It is increasingly common to see contractors and/or salespersons (at times unlicensed!) to go door-to-door attempting to sell homeowners on home improvements such as solar panels, roofing, painting, and/or landscaping, etc. This is called “canvassing” and has recently been a hot topic in recent government and court actions.
Many “canvassers” attempt to sell homeowners on PACE agreements, where a lien is placed on the property for repayment of the home improvements through your property taxes. PACE stands for Property Assessed Clean Energy and many times homeowners are surprised to find substantial increases in their property taxes following misrepresentations made by the canvasser and at times even forged signatures on alleged agreements. In addition, it is common to see PACE arrangements where a small job results in a large payment over time. Non-PACE agreements also exist but often come about under similar circumstances.
As a result, future PACE “loans” have been discontinued in Los Angeles County due to rampant allegations of fraudulent conduct. “Homeowners repeatedly alleged the private home improvement contractors who signed them up for PACE misrepresented how the financing would work, saddling them with loans they could not understand or afford.”1 Other counties are yet to follow suit.
Below are some common issues we’ve seen in the number of lawsuits we’ve filed against home improvement contractors and finance companies.
Language and Translation Issues: The California legislature passed the Home Solicitation Sales Act (“HSSA”), Civil Code § 1689 et seq. to protect consumers, providing that the seller must provide a contract in the language in which the contract was negotiated in. A copy of the agreement must also be provided to the consumer at the time the transaction is entered.
Homeowners may also seek to rescind, or cancel, a contract for the failure to receive a copy of the contract in the language it was negotiated under Civil Code § 1632.
Notices of Cancellation: The HSSA at Civ. Code § 1689.7(a) & (f) specifies the requirements for written and oral notices that must be provided. Failure to provide the oral notice is routinely common. Despite what some companies may consider a minor issue, California courts interpret the HSSA liberally in favor of the consumer. (Weatherall Aluminum Products, Co. v. Scott (1977) 71 Cal.App.3d 245, 249, holding “the message which the Legislature has attempted to convey by the enactment of section 1689.5 et seq. of the Civil Code is ‘Caveat Vendor’” and that a consumer may cancel a contract for noncompliance with the HSSA.)
Misrepresentations Regarding Benefits or Qualities of the Home Improvements: Canvassers frequently are untruthful as to the performance capabilities or benefits of the home improvements. This may result in a violation of the California Consumers Legal Remedies Act (“CLRA”), Civil Code §1750 et seq. (See Allagas, et al. v. BP Solar International Inc., et al., (N.D.Cal., Sept. 8, 2014, No. 14-00560) 2014 U.S. Dist. LEXIS 126314, denying the motion to dismiss CLRA and UCL claims.)
The Allagash plaintiffs alleged that the solar panel company there violated the CLRA by making false representations and warranties about solar panels and failing to disclose facts it was required to disclose. (Id.) The Allagash case involved promises that the solar panels would “drastically reduce or eliminate” electricity bills. (Id.) The Allagash court held that “these statements are ‘factual representations’ that could be ‘likely to deceive a reasonable consumer.’” (Id., quoting Consumer Advocates v. Echostar Satellite Corp. (2003) 113 Cal.App.4th 1351, 1361-62.) “A reasonable consumer could have relied on these statements as descriptions of the quality and power capabilities of the solar panels.” (Id.)
Relevant prohibitions of the CLRA include the following at Civil Code § 1770(a):
(5) Representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities that they do not have or that a person has a sponsorship, approval, status, affiliation, or connection that he or she does not have….
(7) Representing that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model if they are of another….
(14) Representing that a transaction confers or involves rights, remedies, or obligations that it does not have or involve, or that are prohibited by law.
Fraud and/or Negligent Misrepresentation: At times, homeowners may be promised a tax rebate or that the home improvement installation is part of a free, no-cost government program, only to discover those promises were never true. Long-standing claims for fraud may also be asserted.
“One who willfully deceives another with intent to induce him to alter his position to his injury or risk, is liable for any damage which he thereby suffers.” (Civ. Code § 1709.) “The elements of fraud that will give rise to a tort action for deceit are: “‘(a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.’” (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 974.)
Elder Abuse: If you are over the age of 65 at the time of the transaction, you may have an additional claim for violation of the Elder Abuse Act. A violation of Welfare and Institutions Code § 15610.30 occurs by the taking or retaining of real or personal property of an elder or dependent adult for wrongful use or with intent to defraud, or both. Elder consumers may seek actual damages (as discussed above), punitive damages, treble damages, and attorneys’ fees and costs. (Welf. and Inst. Code § 15657.5; and Civ. Code § 3345.)
If you believe you have been taken advantage of by home improvement solicitors or contractors, please contact the attorneys at Golden & Cardona-Loya, LLP for a free consultation. Keep in mind the passing of time may affect your rights and/or possible recovery, so it is important to address these issues as early as possible. As always, Se Habla Español.