$50,000 GOVERNMENT AGENCY COMPLIANCE GUARANTEE
NAPAC’s Custom Home Remodeling AGREEMENT (CHRA) will comply with ALL Federal and state-mandated disclosures applicable to general home improvement and remodeling work. If You are fined by a government agency for the failure of NAPAC’s Custom Home Remodeling AGREEMENT to contain a legally mandated Home Improvement Work-related disclosure, NAPAC will reimburse you up to $50,000 to cover such fine or penalty.
Please read this entire document to understand the complete terms and CONDITIONS of coverage under this Guarantee, and how to make a claim. CAPITALIZED TERMS ARE DEFINED BELOW.
TERMS OF COVERAGE
The CHRA will contain all Disclosures applicable to general home improvement and remodeling work under federal statutory law and the statutory law of the state in which the CHRA is intended to be used. If a Defect is proven to exist in Your CHRA and the Defect results in a Government Fine imposed upon You, NAPAC will reimburse you up to $50,000 to cover your payment of the Government Fine, subject to the terms and conditions of this Guarantee.
You agree that it is your responsibility to keep your CHRA current, and to utilize the most current release or revision of the CHRA as made available by NAPAC. This Guarantee will not apply in regard to the use of a CHRA bearing a Defect following the date that such Defect has been cured via a revision or new release. You agree to check www.NAPAC.net on an ongoing basis to keep Yourself apprised of any such releases or revisions.
Other than as set forth herein, NAPAC’s Terms of Sale and Service shall govern this Guarantee.
HOW TO CLAIM UNDER THIS GUARANTEE
Within ten (10) business days of receipt of notice from a state or federal government agency that a Defect exists or alleges to exist in some manner in Your CHRA, You must send NAPAC a copy of such notice vialegal@napac.net. Be sure to include Your NAPAC member email address, and any background information regarding your use of the CHRA and your communications, if any, with the state or federal government agency as well as a description of what gave rise to the state or federal government agency reviewing your contractual documents, if you know.
You and NAPAC agree that NAPAC may then utilize its own legal counsel, at NAPAC’s own cost and expense, to contact the state or federal government agency on Your behalf and/or on behalf of NAPAC, to investigate the alleged Defect. NAPAC shall work in reasonable cooperation with Your legal counsel on the matter.
You agree that, without NAPAC’s consent, You will not pay, settle, compromise, or consent to the entry of any judgment in any pending or threatened claim, action, or proceeding in respect of which indemnification could be sought under the provisions of this Guarantee (whether or not NAPAC is an actual or potential party to such claim, action, or proceeding), unless such payment, settlement, compromise, or consent shall be reasonably satisfactory to NAPAC. In the event NAPAC recommends a payment, settlement, compromise, or consent in regard to any pending or threatened claim, action, or proceeding in respect of which indemnification could be sought under the provisions of this Guarantee, and You refuse or decline same, NAPAC’s indemnification liability under this Guarantee shall be limited to the amount for which You would have been indemnified under this Guarantee in the event of such payment, settlement, compromise, or consent had been accepted by You.
If a state or federal government agency takes legal action against You alleging violations of law, only some of which may be covered by this Guarantee, You agree that NAPAC has the right to contact the state or federal government agency on Your behalf and/or on behalf of NAPAC, to seek to resolve only those claims that may be covered by this Guarantee. If the state or federal government agency refuses to seek to resolve only those claims that may be covered by this Guarantee, NAPAC reserves the right to take no further action on Your behalf and NAPAC will only honor an ultimate claim under this Guarantee if any Government Fine imposed on You as a result of the government agency investigation is separately stated as to amount or otherwise individually identifiable by NAPAC.
