By Philip J. Truax, Esq. and Zachary T. Graham, Esq.
Ohio’s Consumer Sales Practices Act (the CSPA) makes it unlawful for “suppliers” to engage in unfair, deceptive or unconscionable acts or practices in connection with a wide variety of consumer transactions, including residential construction services. Following the passage of the Home Construction Services Suppliers Act in 2012, the CSPA generally does not apply to new home builders. The CSPA continues, however, to apply to home remodelers, roofers, and other residential contractors, as well many other suppliers of consumer goods and services. Effective yesterday, April 6, 2017, the CSPA added another “unfair and deceptive” act to its list of prohibitions.
Under Senate Bill 227, which modifies discrete portions of the CSPA, “unfair and deceptive” acts now include “… the failure of a supplier to obtain or maintain any registration, license, bond, or insurance required by state law or local ordinance for the supplier to engage in the supplier’s trade or profession is an unfair or deceptive act or practice.” R.C. 1345.02(G). In other words, any failure to maintain – including a failure by inadvertence – any state or locally required license, bond or insurance constitutes a violation of the CSPA and can result in a supplier’s liability to the consumer for treble damages (i.e., triple the amount of actual damages) and attorney’s fees. Consequently, suppliers of residential construction services must be even more vigilant in ensuring their compliance with contractor licensing, bonding or insurance requirements. The alternative may result in contractors incur a new layer of risk and expense they never considered.
The CSPA also governs “home solicitation sales” – which refers to the sale of consumer goods or services at the home of the buyer. Senate Bill 227 modifies the requirements for the language to be included in the Notice of Cancellation attached to contracts for every home solicitation sale, as well as the method of notification from the buyer regarding cancellation of the sale before the Notice of Cancellation has been received from the supplier. Additionally, the requirements for delivery of notice relating to the cancellation of a home solicitation sale have been modified to include delivery by email or fax, in addition to delivery through the mail.
These recent changes to the CSPA may seem insignificant but could have profound impacts on suppliers and consumers. Contractors and suppliers must understand the amendments and take steps to modify their practices and form agreements immediately.