Do You Know the Legal Difference Between Residential and Commercial Roofing Contracts?

Did you know Colorado construction law distinguishes residential roofing contracts from commercial roofing contracts? Residential roofing contracts require specific provisions. If your contract for residential roofing work does not include those specific provisions, your contract may be unenforceable.  The Colorado Roofing Statute, C.R.S. § 6-22-103, protects consumers from predatory roofing contractors. The Statute applies to anyone conducting ‘roofing work’ on ‘residential property’. It sets the contract requirements that roofing contractors must follow for residential roofing work, including a list of required contract terms plus a 72-hour escape hatch for consumers if they enter a predatory contract.

What roofing work is residential work?

The Statute defines roofing work as “construction, reconstruction, alteration, maintenance, or repair of a roof on a residential property and the use of materials and items…all in a manner to comply with plans, specifications, codes, laws, rules, regulations, and roofing industry standards for workmanlike construction.”  A roofing contractor is defined as “An individual or sole proprietorship that performs roofing work or roofing services in this state for compensation; or A firm, partnership, corporation, association, business trust, limited liability company, or other legal entity that performs or offers to perform roofing work in this state on residential property for compensation.” With such encompassing definitions, roofers and construction professionals should exercise caution and ensure their contracts for roofing work comply with the statute.

The Statute applies to residential property, which is defined as, “A detached, one-or two-family dwelling; or Multiple single-family dwellings that are not more than three stories above grade plane height and provide separate means of egress.” The definition excludes multiple attached single-family dwellings unless the repair or replacement of the roof is the responsibility of a Condominium Associations, HOA, or other entity subject to the Colorado Interest Ownership Act. Therefore, knowing who your client is and whether they are authorized to contract for the repairs will be important in determining the application of the Statute.

First steps

1)     Register your Business. Businesses in Colorado are required to register with the Secretary of State. Proper licensing and registration will increase customers’ confidence, elevate your business, and make sure you are within the law.

2)     Obtain and Maintain your License. Colorado does not have a statewide roofing licensure program. Roofers must be licensed in the individual city or county jurisdiction in which they are performing work.  For any contract you enter, ensure your license is up to date within the jurisdiction.          

3)      Make sure your Residential Roofing Contract Complies with the Law. The Roofing statute requires that a roofing contractor provide a written contract to the property owner, signed by both the roofing contractor or his or her designee and the property owner, stating at least the following terms:

1.     The scope of roofing services and materials to be provided.

2.     The approximate dates of service.

3.     The approximate costs of the services based on damages known at the time the contract is entered.

4.     The roofing contractor's contact information.

5.     Identification of the roofing contractor's insurance carrier and its contact information.

6.     The roofing contractor's policy regarding cancellation of the contract and refund of any deposit, including:

a.     A rescission clause allowing the property owner to rescind the contract and obtain a full refund of any deposit within 72 hours after entering the contract; and

b.     A written statement that the property owner may rescind a roofing contract if the property owner planned on paying with the proceeds of a property insurance claim within 72 hours of receiving notice of the claim has been denied in whole or in part.

7.     A statement that if the property owner plans to pay for the roofing services through an insurance claim, the contractor cannot pay, waive, or rebate the homeowner’s insurance deductible in part or in whole.

8.     On the face of the contract, in bold font, a statement indicating that the roofing contractor shall hold in trust any payment from the property owner and that payment will be held in trust until the roofing contractor has delivered roofing materials at the residential property site or has performed a majority of the roofing work on the residential property.

4)     Consider Additional Contract Terms. Additional terms that will improve your ability to ensure that you are paid for your work include terms that the property owner agrees that the roofing contractor will be awarded its attorneys’ fees and costs involved in the collection of any unpaid invoices, as well as terms and conditions governing the roofing contractors’ rights to stop work, terms of change orders, and defamation and public review clauses. To learn more about additional contract terms and clauses that may be right for your roofing business, contact a skilled Colorado construction law attorney at Galvanize Law.