WHAT VOIDS THIS GUARANTEE
Any of the following will void the coverage of this Guarantee: (i) If You did not obtain the CHRA from NAPAC, or were not a NAPAC member in good standing from the time of purchase of the CHRA through the time of the claim under this Guarantee; (ii) If the claim arises in regard to the use of the CHRA by someone other than You; (iii) If, in NAPAC’s sole determination, you knew or reasonably should have known of the Defect and failed to take reasonable steps to address such Defect, reduce your exposure to same, or immediately notify NAPAC of the suspected Defect; (iv) If You modified the CHRA other than as intended herein or without written approval of NAPAC; (v) If a Defect that NAPAC can reasonably demonstrate is the result of an unintended error of any third-party printing services utilized by NAPAC in fulfilling CHRA orders; (vi) If You failed to utilize the CHRA and any accompanying related documents as required by law; or (vii) If you failed to adhere to the terms and conditions of this Guarantee or Your NAPAC membership.
DEFINITIONS
You. The term “You” or “Your” means the person or entity that is registered as a NAPAC member and purchased a CHRA. The term includes, in the example of an individual NAPAC member, the entity under which that individual NAPAC member conducts business utilizing the CHRA, so long as that entity is reflected in the individual’s NAPAC member registration. The term does not include any affiliated entities of the NAPAC member.
Government Fine. The term “Government Fine” means a monetary fine or penalty assessed by a state or federal government agency against You for a Defect. The term does not include a claim by a governmental agency as to any other damages, such as a claim of legal fees or other violations of statutory law by You.
CHRA. The term “ CHRA” means NAPAC’s Custom Home Remodeling Agreement, including any attachments or disclosures intended to accompany the CHRA. CHRA does not include amendments or change order documents.
Disclosure. The term “Disclosure” means a term or condition that is required by state or federal law to be present in a work order by and between a home improvement contractor and a customer for Home Improvement Work. Disclosure does not include information that would or could exist separate and apart from the CHRA’s pre-printed terms, such as but not limited to (i) information You are responsible for, such as Your name, business registration, contractor license, address, and other identifying information; (ii) finance-related disclosures, terms, or conditions with the customer; or (iii) information You place into the CHRA, such as rescission dates or work descriptions. Disclosure does not include matters that are not legally required by statutory law to be contained within the actual CHRA, such as, for example, disclosures relating to the testing or handling of lead paint or the use of lead-safe work practices. Disclosure also does not apply to matters that are discretionary in nature, or that may be avoided depending on Your specific actions. For example, the use of mechanic lien notices in a given state will not be considered a Disclosure if such use is not uniformly required by statute, but is instead conditioned on the actual use of such mechanic lien by the contractor. Similarly, while it is exceedingly rare for a state to impose product-specific disclosure requirements, and while each CHRA is drafted to include all possible disclosures required under state or federal law, the term Disclosure does not apply to product-specific disclosures.
Defect. The term “Defect” means a Disclosure that is proven by a state or federal government agency to not be present in the CHRA. Defect applies only in regard to disclosure requirements existing under state and federal statutory law. Defect does not include unproven allegations or allegations by a government agency that are discretionary in nature and are not otherwise disclosures mandated by statutory law, such as limitations or interpretations imposed by any court, governmental body, agency, or official to enacted laws or statutes. Defect does not apply as to local laws, laws in a state other than the state for which a CHRA was intended, or to laws not in effect as of the date of purchase of the CHRA by You. Defect does not apply in regard to the affect, effect, interpretation, or enforceability of any conflicting laws or statutes.
Home Improvement Work. The term “Home Improvement Work” means the residential modernization, rehabilitation, repair, alteration, improvement, or construction of real property conducted by a contractor primarily through showroom or in-home sales to a consumer. Typical examples of such work would include, but not be limited to, the sale and installation of replacement windows, doors, kitchen cabinet refacing, roofing, decks, siding, gutters and gutter protection devices, shower and tub liners, water softeners, energy-saving devices, flooring, window treatments, painting, sunrooms, and basement finishing systems. The term does not apply to financing, broker- or lender-related transactions, subcontracting relationships, or to general design-build remodeling work or specialty jobs requiring the use of advanced professional tradesmanship, such as plumbing, electrical, or HVAC systems. Please contact NAPAC at legal@napac.net with any questions or concerns in regard to this coverage.
