2015 Connecticut General Statutes
Title 20 - Professional and Occupational Licensing, Certification, Title Protection and Registration. Examining Boards
Chapter 400 - Home Improvement Contractors
Section 20-432 - Home Improvement Guaranty Fund.

(a) The commissioner shall establish and maintain the Home Improvement Guaranty Fund.

(b) Each salesman who receives a certificate pursuant to this chapter shall pay a fee of forty dollars annually. Each contractor who receives a certificate pursuant to this chapter shall pay a fee of one hundred dollars annually to the guaranty fund. Such fee shall be payable with the fee for an application for a certificate or renewal thereof. The annual fee for a contractor who receives a certificate of registration as a home improvement contractor acting solely as the contractor of record for a corporation shall be waived, provided the contractor of record shall use such registration for the sole purpose of directing, supervising or performing home improvements for such corporation.

(c) Payments received under subsection (b) of this section shall be credited to the guaranty fund until the balance in such fund equals seven hundred fifty thousand dollars. Annually, if the balance in the fund exceeds seven hundred fifty thousand dollars, the first four hundred thousand dollars of the excess shall be deposited into the consumer protection enforcement account established in section 21a-8a. Any excess thereafter shall be deposited in the General Fund. Any money in the guaranty fund may be invested or reinvested in the same manner as funds of the state employees retirement system, and the interest arising from such investments shall be credited to the guaranty fund.

(d) Whenever an owner obtains a court judgment, order or decree against any contractor holding a certificate or who has held a certificate under this chapter within the past two years of the effective date of entering into the contract with the owner, for loss or damages sustained by reason of performance of or offering to perform a home improvement within this state by a contractor holding a certificate under this chapter, such owner may, upon the final determination of, or expiration of time for, taking an appeal in connection with any such judgment, order or decree, apply to the commissioner for an order directing payment out of said guaranty fund of the amount unpaid upon the judgment, order or decree, for actual damages and costs taxed by the court against the contractor, exclusive of punitive damages. The application shall be made on forms provided by the commissioner and shall be accompanied by a copy of the court judgment, order or decree obtained against the contractor together with a notarized affidavit, signed and sworn to by the owner, affirming that: (1) He or she has complied with all the requirements of this subsection; (2) he or she has obtained a judgment, order or decree, stating the amount thereof and the amount owing thereon at the date of application; and (3) he or she has caused to be issued a writ of execution upon said judgment, order or decree and the officer executing the same has made a return showing that no bank accounts or personal property of the contractor liable to be levied upon in satisfaction of the judgment, order or decree could be found, or that the amount realized on the sale of them or of such of them as were found, under the execution, was insufficient to satisfy the actual damage portion of the judgment, order or decree or stating the amount realized and the balance remaining due on the judgment, order or decree after application thereon of the amount realized, except that the requirements of this subdivision shall not apply to a judgment, order or decree obtained by the owner in small claims court. A true and attested copy of said executing officer’s return, when required, shall be attached to such application and affidavit. No application for an order directing payment out of the guaranty fund shall be made later than two years after the final determination of, or expiration of time for, taking an appeal of said court judgment, order or decree.

(e) Upon receipt of said application together with said copy of the court judgment, order or decree, notarized affidavit and true and attested copy of the executing officer’s return, the commissioner or his designee shall inspect such documents for their veracity and upon a determination that such documents are complete and authentic, and a determination that the owner has not been paid, the commissioner shall order payment out of the guaranty fund of the amount unpaid upon the judgment, order or decree for actual damages and costs taxed by the court against the contractor, exclusive of punitive damages.

(f) Whenever an owner is awarded an order of restitution against any contractor for loss or damages sustained by reason of performance of or offering to perform a home improvement in this state by a contractor holding a certificate or who has held a certificate under this chapter within the past two years of the date of entering into the contract with the owner, in a proceeding brought by the commissioner pursuant to this section or subsection (d) of section 42-110d, or in a proceeding brought by the Attorney General pursuant to subsection (a) of section 42-110m or subsection (d) of section 42-110d, or a criminal proceeding pursuant to section 20-427, such owner may, upon the final determination of, or expiration of time for, taking an appeal in connection with any such order of restitution, apply to the commissioner for an order directing payment out of said guaranty fund of the amount unpaid upon the order of restitution. The commissioner may issue said order upon a determination that the owner has not been paid.

