improvement contract may not exceed 10% of the contract price unless the contractor requires amounts in excess of 10% to purchase materials or professional services without which the contractor cannot reasonably begin the project, in which case the deposit is limited to 33% of the cost of the materials and professional services needed to commence the contracted work.

(e) If payments, other than a deposit, are to be made before the project is completed, the details of these payments shall be included in a payment schedule in the home improvement contract, which schedule shall set forth the amount of work, materials, or services that are to be performed for each such payment. Any changes to such schedule shall be reflected in an amendment to the home improvement contract.

(f) A contractor must apply for all permits necessary to do the work contemplated by a home improvement contract, if any, by the following dates:

(1) Thirty days after 50% of any deposit due under the home improvement contract is paid.

(2) If no deposit is due, then within 30 days after the home improvement contract is signed or by a mutually agreed upon date set forth in the home improvement contract.

(g) A contractor must start the work contemplated by a home improvement contract by the date set forth in such home improvement contract unless any of the following applies:

(1) The home improvement is delayed by events beyond the contractor’s control and the contractor has notified the buyer in writing of the delay, the specific reason for the delay, and a new start date that will replace the date set forth in the contract .

(2) The buyer has agreed in writing to a later date.

(h) If the contractor cannot start the work by the date set forth in the home improvement contract and no condition set forth in subsection (g) of this section applies, the buyer shall be entitled to terminate the home improvement contract and obtain a refund of all payments made under the contract.

(i) A contractor shall be prohibited from the following:

(1) Including in a home improvement contract any confession of judgment or any waiver of any of the rights to which the buyer is entitled under this subchapter.

(2) Negotiating, transferring, selling, or assigning any note or other evidence of indebtedness to a finance company or other third party prior to midnight of the fifth business day following the day the home improvement contract was signed.

§ 3686. Enforcement.

(a) Any violation of § 3685 of this subchapter shall be deemed an unlawful practice under § 2513 of this title and a violation of subchapter II of Chapter 25 of this title.

(b) The remedies and penalties provided for in this section are not exclusive and shall be in addition to any other procedures, rights or remedies which exist with respect to any other provisions of law including, state and federal criminal prosecutions and common law statutory actions.

(c) Pursuant to § 2521 of Title 29, nothing in this subchapter is intended to conflict with or supersede regulations issued prior to this subchapter’s effective date.

§ 3687. Attorney s’ fees.

(a) In any action brought in connection with a home improvement contract pursuant to § 2525 of this title where a party to that home improvement contract is found to have engaged in a wilful violation of § 2513 of this title, the court shall award to the prevailing party costs, expenses, and reasonable attorneys’ fees incurred in connection with bringing the action.

(b) For purposes of this section, “wilful” means as set forth in § 2522(b) of this title.

Section 2. Amend § 4404, Title 6 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:

§ 4404. Unlawful practices.

Section 2513(b)(2) of this title notwithstanding, in connection with any door-to-door sale, it is an unlawful practice within the meaning of § 2513 of this title for any seller to:

(1) Fail to furnish the buyer with a fully completed receipt or copy of any contract pertaining to such sale at the time of its execution, which is in the same language, e.g., Spanish, as that principally used in the oral sales presentation and which shows the date of the transaction and contains the name and address of the seller, and in immediate proximity to the space reserved in the contract for the signature of the buyer or on the front page of the receipt if a contract is not used and in bold-faced type of a minimum size of 10-point, a statement in substantially the following form: same form set forth in § 3685(b)(1) of this title.

Beginning 1 year after the effective date of this section, such statement shall be printed in an ink of a conspicuous color other than that used for the rest of the contract and/or receipt.

Section 3. Amend § 916, Title 11 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:

§ 916. Home improvement fraud; class B felony; class D felony; class F felony; class G felony, class A misdemeanor.

(a) For the purpose of this section, the following definitions shall apply:

(1) “Contract price” means the total price agreed upon under a home improvement contract.

(2)a.“Debarment” means the prohibition of any home improvement contractor who has received 2 or more qualifying convictions, at least 1 of which was entered after January 1, 2025, from registering or retaining a certificate of registration as a contractor under the Delaware Contractor Registration Act under Chapter 36 of Title 19.

b. An individual subject to debarment may be employed by a business which engages in home improvement, provided that the individual does not engage in solicitation of work for the business.

(2) (3) “Home improvement” means any alteration, repair, addition, modification or improvement to any dwelling or the property on which it is situated, including but not limited to the construction, painting or coating, installation, replacement or repair of driveways, sidewalks, swimming pools, unattached structures, porches, kitchens, bathrooms, chimneys, fireplaces, stoves, air conditioning or heating systems, hot water heaters, water treatment systems, electrical wiring or systems, plumbing fixtures or systems, doors or windows, roofs, gutters, downspouts and siding.

(3) (4) A “home improvement contract” is any agreement, whether written or oral, whereby a person offers or agrees to provide home improvements in exchange for payment in any form, regardless of whether any such payments have been made, and includes all agreements for labor, services, and materials to be furnished and performed under the contract.

(4) (5) A “material fact” is a fact that a reasonable person would consider important when purchasing a home improvement of the variety being offered.

(6) A “qualifying conviction” means a conviction for theft, home improvement fraud, or new home construction fraud or any comparable offense under the laws of any other state, the United States, or any territory of the United States, that arose from any of the following:

a. Operating a business engaged in home improvement.

b. Soliciting for a business engaged in home improvement.

c. Employing individuals to engage in home improvement.

d. Having an ownership interest in a business engaged in home improvement.

(d) (1) Except where the person who purchased the home improvement is 62 years of age or older, or an “adult who is impaired” as defined in § 3902 of Title 31, or a “person with a disability” as defined in § 3901(a)(2) of Title 12, home improvement fraud is a class A misdemeanor, unless the loss to the person who purchased the home improvement is $1500 or more, in which case it is a class G felony. Any individual with 2 or more qualifying convictions, at least 1 of which was entered after January 1, 2025, shall be subject to debarment. For purposes of debarment, a second or later qualifying conviction must not arise from the same incident or series of incidents which led to the first qualifying conviction.

(2) Where the person who purchased the home improvement is 62 years of age or older, or an “adult who is impaired” as defined in § 3902 of Title 31, or a “person with a disability” as defined in § 3901(a)(2) of Title 12, home improvement fraud is a class G felony, unless the loss to the person who purchased the home improvement is $1500 or more, in which case it is a class F felony.

(3) Notwithstanding paragraphs (d)(1) and (2) of this section:

a. Where the loss to the person who purchased the home improvement is at least $50,000 but less than $100,000, home improvement fraud is a class D felony.

b. Where the loss to the person who purchased the home improvement is at least $100,000, home improvement fraud is a class B felony.

(4) Any individual who is subject to debarment under this statute but nevertheless engages in the activity prohibited pursuant to the debarment shall be subject to a Class D felony regardless of whether home improvement fraud has occurred on existing construction projects.