Colorado House Bill 1134 has been enacted in this state and amends Colorado’s requirements for home warranty service contracts issued pursuant to Title 12, Article 10 regulated by the Division of Real Estate.
Current law defines “home warranty service contract” as:
“any contract or agreement whereby a person undertakes for a predetermined fee, with respect to a specified period of time, to maintain, repair, or replace any or all of the following elements of a specified new or preowned home:
- Structural components, such as the roof, foundation, basement, walls, ceilings, or floors;
- Utility systems, such as electrical, air conditioning, plumbing, and heating systems, including furnaces; and
- Appliances, such as stoves, washers, dryers, and dishwashers.”
The law, as amended, will now require that any home warranty service contract that provides for the replacement of a “gas-fueled appliance” must allow the contract holder to replace a gas-fueled appliance with a similar device, of the homeowner’s choosing, that operates on electricity rather than gas. The contract may require the homeowner to pay any additional costs associated with the replacement device that has a retail cost that exceeds the cost of replacing the gas-fueled appliance with another gas-fueled appliance.
In the case of replacement of a gas-fueled furnace, HVAC system, boiler, or water heater, a home warranty service contract must now include terms that allow the homeowner to replace the furnace, HVAC system, boiler, or water heater with a heat pump-based system.
These changes are effective for any home warranty service contracts executed or renewed on or after January 1, 2024.
