Relating to registration and bonding requirements for contractors, and providing criminal and civil penalties

The new bond is in addition to any other bond requirements in Code chapter 91C.16, the consumer fraud statute, regardless of whether the person has a direct cause of action under that Code section. Any person damaged in either way may sue directly on the bond and may recover actual damages, court costs, and reasonable attorney fees. The bill defines “home improvement contract” to mean any contract for the improvement or repair of existing residential property and the appurtenances of such property, as specified in the bill, but not including contracts of less than $200 in total. The bill provides that when a suit is filed, the person who sues on the bond shall notify the division of labor services, which shall maintain a public record of all suits commenced. Notification is not a precondition to filing a suit and failure to notify the division does not in any way invalidate a lawsuit. However, bond proceeds cannot be paid out to anyone who has not filed notification. The bill provides that the attorney general may also make a direct claim on a bond or bring an action in equity against the bond on behalf of the state to recover bond proceeds for persons damaged due to a contractor’s breach of contract or violation of the consumer fraud statute in connection with a home improvement contract. The attorney general’s action shall take precedence over all other claims on the bond regardless of the time of filing. The bill requires the issuer of a bond to notify the labor commissioner upon the cancellation of the bond. If a bond is canceled or otherwise ceases to be in effect, the contractor’s registration pursuant to Code chapter 91C shall be void. The failure of a contractor to have a valid bond on file as of the date of a home improvement contract makes the contract and any note or instrument of indebtedness executed or entered into in connection with the contract to the contractor voidable, and shall be a complete defense in any action based on the contract or evidence of indebtedness by the contractor of the contractor’s successors or assigns.6B is guilty of a simple misdemeanor. A simple misdemeanor is punishable by confinement for no more than days or a fine of at least $65 but not more than $625 or by both.16, which allows the attorney general to investigate, issue subpoenas, and commence civil proceedings seeking restraining orders or injunctions prohibiting persons from engaging in unlawful practices or seeking termination of the business affairs of a person engaging in unlawful practices. A court may also impose a civil penalty of up to $40,000 per violation against a person found to have committed an unlawful practice.