Co-authored by: Jessica McDade

Pursuant to C.G.S. § 38a-313a, any person who contracts to perform repairs, remediation or mitigation work on a home under a personal or commercial risk policy must follow specific guidelines in order to protect the rights of insureds. This statute, which dictates what the contract with the insured should contain, is strictly enforced.  

Connecticut General Statutes § 38a-313a, imposes specific requirements on those who perform the repair, remediation, or mitigation of any damage or loss that occurs under a personal risk insurance policy. Pursuant to the statute, the party performing the work is required to give written notice to the insured of the work to be completed and the estimated price. See C.G.S. § 38a-313a(a)(1). While previous Connecticut law exempted anyone conducting home improvement work on property that was damaged and would be covered by a homeowners insurance policy from this requirement, C.G.S. § 38a-313a has eliminated that exemption. Now, a contractor performing such work must notify the insured of what work needs to be completed, and what the estimated cost will be. See C.G.S. § 38a-313a(a)(1). The requirements of this statute are strictly enforced.

Additionally, C.G.S. §38a-313a provides several other protections for insureds. For example, it prohibits any person performing repair, remediation, or mitigation from including in its contract a provision or clause that creates a power of attorney. See C.G.S. § 38a-313a(a)(2). More importantly, it prohibits any waiver of the insured’s legal rights against the person performing such repair, remediation, or mitigation. See Id.

If a person performing work for any damage or loss covered under a personal risk insurance policy fails to comply with the requirements outlined in this statute, any contract between such person and the insured is void. See C.G.S. § 38a-313a(b). The statute does not contemplate a contractor’s right to recover for work that may have been done before the contract was found to be void. However, contracts for repair, remediation, or mitigation governed by C.G.S. § 38a-313a are also subject to certain requirements of Connecticut’s Home Improvement Act, which provides meaningful clarification on the issue of a contractor’s right to recover for services already provided. See C.G.S. § 20-429(a)(1)(B)(2)

Under Connecticut’s Home Improvement Act, “a contract for repair, remediation or mitigation as set forth in C.G.S. § 38a-313a shall conform to the requirements set forth in subparagraph (A) of subdivision (1) of this subsection…” C.G.S. § 20-429(a)(1)(B)(2). Subparagraph (A) of subdivision (1) states that a home improvement contract is invalid unless it: “(i) [i]s in writing, (ii) is signed by the owner and the contractor, (iii) contains the entire agreement between the owner and the contractor, (iv) contains the date of the transaction, (v) contains the name and address of the contractor and the contractor’s registration number, (vi) contains a notice of the owner’s cancellation rights in accordance with the provisions of chapter 740, (vii) contains a starting date and completion date, (viii) is entered into by a registered salesman or registered contractor, and (ix) includes a provision disclosing each corporation, limited liability company, partnership, sole proprietorship or other legal entity, which is or has been a home improvement contractor.” C.G.S. § 20-429(a)(1)(A).

While there are instances in which the Home Improvement Act permits recovery for contractors who have performed work, but may not have an entirely valid contract, these instances are very limited. First, a contractor who fails to meet every requirement of the Act may still be entitled to recovery of payment for services performed based on the reasonable value of said work if minimum requirements are met. A contract that, at a minimum, is in writing, is signed by both the owner and contractor, contains the date of the transaction, and contains a starting and ending date for the work may entitle a contractor to recover payment for services rendered. See C.G.S. § 20-429(f).

Second, if the contractor fails to meet even the minimum requirements in subsection(f), he or she may be able recover for worked performed if the homeowner has acted in bad faith. If a homeowner knowingly enters into an invalid contract with a contractor intending to use the Home Improvement Act as a way to receive services from the contractor while avoiding payment, the homeowner has acted in bad faith and the contractor may be entitled to recovery.

The question, then, is how to determine what amount a contractor may be entitled to recover. The Connecticut Supreme Court has addressed this issue. In Walpole Woodworkers, Inc. v. Manning, 307 Conn. 582, 57 A.3d 730 (2012), the Court determined that when the bad faith exception to C.G.S. § 20-429 is triggered, a contractor is generally entitled to recover on the theory of unjust enrichment. The purpose of the theory of unjust enrichment is to prevent one party, in this case, the homeowner, from being enriched at the expense of another, in this case, the contractor. In Walpole, the unjust enrichment cost was calculated by looking at the contract price.

C.G.S. § 38a-313a and C.G.S. § 20-429 create protections for homeowners against invalid contracts with contractors. While both are strictly enforced, it is important to understand that a contractor may still be able to recover under an otherwise invalid contract if the contract meets the requirements of section (f) of C.G.S. § 20-429, or if a homeowner acts in bad faith when entering into a contract with a contractor.

Attorneys Biller and LeMoult limit their practice by choice to the representation of policyholders in connection with significant property damage claims and victims of serious personal injuries.

Biller, Sachs, Zito & LeMoult, 2750 Whitney Avenue, Hamden, Connecticut     Email: [email protected] | Phone: 203-281-1717| Fax: 203-281-7887

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