FINAL BILL REPORT

SSB 6435

                                  C 182 L 88

BYSenate Committee on Economic Development & Labor (originally sponsored by Senators Lee and Owen)

Changing provisions relating to disclosure by contractors.

Senate Committee on Economic Development & Labor

House Committe on Commerce & Labor

SYNOPSIS AS ENACTED

BACKGROUND:

Any contractor building improvements on real property totaling $1,000 or more is required to supply a disclosure statement designed to alert the customer to the hazards of construction lien claims.  The penalty for failing to provide the disclosure is that the contractor may not bring or maintain any action in any state court to collect amounts due under the contract.  An inadvertent omission of the disclosure to a sophisticated customer could result in the customer refusing to pay without any other justification.  Thus, the penalty probably goes too far and creates a trap for the unwary that was not intended.

SUMMARY:

The penalty is amended to provide that a contractor who fails to provide the required disclosure may not make a claim based on the lien laws, but is not precluded from bringing an ordinary collection action.

The disclosure requirement is limited to residential construction.  An incorrect reference to Chapter 39.08 RCW is corrected to refer to Chapter 39.04 RCW, dealing with public works.  Small commercial contracts between $1,000 and $60,000 are brought within the scope of the bill, not just residential contracts.

VOTES ON FINAL PASSAGE:

      Senate    48     0

      House 97   0 (House amended)

      Senate    48     0 (Senate concurred)

EFFECTIVE:June 9, 1988