Missouri statute addresses how residential contractors are to conduct business in Missouri. A residential contractor is prohibited from advertising or promising to pay or rebate all or any portion of any insurance deductible as an inducement to the sale of goods or services.
A person who has entered into a written contract with a residential contractor to provide goods or services to be paid under a property and casualty insurance policy may cancel the contract prior to midnight on the fifth business day after the insured party has received written notice from the insurer that all or any part of the claim or contract is not a covered loss under the insurance policy. Per Missouri statute, cancellation shall be evidenced by the insured party giving written notice of cancellation to the residential contractor at the address stated in the contract. Notice of cancellation, if given by mail, shall be effective upon deposit into the United States mail, postage prepaid and properly addressed to the residential contractor. Notice of cancellation need not take a particular form and shall be sufficient if it indicates, by any form or written expression, the intention of the insured party not to be bound by the contract.
Before entering into a contract, regardless whether insurance funds are to pay all or a portion of the costs, Missouri statute requires the residential contractor to:
- Furnish the property owner/insured party a statement in boldface type of a minimum size of 10 points in substantially the following form:You may cancel this contract at any time before midnight on the fifth business day after you have received written notification from your insurer that all or any part of the claim or contract is not a covered loss under the insurance policy. See attached notice of cancellation form for an explanation of this right; and
- Furnish each property owner/insured a fully completed form in duplicate, captioned “NOTICE OF CANCELLATION,” which shall be attached to the contract but easily detachable, and which shall contain, in boldface type of a minimum size of 10 points, the following statement:NOTICE OF CANCELLATION: If you are notified by your insurer that all or any part of the claim or contract is not a covered loss under the insurance policy, you may cancel the contract by mailing or delivering a signed and dated copy of this cancellation notice or any other written notice to (name of contractor) at (address of contractor’s place of business) at any time prior to midnight on the fifth business day after you have received such notice from your insurer. If you cancel, any payments made by you under the contract, except for certain emergency work already performed by the contractor, will be returned to you within ten business days following receipt by the contractor of your cancellation notice.I HEREBY CANCEL THIS TRANSACTION_____________________________
(insured’s signature)________________________
(date)
Within 10 days after a contact has been cancelled, the contractor is required to repay the owner or possessor of residential real estate any payments, partial payments or deposits made and any note or other evidence of indebtedness given to the contractor as a whole or potential payment. If, however, the contractor has performed any 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.
Any person who suffers an ascertainable loss of money or property, real or personal, as a result of the use or employment by another person of a method, act or practice declared unlawful, may bring a private civil action in either the circuit court of the county in which the seller or lessor resides or in which the transaction complained of took place, to recover actual damages. The court may, in its discretion, award punitive damages and may award to the prevailing party attorney’s fees, based on the amount of time reasonably expended, and may provide such equitable relief as it deems necessary and proper.
Conclusion
Contractors perform a myriad of services for property owners who do not have either the time or the skills necessary to perform repair or remodeling services to their property. Reliance on contractors is routine and generally uneventful. But when a storm, tornado or other natural disaster damages your property, oftentimes contractors from outside of the area descend on your community, and that is when problems can arise. Hopefully the information above provides some guidance.