The maximum down payment for swimming pools is $200 or 2 percent of the contract price, whichever is less. With respect to a swimming pool contract, the final payment may be made at the completion of the final plastering phase of construction, provided that any installation or construction of equipment, decking, or fencing required by the contract is also completed.

Payments to the contractor cannot exceed the value of the work performed, except for the initial down payment.

If the contractor has not begun the work within 20 days of the contract start date, the payment schedule specified in the contract shall be postponed for the period of time equivalent to the time between when substantial commencement was to have occurred and when it actually occurred.

For more information on liens, consult the "Managing a Business" section at the end of the "California Contractors License Law and Reference Book." See ordering information from the Automated Phone Response System.

Bonds

the contractor furnishes a performance and payment bond, lien and completion bond, bond equivalent or joint control approved by the Registrar of Contractors, which covers full performance and completion of the contract and the bonds; or joint control is furnished by the contractor; or

when parties agree for full payment to be made upon or for a schedule of payments to commence after satisfactory completion of the project.

A joint control is a builder's construction control service which acts as an escrow holder of a consumer's money. A good joint control company manages the disbursement of funds to prevent the contractor from being paid more than the value of the work already completed. A joint control also safeguards the consumer's property from "mechanics' liens" by requiring the contractor to supply lien releases from subcontractors and suppliers as progress payments are made.

A joint control normally includes an analysis of the contract and building plans or specifications, breakdowns of cost, and the preparation of an account from which the funds will be disbursed on regularly scheduled progress payments. An addendum must be incorporated into joint control agreements in order for any joint control company to be considered approved by the Registrar of Contractors. The addendum should prove beneficial to both contractors and consumers.

The Contractors State License Board does not license, have any legal control or maintain lists of approved joint control companies. Approval is implicit if the addendum is used.

This addendum is hereby incorporated into and becomes a part of the Control Agreement attached hereto dated

I . Should any of the terms or provisions of the contract between owner and contractor or of the contract into which this addendum is incorporated conflict with any of the terms or provisions of this addendum, then the terms of this addendum shall prevail.

2. Control agrees to control and disburse funds in the following manner:

a) Supplier or sub-contractor submits to contractor duplicate copies of invoices requesting payment.

b) If payment is justified, based on work completed, control accepts disbursement order or voucher in favor of payee for net amount.

c) After signing by the contractor and the payee concerned, order for payment together with copies of invoices, unconditional lien releases and/or other substantiating data is delivered or mailed to the Control for payment.

3. Prior to issuing payment, Control agrees to verify:

a) That all vouchers have authorized signatures.

b) That adequate unconditional lien releases have been submitted in writing.

c) That sufficient funds are on hand to pay the specific invoice(s) submitted.

4. Prior to issuing final payment, Control agrees to verify that project has passed final inspection by local building authorities, unless the scope of the contracted project does not require a final inspection.

5. After verification of the above, checks shall be made out payable to the supplier or subcontractor, or to the prime contractor and supplier or subcontractor, jointly.

6. Control agrees that in no event shall it disburse payments in excess of 100 percent of the value of the work performed on the project at any time, excluding finance charges.

7. The funds from this account shall be used only for the project described in the contract. Control warrants that work and material paid for by Control has been provided.

8. If this agreement is terminated for any reason prior to disbursement of all monies payable under the contract between Owner and Contractor, all subsequent disbursements to Contractor shall conform to the requirements of section 7159 of the Business and Professions Code.

NOTE: Section 7159 of the Business and Professions Code requires that all change orders be in writing and signed by all parties.

SO AGREED this _______day of_____________ 19____

CONTROL __________________________ OWNER_________________________

CONTRACTOR______________________ OWNER_________________________

Contractors who furnish a joint control as part of the terms of a home improvement contract should be aware that the law prohibits them from having any financial or other interest in the joint control company. Also, it is the contractor's responsibility to determine whether or not the above addendum is included in the control agreement.

If an approved joint control or bond covering the complete contract is not furnished with a home improvement contract, the contractor may not require a down payment in excess of $1,000 or 10 percent of the total contract price, whichever is less. The contract must also contain a schedule of payments stated in dollars and cents and specifically references to the work or services to be performed or the materials and equipment to be supplied. Also, no payments other than the down payment can be in excess of the value of the work (excluding finance charges) performed at any time on the project.