When a homeowner in his or her own home signs a contract for roofing, siding, or windows — or anything that costs more than $25 — he has a right to cancel that contract within 72 hours with full refund without penalty. You, as salesperson, must inform him of that right. Some homeowners know this, but most don't.
ON THE BOOKS Why tell them? Because it's federal law, and in most places, state law as well.
Failure to tell them, says Kevin Tierney, associate of Berenson LLP, a Virginia law firm specializing in the home improvement industry, leaves your company vulnerable in two ways. First, you could be cited by authorities for deceptive selling and marketing practices under the state's Consumer Protection Act, where most cooling-off provisions reside.
Secondly, failure to provide the right-to-cancel information leaves you vulnerable to civil action by the homeowner. That's because the 72-hour period begins when you inform the homeowner of that right. That information should be both oral and written in the contract. It should also be acknowledged with two signed pieces of paper from every party to the contract. If you never informed them, the homeowner “has the right to cancel at any point in the future,” Tierney says — including after the job is complete.
WHEN TO WAIVE Homeowners can waive their right to cancel under certain circumstances, most commonly emergencies. States can extend the cooling-off period — in Alaska, for instance, it's five days — but cannot reduce it. No reason is required for canceling.
So what happens if the homeowner calls to cancel immediately after the cooling-off period ends? Tierney advises not to argue. “It's a losing battle,” he says. “If you win, and you've spent attorney's fees to get there, have you really won anything? If you have no money sunk in the job, you might get a cancellation fee and call it a day.” He suggests calling the customer a final time before ordering the product, seven to 10 days after contract signing.