Sec. 20-417i. New Home Construction Guaranty Fund.
Sec. 20-417a. Definitions. As used in this section and sections 20-417b to 20-417j, inclusive:
(1) “Certificate” means a certificate of registration issued under section 20-417b;
(2) “Commissioner” means the Commissioner of Consumer Protection or any person designated by the commissioner to administer and enforce this section and sections 20-417b to 20-417j, inclusive;
(3) “Completion” means the stage of construction of a new home in which the new home construction contractor is in receipt of the certificate of occupancy for such new home issued by the municipality in which such new home is constructed;
(4) “Consumer” means (A) the buyer or prospective buyer, or the heir or designated representative of the buyer or prospective buyer, of any new home, or (B) the owner of property on which a new home is being or will be constructed, regardless of whether such owner obtains a building permit as the owner of premises affected pursuant to section 29-263;
(5) “Contract” means any agreement between a new home construction contractor and a consumer for the construction or sale of a new home or any portion of a new home prior to occupancy;
(6) “Engage in the business” means that the person engages in the business for the purpose of compensation or profit;
(7) “New home” means any newly constructed (A) single-family dwelling unit, (B) dwelling consisting of not more than two units, (C) unit, common element or limited common element in a condominium, as said terms are defined in section 47-68a, or (D) unit, common element or limited common element in a common interest community, as said terms are defined in section 47-202;
(8) “New home construction contractor” means any person who contracts with a consumer to construct or sell a new home or any portion of a new home prior to occupancy;
(9) “Person” means one or more individuals, partnerships, associations, corporations, limited liability companies, business trusts, legal representatives or any organized group of persons; and
(10) “Proprietor” means an individual who (A) has an ownership interest in a business entity that holds, or previously held, a certificate of registration issued under section 20-417b, and (B) has been found by a court of competent jurisdiction to have violated any provision of this chapter related to the conduct of a business entity holding a certificate or that has held a certificate issued under this chapter within two years of the effective date of entering into a contract with an owner harmed by the actions of such individual or business entity.
(P.A. 99-246, S. 1; P.A. 00-132, S. 1, 6; 00-196, S. 62, 66; P.A. 01-195, S. 83, 181; P.A. 03-167, S. 1; June 30 Sp. Sess. P.A. 03-6, S. 146(c); P.A. 04-189, S. 1; 04-257, S. 94; P.A. 06-73, S. 1; P.A. 25-53, S. 5; 25-111, S. 9.)
History: P.A. 00-132 redefined “contract” in Subdiv. (3), added new Subdiv. (4) defining “engage in the business”, redesignated former Subdivs. (4) to (7) as Subdivs. (5) to (8), redefined “new home construction contractor” in Subdiv. (5), “new home” in Subdiv. (6), and “consumer” in Subdiv. (8), and added new Subdiv. (9) defining “completion”, effective May 26, 2000; P.A. 00-196 made a technical change in Subdiv. (1), effective June 1, 2000; P.A. 01-195 made a technical change in Subdiv. (6), effective July 11, 2001; P.A. 03-167 redefined “contract” in Subdiv. (3) and “consumer” in Subdiv. (8); June 30 Sp. Sess. P.A. 03-6 replaced Commissioner of Consumer Protection with Commissioner of Agriculture and Consumer Protection, effective July 1, 2004; P.A. 04-189 repealed Sec. 146 of June 30 Sp. Sess. P.A. 03-6, thereby reversing the merger of the Departments of Agriculture and Consumer Protection, effective June 1, 2004; P.A. 04-257 made a technical change in Subdiv. (3), effective July 1, 2004; P.A. 06-73 replaced references to “sections 20-417b to 20-417i, inclusive, and subsection (b) of section 20-421” with “sections 20-417b to 20-417j, inclusive”, where appearing, and made technical changes, effective May 30, 2006 (Revisor's note: In the introductory language and in Subdiv. (2), the comma following the words “this section” was replaced editorially by the Revisors with the word “and” for grammatical accuracy); P.A. 25-53 alphabetized and renumbered existing definitions, added Subdiv. (10) defining “proprietor” and made technical changes in redesignated Subdivs. (4) and (7), effective June 24, 2025; P.A. 25-111 made nearly identical changes, effective June 24, 2025.
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Sec. 20-417i. New Home Construction Guaranty Fund. (a) The commissioner shall establish and maintain the New Home Construction Guaranty Fund.
(b) Each person who receives a certificate pursuant to sections 20-417a to 20-417j, inclusive, shall pay a fee of two hundred forty dollars annually to the New Home Construction Guaranty Fund. Such fees shall be payable with the fee for an application for a certificate or renewal of a certificate.