(g) Before the commissioner may issue any order directing payment out of the guaranty fund to an owner pursuant to subsections (e) or (f) of this section, the commissioner shall first notify the contractor of the owner’s application for an order directing payment out of the guaranty fund and of the contractor’s right to a hearing to contest the disbursement in the event that the contractor has already paid the owner or is complying with a payment schedule in accordance with a court judgment, order or decree. Such notice shall be given to the contractor not later than fifteen days after receipt by the commissioner of the owner’s application for an order directing payment out of the guaranty fund. If the contractor requests a hearing, in writing, by certified mail not later than fifteen days after receiving the notice from the commissioner, the commissioner shall grant such request and shall conduct a hearing in accordance with the provisions of chapter 54. If the commissioner does not receive a request by certified mail from the contractor for a hearing not later than fifteen days after the contractor’s receipt of such notice, the commissioner shall determine that the owner has not been paid, and the commissioner shall issue an order directing payment out of the guaranty fund for the amount unpaid upon the judgment, order or decree for actual damages and costs taxed by the court against the contractor, exclusive of punitive damages, or for the amount unpaid upon the order of restitution.

(h) The commissioner or his designee may proceed against any contractor holding a certificate or who has held a certificate under this chapter within the past two years of the effective date of entering into the contract with the owner, for an order of restitution arising from loss or damages sustained by any person by reason of such contractor’s performance of or offering to perform a home improvement in this state. Any such proceeding shall be held in accordance with the provisions of chapter 54. In the course of such proceeding, the commissioner or his designee shall decide whether to exercise his powers pursuant to section 20-426; whether to order restitution arising from loss or damages sustained by any person by reason of such contractor’s performance or offering to perform a home improvement in this state; and whether to order payment out of the guaranty fund. Notwithstanding the provisions of chapter 54, the decision of the commissioner or his designee shall be final with respect to any proceeding to order payment out of the guaranty fund and the commissioner and his designee shall not be subject to the requirements of chapter 54 as they relate to appeal from any such decision. The commissioner or his designee may hear complaints of all owners submitting claims against a single contractor in one proceeding.

(i) No application for an order directing payment out of the guaranty fund shall be made later than two years from the final determination of, or expiration of time for, appeal in connection with any judgment, order or decree of restitution.

(j) Whenever the owner satisfies the commissioner or his designee that it is not practicable to comply with the requirements of subdivision (3) of subsection (d) of this section and that the owner has taken all reasonable steps to collect the amount of the judgment, order or decree or the unsatisfied part thereof and has been unable to collect the same, the commissioner or his designee may in his discretion dispense with the necessity for complying with such requirement.

(k) In order to preserve the integrity of the guaranty fund, the commissioner, in the commissioner’s sole discretion, may order payment out of said fund of an amount less than the actual loss or damages incurred by the owner or less than the order of restitution awarded by the commissioner or the Superior Court. In no event shall any payment out of said guaranty fund be in excess of fifteen thousand dollars for any single claim by an owner.

(l) If the money deposited in the guaranty fund is insufficient to satisfy any duly authorized claim or portion thereof, the commissioner shall, when sufficient money has been deposited in the fund, satisfy such unpaid claims or portions thereof, in the order that such claims or portions thereof were originally determined.

(m) Whenever the commissioner has caused any sum to be paid from the guaranty fund to an owner, the commissioner shall be subrogated to all of the rights of the owner up to the amount paid plus reasonable interest, and prior to receipt of any payment from the guaranty fund, the owner shall assign all of this right, title and interest in the claim up to such amount to the commissioner, and any amount and interest recovered by the commissioner on the claim shall be deposited to the guaranty fund.

(n) If the commissioner orders the payment of any amount as a result of a claim against a contractor, the commissioner shall determine if the contractor is possessed of assets liable to be sold or applied in satisfaction of the claim on the guaranty fund. If the commissioner discovers any such assets, he may request that the Attorney General take any action necessary for the reimbursement of the guaranty fund.

(o) If the commissioner orders the payment of an amount as a result of a claim against a contractor, the commissioner may, after notice and hearing in accordance with the provisions of chapter 54, revoke the certificate of the contractor and the contractor shall not be eligible to receive a new or renewed certificate until he has repaid such amount in full, plus interest from the time said payment is made from the guaranty fund, at a rate to be in accordance with section 37-3b, except that the commissioner may, in his sole discretion, permit a contractor to receive a new or renewed certificate after that contractor has entered into an agreement with the commissioner whereby the contractor agrees to repay the guaranty fund in full in the form of periodic payments over a set period of time. Any such agreement shall include a provision providing for the summary suspension of any and all certificates held by the contractor if payment is not made in accordance with the terms of the agreement.

