SB38 -The Consumer Protection/Roofing Bill 

Applying to residential properties for roofing work over $1000, will be signed into law byGovernor Hickenlooper and become effective on Wednesday 6/6. 

There is no .grace period' 
for compliance. The recommendation is to comply with the spirit 
and intent of the law immediately and get contracts printed or altered with newly required
contract language as soon as is practical and possible. 


Therefore, effective 6/6: 
Allow for the stated rescission periods; do not waive, pay or rebate any deductibles; if your 
company requires/accepts deposits from property owners, set up a trust account to hold funds 
as required by law. 


Immediately and always include in the required written & signed contract between the property 
owner and roofing contractor the following information:


• scope of roofing services & materials to be provided 
• cost for same based on damages known at the time the contract is entered into 
• approximate dates of service 
• roofing contractor's contact information 
The statute also requires that the written contract must include provisions

(1) stating that the roofing contractor shall hold in trust any payment from the property owner 
until the roofing contractor has delivered materials or has performed a majority of the work; (2) 
identifying the contractor's surety and liability coverage insurer if applicable; (3) stating the 
contractor's cancellation and refund policy, including a 72 hour right of rescission; (4) statingthat the contract may be rescinded within 72 hours after the property owner receives writtennotice that its insurance claim has been denied; and (5) stating that that contractor cannot pay 
or waive an insurance deductible. 
In an effort to facilitate compliance with the new statute, the CRA consulted with attorney 
Stephen Phillips, of Hendrick, Phillips, Salzman & Flatt who has offered sample language which 
closely monitors the language in the statute for these provisions. Obviously, CRA members 
should feel free to use whatever language they deem suitable. 

1. 
[Name of CRA Member] shall hold in trust any payment received from you until[Name of CRA Member] has delivered roofing materials at the site or has performed amajority of the roofing work on your property. 
*The above provision is to be on the face of the contract in bold face type! 

2. [Name of CRA Member] carries worker's compensation, automobile and commercial generalliability (bodily injury and property damage) insurance. A Certificate of Insurance identifying our 
insurance carrier and the types and amounts of coverage and our insurance contact informationis attached or will be provided to Customer and is incorporated herein by reference and shouldbe considered as part of this contract. 
OR 


[Name of CRA Member's] liability coverage insurer is [Name of CRA's liability insurance carrier(s)] and can be contacted through [Name and contact information for CRA's insurance agent(s) 
or address for CRA's insurance carrier(s). ] 

*'Because the statute refers only to “liability coverage insurer,” it is unknown which liability insurance 
carriers are to be disclosed. I would think that the intent of the statute is to identify the roofing 
contractor's general liability policy, but to be safe, a roofing contractor might provide the name and 
contact for general liability, auto liability and worker's compensation/employer liability policies. If the same 
agent handles all these policies, only one contact would need to be included in the contract'. 

3. You have the right to rescind this contract and obtain a full refund of any deposit within 72hours after entering the contract. If you plan to use the proceeds of a property and casualty 
insurance policy to pay for the roofing work, you may rescind this contract within 72 hours after 
you receive written notice from the property and casualty insurer that your claim has beendenied in whole or in part. However, [Name of CRA Member] is entitled to retain payments or 
deposits to compensate [Name of CRA Member] for roofing work actually performed in aworkmanlike manner consistent with standard roofing industry practices. [Name of CRAMember] cannot pay, waive, rebate, or promise to pay, waive or rebate all or part of any 
insurance deductible applicable to the insurance claim for payment for roofing work on your 
property. 
4. Property Owner is _____ / is not ______ intending to make payment from the proceeds ofa property and casualty insurance policy. 
Other items of advisement: 

CRA Members should consider not beginning any work and/or ordering any materials until after 
the 72 hour right of rescission period(s) have expired. 

Include in contract language a statement regarding entitlement to compensation for custom or 
non-returnable materials that may have been ordered prior to any contract rescission. 

Penalties: 

1) Existing Colorado statute related to property insurance fraud (CRS 18.13.119.5) states thatpaying, waiving or rebating a property owner's insurance deductible is a Class 2 Misdemeanor. 
This bill goes farther to say that if it is proven a deductible was paid/waived/rebated, theinsurance company does not have to consider the estimate from any contractor violating theprovision, and the property owner or the insurer may sue the contractor for any damages relatedto same. Damages may include just the deductible amount, or the cost difference betweenappropriate roofing materials and any lesser quality materials that a contractor may have usedin order to offset the cost of the deductible, etc. Recoverable damages would be case specific. 

2) A contract lacking SB38.s specific written provisions may be found to be unenforceable by 
either party. 

Feel free to contact Amy Hawkins, CRA Government Relations Chairwith any questions at 303.443.4646. 

P.O. Box 740550 Arvada, CO 80006-0550 (303) 484-0549 Fax: (720) 633-9776 
E-mail: debbie@coloradoroofing.org$Website: www.coloradoroofing.org