(c) (1) For fiscal years commencing on or after July 1, 2003, payments received under subsection (b) of this section shall be credited to the New Home Construction Guaranty Fund until the balance in the fund equals six hundred fifty thousand dollars. Annually, if the balance in the fund exceeds six hundred fifty thousand dollars, the first four hundred thousand dollars of the excess shall be deposited in the consumer protection enforcement account established in section 21a-8a. On June 1, 2004, and each June first thereafter, if the balance in the fund exceeds six hundred fifty thousand dollars, the excess shall be deposited in the General Fund.
(2) Any money in the New Home Construction 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 fund.
(d) Whenever a consumer obtains a binding arbitration decision, a court judgment, order or decree against or regarding any new home construction contractor holding a certificate or who has held a certificate under sections 20-417a to 20-417j, inclusive, or against a proprietor, within two years of the date such contractor entered into the contract with the consumer, for loss or damages sustained by reason of any violation of the provisions of sections 20-417a to 20-417j, inclusive, by a person holding a certificate under said sections, such consumer may, upon the final determination of, or expiration of time for taking, an appeal in connection with any such decision, judgment, order or decree, apply to the commissioner for an order directing payment out of the New Home Construction Guaranty Fund of the amount, not exceeding fifty thousand dollars, unpaid upon the decision, judgment, order or decree for actual damages and costs taxed by the court against such contractor or proprietor, exclusive of punitive damages. The application shall be made on forms provided by the commissioner and shall be accompanied by a copy of the decision, court judgment, order or decree obtained against the new home construction contractor or proprietor together with a statement signed and sworn to by the consumer, affirming that the consumer has: (1) Complied with all the requirements of this subsection; (2) obtained a decision, judgment, order or decree stating the amount of the decision, judgment, order or decree and the amount owing on the decision, judgment, order or decree at the date of application; and (3) made a good faith effort to satisfy any such decision, judgment, order or decree in accordance with the provisions of chapter 906, which effort may include causing to be issued a writ of execution upon such decision, judgment, order or decree, provided the officer executing the same has made a return showing that no bank accounts or personal property of such contractor liable to be levied upon in satisfaction of the decision, 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 decision, judgment, order or decree or stating the amount realized and the balance remaining due on the decision, judgment, order or decree after application on the decision, judgment, order or decree of the amount realized, except that the requirements of this subdivision shall not apply to a judgment, order or decree obtained by the consumer in small claims court. A true and attested copy of such executing officer's return, when required, shall be attached to such application. Whenever the consumer satisfies the commissioner or the commissioner's designee that it is not practicable to comply with the requirements of subdivision (3) of this subsection and that the consumer has taken all reasonable steps to collect the amount of the decision, judgment, order or decree or the unsatisfied part of the decision, judgment, order or decree and has been unable to collect the same, the commissioner or the commissioner's designee may, in the commissioner's or the commissioner's designee's discretion, dispense with the necessity for complying with such requirement. No application for an order directing payment out of the fund shall be made later than two years from the final determination of, or expiration of time for taking, an appeal of such decision, court judgment, order or decree and no such application shall be for an amount in excess of fifty thousand dollars.
(e) Upon receipt of such application together with such copy of the decision, court judgment, order or decree, statement and, except as otherwise provided in subsection (d) of this section, true and attested copy of the executing officer's return, the commissioner or the commissioner's designee shall inspect such documents for their veracity and upon a determination that such documents are complete and authentic and that the consumer has not been paid, the commissioner shall order payment out of the New Home Construction Guaranty Fund of the amount not exceeding fifty thousand dollars unpaid upon the decision, judgment, order or decree for actual damages and costs taxed by the court against the new home construction contractor or proprietor, exclusive of punitive damages.
(f) (1) During the period beginning October 1, 2000, and ending June 23, 2025, whenever a consumer is awarded an order of restitution against any new home construction contractor for loss or damages sustained as a result of any violation of the provisions of sections 20-417a to 20-417j, inclusive, by a person holding a certificate or who has held a certificate under said sections within two years of the date such contractor entered into the contract with the consumer, in (A) a proceeding brought by the commissioner pursuant to subsection (i) of this section or subsection (d) of section 42-110d, (B) a proceeding brought by the Attorney General pursuant to subsection (a) of section 42-110m or subsection (d) of section 42-110d, or (C) a criminal proceeding pursuant to section 20-417e, such consumer 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 the New Home Construction Guaranty Fund in an amount not to exceed fifty thousand dollars unpaid upon the order of restitution. The commissioner may issue such order upon a determination that the consumer has not been paid.
