Federal Insulation Disclosures for the Home Builder, Remodeler and Supplier
Part 460 of Title 16 of the Code of Federal Regulations, entitled “Labeling and Advertising of Home Insulation,” deals with much more than its name would imply. The regulation deals with home insulation labels, fact sheets, ads, and other promotional materials in or affecting commerce, as “commerce” is defined in the Federal Trade Commission Act. If you are covered by this regulation, breaking any of its rules is an unfair and deceptive act or practice or an unfair method of competition under section 5 of that Act. You can be fined heavily (up to $11,000 plus an adjustment for inflation) each time you break a rule.
Under this regulation, “insulation” is very broadly defined as any material mainly used to slow down heat flow. It may be mineral or organic, fibrous, cellular, or reflective (aluminum foil), in rigid, semirigid, flexible, or loose-fill form, for use in old or new homes, condominiums, cooperatives, apartments, modular homes, or mobile homes. It does not include pipe insulation or any kind of duct insulation except for duct wrap.
You are covered by this regulation if you are an individual, firm, partnership, or corporation which is member of the home insulation industry, including manufacturers, distributors, franchisors, installers, retailers, utility companies, and trade associations. Advertisers and advertising agencies are also covered, and so are labs doing tests for industry members. If you sell new homes to consumers, you are covered.
The regulation requires a home insulation manufacturer to provide certain product information to retailers and installers for the insulation products sold to them, clearly and conspicuously stated on disclosure forms known as “fact sheets.” Each sheet must contain what is listed in the regulation. The product disclosures required for on labels, fact sheets, ads, or other promotional materials are based on tests to be done under the methods found in the regulation and designed by the American Society of Testing and Materials (ASTM).
As a retailer or supplier, if you sell insulation to do-it-yourself customers, you must have fact sheets for the insulation products you sell and you must make the fact sheets available to your customers. You can decide how to do this, as long as your insulation customers are likely to notice them. For example, you can put them in a display, and let customers take copies of them. You can keep them in a binder at a counter or service desk, and have a sign telling customers where the fact sheets are. You need not make the fact sheets available to customers if you display insulation packages on the sales floor where your insulation customers are likely to notice them and each individual insulation package offered for sale contains all package label and fact sheet disclosures required by the regulation.
If you are a new home seller, you must disclose in every sales contract the type, thickness, and R-value of the insulation that will be installed in each part of the house. The only exception to this rule is when the buyer signs a sales contract before you know what type of insulation will be put in the house, or if there is a change in the contract. In such case you can give the buyer a receipt stating this information as soon as you find out.
Remodelers take note: if you install insulation, you must have fact sheets for the insulation products you sell. Before customers agree to buy insulation from you, you must show them the fact sheet(s) for the type(s) of insulation they want. You can decide how to do this. For example, you can give each customer a copy of the fact sheet(s). You can keep the fact sheets in a binder, and show customers the binder before they agree to buy. Installers must give their customers a contract or receipt for the insulation they install. For all insulation except loose-fill and aluminum foil, the receipt must show the coverage area, thickness, and R-value of the insulation you installed. The receipt must be dated and signed by the installer. To figure out the R-value of the insulation, use the data that the manufacturer gives you. If you put insulation in more than one part of the house, put the data for each part on the receipt. You can do this on one receipt, as long as you do not add up the coverage areas or R-values for different parts of the house. Do not multiply the R-value for one inch by the number of inches you installed. For loose-fill, the receipt must show the coverage area, initial installed thickness, minimum settled thickness, R-value, and the number of bags used. For aluminum foil, the receipt must show the number and thickness of the air spaces, the direction of heat flow, and the R-value.
Advertisements for insulation have further requirements, and the makers of claims regarding the R-value or other qualities of their product can be called upon by the FTC to justify their claims. There are even more disclosures and warnings which must accompany energy savings claims, and the regulation is detailed in its requirements.
If you say or imply in your ads, labels, or other promotional materials that insulation or some combination of insulation materials can cut fuel bills or fuel use, you must have a reasonable basis for the claim, and you must offer this statement about savings: “Savings vary. Find out why in the seller’s fact sheet on R-values. Higher R-values mean greater insulating power.”. The regulation imposes additional requirements for claims made in connection with sales of insulation, including other qualification language which must appear on promotional materials, and forbids false statements or implications concerning government agency use or endorsement, compliance with governmental standards or specifications, and product qualification for a tax benefit unless it is true.
This summary of the regulation is not exhaustive, and you should read the current version of the rules to insure that you are in compliance. You must follow these rules each time you import, manufacture, distribute, sell, install, promote, or label home insulation. You must follow them each time you prepare, approve, place, or pay for home insulation labels, fact sheets, ads, or other promotional materials for consumer use. You must also follow them each time you supply anyone covered by this regulation with written information that is to be used in labels, fact sheets, ads, or other promotional materials for consumer use. There are partial exemptions for new home sellers from portions of the regulation, but these are detailed and should be studied in the original with the benfit of counsel. See: 16 CFR 460.1.
————————
Robert J. Incollingo is a South Jersey construction, business and real estate litigation attorney.