Home Improvement and Single-Family Residences

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California Business and Professions Code Section 7057 provides that a general building contractor is a contractor whose principal contracting business is in connection with any structure built, being built, or to be built, for the support, shelter, and enclosure of persons, animals, chattels, or movable property of any kind.

Attorney Steven R. Lovett has represented building contractors in the Los Angeles area and throughout Southern California for almost 40years. We leverage his profound knowledge of the issues facing those in the building industry in an increasingly complicated construction law landscape. By focusing on preventive law, our Los Angeles construction attorneys are often able to avoid costly litigation.

2006 Changes to the Home Improvement Law

The Home Improvement Laws have been completely revised, effective January 1, 2006. Many contractors purchase form contracts from vendors, then keep them for years. If the contract bears a copyright date that is older than 2006, it must be discarded. All contracts must state the "Approximate Completion Date" as opposed to the date of substantial completion. There are many more bold notices than under the old law. All clauses must be at least 10-point. The contract must advise the homeowner that the contractor does or does not have commercial general insurance and workers' compensation insurance. If the contractor has insurance coverage, the contractor must list the name and telephone number of the insurance company. A new 12-point notice summarizing some of the new laws, change orders and lien laws can be found at California Business and Professions Code ("B & P") Section 7159.4. All change orders must be in writing, unless required by the building department at the jobsite, and must state the effect that the change order will have on progress payments and on the completion date.

Requirements for Contracts Involving Single-Family Residences

For contracts involving new construction of Single-Family Residences, the contract must contain a 10-point Contractors State License Board (CSLB) warning (B &P 7030 (a)), the contractor's name, address and license number (B & P 7044); the approximate dates when work will begin and be substantially completed (B & P 7164); a warning regarding mechanic's liens and a legal description of where the work will be done (B & P 7164); at least a 10-point bold notice that the owner may require a payment or performance bond; if an arbitration clause is used, a specific form is required with a place for both the contractor and homeowner to initial (B & P 7191).

Contracts Involving Home Improvements

In addition to the above requirements for single-family residences, if the contract involves any home improvement (as opposed to new construction), California Business and Professions Code Section 7159 requires that all provisions must be at least 10-point and headings must be at least 10-point bold. The warning about the CSLB must be in at least 12-point type. There must also be a heading: "Description of the Project and Description of the Significant Materials to be used and Equipment to be Installed, " with description of work and materials. There must be another heading: "Contract Price" and the amount of the contract in dollars and cents. If a finance charge is charged, the heading "Finance Charge" is required, with the amount separate from the contract amount. A payment schedule showing the amount of payments in dollars and cents is required.

Also required is a statement that upon payment, lien releases will be provided. Another heading, "Note about Extra Work and Change Orders," is required, with prescribed language describing written authorization on change orders and a sample change order. A provision that provides notice that failure to commence work within 20 days of commencement is violation of License Law is also required, along with a statement that describes what constitutes substantial commencement of work. The heading "Approximate Start Date" with the date of commencement and the heading "Approximate Completion Date" with the date of completion are both required. The heading "List of Documents to Be Incorporated into the Contract" is required, along with a clear description of any other document to be incorporated. A 12-point 3-Day/7-Day Notice of Right to Cancel and Notice of Cancellation is also required, along with a 12-point notice that the customer is entitled to a complete signed copy of contract. Another required heading is the heading "Down Payment" and a 12-point notice that a down payment cannot exceed the lesser of $1000 or 10%.

The Home Improvement law also requires a 12 point notice with schedule of progress payments with a description of each phase of work, a notice re liability insurance (whether the contractor has it or not) and workers' compensation, a 12-Point notice that it is illegal to collect payment for work not yet completed, and the date the buyer signed the contract. For contracts involving the construction of swimming pools, all of the above is required, plus a plan and scale drawing showing the shape, size, dimensions, and construction and equipment specifications of the pool. All home improvement contracts must also attach two forms from the Contractors State License Board, a Home Improvement Checklist and a CSLB Insurance Disclosure form.

Contact Our Law Firm for a Free Telephonic Consultation

As shown above, there are many requirements involved in contracts involving home improvement and single-family residences. It is to your advantage to hire an experienced attorney to help you draft and review your home improvement contracts or handle contract litigation. Contact a Los Angeles construction lawyer by e-mail or call us for a free telephonic consultation to discuss your needs.

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