Hurricanes bring a myriad of legal issues to the forefront. One of the most important things for any contractor or supplier to remember during hurricane repairs are the price gouging laws. Florida Statute 501.610, commonly referred to as the Price Gouging Statute, states that during a declared state of emergency the rental or sale of essential commodities for an amount that grossly exceeds the average price for that commodity during the 30 days before the declaration of the state of emergency is unlawful. The statute defines a “commodity” as any goods, services, materials, merchandise, supplies, equipment, lumber, and other products necessary for consumption or use as a direct result of the emergency. Inflated prices on the rental or sale of the commodities during the declared state of emergency is unlawful unless the increase in the amount charged is attributable to additional costs incurred in connection with the sale of the commodity. South Carolina has a substantially similar statute, which states it is unlawful to “rent or sell or offer to rent or sell a commodity at an unconscionable price” during a declared disaster.
One of the most common types of damage in a hurricane is residential roofs. With regard the roofing industry, the Price Gouging Statute would apply to a roof that was damaged as a result of a hurricane during a declared state of emergency. Decking, underlayment, shingles, and other materials used when repairing the roof would be subject to the Price Gouging Statute, and it would be unlawful to increase the price of the materials by an amount that grossly exceeds the average price of the commodity during the 30 days prior to the declared state of emergency. In its definition of commodities, the statute specifically mentions lumber and encompasses other materials used as a direct result of the emergency.
The definition also refers to services and resources, which would likely entail a restriction on grossly increasing prices for the labor portion of the roof repair. In a civil suit filed by the Florida attorney general as a result of statewide investigations into price gouging, Sun State Trees & Property Maintenance, Inc., the complaint stated the removal of a tree that damaged one man’s roof was subject to the Price Gouging Statute. After the man complained of the cost of removal, Sun State offered to complete the job for a third of their original offer. This is an example of a service relating to the repair of a roof subjected to the Price Gouging Statute and would imply further roof repair would be included as well.
Despite these restrictions on increasing prices, the Price Gouging Statute seems to understand that increased prices can affect more than just consumers. Contractors, especially roofers, can use things like increased mobilization costs to justify increased prices during a state of emergency. Therefore, so long as the contractor is able to show that increased prices reflected the increase in costs, they can avoid hefty civil and criminal penalties, including fines of up to $1,000 per violation.