(P.A. 88-269, S. 11; P.A. 89-251, S. 150, 203; P.A. 90-233, S. 2; 90-321, S. 5; P.A. 91-325, S. 2; P.A. 94-68, S. 3; P.A. 96-117, S. 3; P.A. 97-129; P.A. 99-74, S. 1, 3; P.A. 04-257, S. 105; P.A. 10-9, S. 6; P.A. 13-196, S. 12, 25; P.A. 15-60, S. 6.)

History: P.A. 89-251 amended Subsec. (b) to increase the fee for renewal of a salesman’s certificate from $20 to $40 and increased the fee for renewal of a contractor’s certificate from $50 to $150; P.A. 90-233 amended Subsec. (d) to delete former exclusion of attorney’s fees from consideration as part of judgment amount and amended Subsec. (l) to raise maximum payment from guaranty fund from $5,000 to $10,000; P.A. 90-321 amended section to allow claims to be made against fund when contractor held a certificate within the past two years; P.A. 91-325 amended Subsec. (d) by providing for the submission of bona fide documentation to replace the hearing procedure as a means for a homeowner to be reimbursed from the fund, inserted new Subsec. (e), redesignating former Subsec. (e) as Subsec. (f) and expanding the types of proceedings in which a homeowner could recover and specifying that commissioner could only issue an order of disbursement from the fund upon a determination that the owner has not been paid, added new Subsec. (g) requiring notice to the contractor before any disbursement is made from the fund in the event that the contractor has already paid the homeowner, redesignated former Subsec. (f) as Subsec. (h) and amended it to provide that a designee of commissioner could proceed against a contractor and decide whether to exercise the powers under Sec. 20-426, order restitution and whether to order payment out of the guaranty fund, redesignated Subsec. (g) as Subsec. (i) and amended it to expand the period during which an application for disbursement from the fund could be made from one year to two years from the final determination of, or expiration of time for, appeal in connection with any judgment or order of restitution, deleted former Subsecs. (h) and (i) re hearing procedure, made technical changes in Subsec. (j), deleted former Subsec. (k), relettering remaining Subsecs. accordingly, and amended Subsec. (o), formerly (p), to permit commissioner to exercise discretion as to whether to renew a certificate if the contractor had entered an agreement with commissioner whereby payment would be made in periodic payments over a set period of time; P.A. 94-68 amended Subsec. (c) to require deposit of certain surplus moneys in the Consumer Enforcement Protection Fund, replaced “personal property” with “bank accounts” in Subsec. (d)(3), provided for the revocation of a contractor’s certificate in Subsec. (o) and made technical corrections; P.A. 96-117 amended Subsec. (b) to waive the annual fee for a contractor of record; P.A. 97-129 amended Subsec. (c) to increase the amount deposited into the Consumer Protection Enforcement Fund from $150,000 to $400,000, and amended Subsec. (d) to provide that Subdiv. (3) requirements shall not apply to judgments obtained by owner in small claims court; P.A. 99-74 made gender neutral change and increased maximum allowable payment from guaranty fund from $10,000 to $15,000 for a single claim, effective May 27, 1999; P.A. 04-257 made a technical change in Subsec. (c), effective June 14, 2004; P.A. 10-9 deleted provisions re certified copy of court judgment in Subsecs. (d) and (e), effective May 5, 2010; P.A. 13-196 amended Subsec. (d)(3) by changing “real property” to “personal property” and amended Subsec. (g) by adding provision re contractor’s right to hearing to contest disbursement in the event contractor is complying with payment schedule in accordance with a court judgment, effective June 21, 2013; P.A. 15-60 amended Subsec. (c) by replacing “such fund has an excess” with “the balance in the fund exceeds seven hundred fifty thousand dollars”, amended Subsecs. (d) and (e) by adding references to order or decree, amended Subsec. (g) by changing “shall” to “may” re commissioner issuing order directing payment out of guaranty fund and adding “, order or decree”, amended Subsec. (i) by adding “or decree”, amended Subsec. (j) by adding “, order or decree”, and made technical changes, effective October 1, 2015, and applicable to orders and decrees entered into on or after that date.