(2) Beginning on June 24, 2025, whenever a consumer is awarded an order of restitution against any new home construction contractor or proprietor for loss or damages sustained as a result of any violation of the provisions of sections 20-417a to 20-417j, inclusive, by a person holding a certificate or who held a certificate under said sections within two years of the date such contractor entered into the contract with the consumer, in (A) a proceeding brought by the commissioner pursuant to subsection (i) of this section or subsection (d) of section 42-110d, (B) a proceeding brought by the Attorney General pursuant to subsection (a) of section 42-110m or subsection (d) of section 42-110d, or (C) a criminal proceeding pursuant to section 20-417e, such consumer 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 the New Home Construction Guaranty Fund in an amount not to exceed fifty thousand dollars unpaid upon the order of restitution. The commissioner may issue such order upon a determination that the consumer has not been paid.
(g) Whenever the commissioner orders that payment be made to a consumer out of the New Home Construction Guaranty Fund based on a decision, judgment, order or decree of restitution, the new home construction contractor and the proprietor of such contractor shall be liable for the resulting debt to the fund.
(h) Before the commissioner may issue any order directing payment out of the New Home Construction Guaranty Fund to a consumer pursuant to subsection (e) or (f) of this section, the commissioner shall first notify the new home construction contractor of the consumer's application for an order directing payment out of the fund and of such contractor's right to a hearing to contest the disbursement in the event that such contractor or the proprietor of such contractor has already paid the consumer. Such notice shall be given to the new home construction contractor not later than fifteen days after receipt by the commissioner of the consumer's application for an order directing payment out of the fund. If the new home construction contractor requests a hearing, in writing, 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 written request for a hearing from the new home construction contractor on or before the fifteenth day from such contractor's receipt of such notice, the commissioner shall conclude that the consumer has not been paid, and the commissioner shall issue an order directing payment out of the fund for the amount not exceeding fifty thousand dollars unpaid upon the judgment, order or decree for actual damages and costs taxed by the court against such contractor or the proprietor of such contractor, exclusive of punitive damages, or for the amount not exceeding fifty thousand dollars unpaid upon the order of restitution.
(i) The commissioner or the commissioner's designee may proceed against any new home construction contractor holding a certificate or who has held a certificate under sections 20-417a to 20-417j, inclusive, within two years of the date such contractor entered into the contract with the consumer, for an order of restitution arising from loss or damages sustained by any consumer as a result of any violation of the provisions of said sections 20-417a to 20-417j, inclusive, by such contractor or the proprietor of such contractor. Any such proceeding shall be held in accordance with the provisions of chapter 54. In the course of such proceeding, the commissioner or the commissioner's designee shall decide whether to (1) exercise the powers specified in section 20-417c, (2) order restitution arising from loss or damages sustained by any consumer as a result of any violation of the provisions of sections 20-417a to 20-417j, inclusive, and (3) order payment out of the New Home Construction Guaranty Fund. Notwithstanding the provisions of chapter 54, the decision of the commissioner or the commissioner's designee shall be final with respect to any proceeding to order payment out of the fund and the commissioner and the commissioner's designee shall not be subject to the requirements of chapter 54 as such requirements relate to an appeal from any such decision. The commissioner or the commissioner's designee may hear complaints of all consumers submitting claims against a single new home construction contractor in one proceeding.
(j) No application for an order directing payment out of the New Home Construction Guaranty Fund shall be made later than two years from the final determination of, or expiration of time for, an appeal in connection with any judgment, order or decree of restitution, and no such application shall be for an amount in excess of fifty thousand dollars.
(k) In order to preserve the integrity of the New Home Construction Guaranty Fund, the commissioner, in the commissioner's sole discretion, may order payment out of the fund of an amount less than the actual loss or damages incurred by the consumer or less than the order of restitution awarded by the commissioner or the Superior Court. In no event shall any payment out of the fund be in excess of fifty thousand dollars for any single claim by a consumer.
(l) If the money deposited in the New Home Construction Guaranty Fund is insufficient to satisfy any duly authorized claim or portion of a claim, the commissioner shall, when sufficient money has been deposited in the fund, satisfy such unpaid claims or portions of claims not exceeding fifty thousand dollars, in the order that such claims or portions of claims were originally determined.
(m) Whenever the commissioner has caused any sum to be paid from the New Home Construction Guaranty Fund to a consumer, the commissioner shall be subrogated to all of the rights of the consumer up to the amount paid plus reasonable interest, and prior to receipt of any payment from the fund, the consumer shall assign all of the consumer's 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 in the fund.
