Contracts, Deposits and Cancellation Rights for Storm Repairs

What the contract should spell out

Pull the checklist from the agencies that deal with the complaints. The FTC's home improvement scam guide and its weather-emergency guide together call for:

• the contractor's name, address, phone number and license number;
• estimated start and completion dates;
• any promises made in conversation about scope and the cost of labor and materials;
• a payment schedule, with no blank spaces anyone could fill in later;
• a written statement of your right to cancel within three business days if you signed at home.

State law often goes further. Colorado's roofing statute, C.R.S. 6-22-103, requires the approximate dates and costs based on damage known when you sign, a physical address and email for the roofer, and the name and contact details of its surety and liability insurer. The pamphlet Illinois requires home repair contractors to hand out (815 ILCS 513/20) adds grounds for termination by either party and the method of payment for the down payment, later payments and the final payment.

Deposits and the payment schedule

FEMA's disaster fraud guidance sets a simple ceiling: pay no more than half the cost of repairs in advance. The FTC adds that you should never pay the full amount up front, that some states cap down payments by law, and that your state or local consumer agency can tell you the limit where you live.

How you pay matters as much as how much. The FTC says to pay by credit card or check and never by wire transfer, gift card, payment app, cryptocurrency or cash, since money sent those ways is almost impossible to get back. If insurance is paying, it suggests arranging a Certificate of Completion with your bank or credit union so the bank pays the contractor for each stage after you approve it.

Two states build a holding rule into roofing contracts. In Colorado and under the Illinois Roofing Industry Licensing Act, the contract must state in bold type that the roofer will hold your payment in trust until it has delivered materials to the site or performed most of the work. Keep the last payment, and any certificate of completion, until the job is finished to your satisfaction.

Cancellation rights: three layers

The federal Cooling-Off Rule

The FTC's Cooling-Off Rule covers sales of $25 or more made at your home and $130 or more at a seller's temporary location. You can cancel until midnight of the third business day, and Saturday counts. The seller must give you two copies of a cancellation form plus a contract or receipt describing the right, and once you cancel it has 10 days to refund you.

The rule does not reach a sale where you called the seller about a bona fide immediate personal emergency and signed a separate handwritten, dated statement waiving the three days (16 CFR 429.0). Because the exclusion requires that you initiated the contact, a deal that began with a contractor knocking on your door does not meet its first condition.

State rescission windows for roofing

Illinois roofing contracts must include a clause letting you rescind within 72 hours of signing and get a full refund of your deposit. Colorado requires the same 72-hour clause and adds a second window: 72 hours after your insurer tells you in writing that the claim is denied in whole or in part. The Colorado roofer must return payments within 10 days of a valid rescission, keeping only what covers work actually performed (C.R.S. 6-22-104).

Cancelling after a claim denial in Illinois

For any home repair paid from insurance, the Home Repair and Remodeling Act lets you cancel before midnight on the earlier of two dates: the fifth business day after your insurer's written notice that the loss is not covered, or the thirtieth business day after the insurer receives your proof of loss. The required pamphlet says payments are returned within 10 business days after the contractor receives the cancellation notice.

Liens: sworn statements and waivers

If your contractor does not pay a supplier or subcontractor, the unpaid party may be able to file a lien against your home. The Illinois pamphlet spells out the defense. Under the state's Mechanics Lien Act, as the pamphlet describes it, you request and the contractor provides a signed, notarized sworn statement listing everyone it hired for your job, their addresses, the amounts about to be paid and the balance still owed, and you collect lien waivers from contractors and subcontractors where appropriate. Lien rules differ by state, so treat that list as the set of questions to ask anywhere and confirm local law with an attorney.

The Texas deductible notice

In Texas, any contract of $1,000 or more for goods or services expected to be paid from a property insurance claim must print a notice in at least 12-point bold type saying the insured must pay the deductible and that helping an insured avoid it violates state law (Business and Commerce Code 27.02). If that paragraph is missing from a Texas storm contract, ask why.

Before you sign, check the price against the National Roofing Directory's roof repair cost and roof replacement cost guides, and confirm your roofer's credentials through its licensing by state page.

Frequently asked questions

Is a handshake deal enough for a small storm repair?

It is risky, and above $1,000 it can break state law: Illinois requires a written contract before home repair work over that amount, and Colorado requires one for residential roofing jobs above it. The FTC's storm guidance says contract rules vary by state and to ask for a written agreement even where none is required.

What happens to my deposit if I cancel?

Under the Cooling-Off Rule the seller has 10 days to refund you. Colorado roofers have 10 days after a valid rescission and may keep only what covers work actually performed, and the Illinois pamphlet sets 10 business days after an insurance-denial cancellation.

When should I ask for lien waivers?

Before you pay, and again before the final payment. The Illinois pamphlet advises requesting a sworn statement of everyone your contractor hired and obtaining lien waivers from contractors and subcontractors as protection against liens from anyone your contractor fails to pay.