(n) If the commissioner orders the payment of any amount as a result of a guaranty fund claim against a new home construction contractor or proprietor, the commissioner shall determine if such contractor is possessed of assets liable to be sold or applied in satisfaction of the claim on the New Home Construction Guaranty Fund. If the commissioner discovers any such assets, the commissioner may request that the Attorney General take any action necessary for the reimbursement of the fund.
(o) If the commissioner orders the payment of an amount as a result of a guaranty fund claim against a new home construction contractor, the commissioner may, after notice and hearing in accordance with the provisions of chapter 54, revoke the certificate of such contractor and such contractor shall not be eligible to receive a new or renewed certificate until such contractor has repaid such amount in full, plus interest from the time such payment is made from the New Home Construction Guaranty Fund, at a rate to be in accordance with section 37-3b, except that the commissioner may, in the commissioner's sole discretion, permit a new home construction contractor to receive a new or renewed certificate after such contractor has entered into an agreement with the commissioner whereby such contractor agrees to repay the 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 new home construction contractor if payment is not made in accordance with the terms of the agreement.
(P.A. 99-246, S. 9; May 9 Sp. Sess. P.A. 02-1, S. 126; P.A. 06-73, S. 11; P.A. 14-127, S. 3; P.A. 15-60, S. 5; P.A. 21-197, S. 3; P.A. 25-53, S. 6; 25-111, S. 10.)
History: May 9 Sp. Sess. P.A. 02-1 divided Subsec. (c) into subdivisions, adding Subdivs. (2) and (3) re payments received in the fiscal years commencing July 1, 2002, July 1, 2003, and thereafter, effective July 1, 2002; P.A. 06-73 replaced references to “sections 20-417a to 20-417i, inclusive, and subsection (b) of section 20-421” with “sections 20-417a to 20-417j, inclusive,” where appearing, amended Subsec. (c) to delete former Subdivs. (1) and (2) re disposition of payments received for fiscal years commencing prior to July 1, 2002, and for the fiscal year commencing July 1, 2002, respectively, and redesignate existing Subdivs. (3) and (4) as Subdivs. (1) and (2), respectively, amended Subsec. (d) to rephrase language, amended Subsec. (e) to reposition language re exception under Subsec. (d), amended Subsec. (f) to insert Subdiv. designators and replace reference to Sec. 20-417d with Sec. 20-417e in Subdiv. (3), amended Subsec. (h) to insert Subdiv. designators and replace reference to Sec. 20-417b with Sec. 20-417c in Subdiv. (1), amended Subsec. (i) to rephrase language and made technical changes throughout section, effective May 30, 2006; P.A. 14-127 amended Subsec. (d) by changing “real” to “personal” re property of contractor to be levied upon in satisfaction of judgment and adding “or the commissioner's designee's” re discretion to dispense with necessity for complying with requirement, effective July 1, 2014; P.A. 15-60 amended Subsecs. (d) and (e) by adding references to order or decree and deleting “certified” re copy of court judgment, amended Subsec. (g) by adding “, order or decree”, amended Subsec. (i) by adding “or decree”, and made technical changes, effective October 1, 2015, and applicable to orders and decrees entered into on or after that date; P.A. 21-197 amended Subsec. (b) to change biennial fee of $480 to annual fee of $240 and make technical changes, amended Subsecs. (d) and (e) to add references to arbitration decision and replace “notarized affidavit” with “statement”, further amended Subsec. (d) to delete reference to October 1, 2000 and make technical and conforming changes, add “or regarding” before “any new home construction contractor” and delete “the past” before “two years” and amended Subsecs. (f) and (h) to delete “the past” before “two years”, effective July 1, 2022; P.A. 25-53 amended Subsec. (c) to reduce maximum balance of fund, amended Subsecs. (d) and (e) and redesignated Subsecs. (f)(1)(C), (h), (j), (k) and (l) by increasing maximum payment from $30,000 to $50,000, further amended Subsecs. (d) and (e) and redesignated Subsecs. (h), (i) and (n) by adding provisions re proprietor, further amended Subsec. (f) by designating existing provisions as Subdiv. (1) and adding new Subdiv. (2) re order of restitution awarded on or after October 1, 2025, added new Subsec. (g) re liability of contractor and proprietor of contractor, redesignated existing Subsecs. (g) to (n) as Subsecs. (h) to (o), and made technical and conforming changes in Subsecs. (d) to (f) and redesignated Subsecs. (h), (i), (n) and (o), effective June 24, 2025; P.A. 25-111 made nearly identical changes to Subsecs. (d) to (n), except new Subsec. (f)(2) re order of restitution awarded on or after June 24, 2025, and further amended redesignated Subsec. (h) by deleting references to certified mail, effective June 24, 2025.
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