The Home Improvement Contract

Introduction

Dear Licensed Contractor or Consumer:

The Contractors State License Board is pleased to announce the new information, Home Improvement Contracts: Putting the Pieces Together. Although the information is primarily geared toward contractors, it is our hope that this comprehensive look at what must be included in home improvement contracts will benefit both consumers and contractors.

True or False

1. ______ Contracts for $500 or over can be oral or written; depending on the wishes of the contractor and the consumer.
2. ______ It is not necessary to include a license number on the contract, just on any advertising material.
3. ______ It is all right to require more than 10% or $1,000 as a down payment if there are large material costs for the job.
4. ______ Materials to be used do not need to be described in great detail because that can be worked out between the contractor and the consumer at a later time.
5. ______ It is best if the job is completed for the amount specified in the contract; however, if the contract costs more to build than originally thought the consumer will be required to pay the additional cost.
6. ______ It is not necessary to include a statement on the contract about the Contractors State License Board and complaint information.
7. ______ The starting and completion dates do not need to be included in the contract.
8. ______ The contractor is not required to provide lien information to the consumer prior to signing a contract.
9. ______ The three days consumers have to cancel contracts includes Sundays and holidays.
10. ______ Change orders are not part of the contract so they do not have to be in writing.

Answers to Questions 1 - 10

Why do most contractors get their licenses revoked?

The top reasons are:

• poor workmanship,
• job abandonment,
• various contract problems-most commonly for charging the client in excess of the contracted job amount

This Information approved by Board

This information came into being as a recommendation of a Contractors State License Board-appointed Classification and Regulation Task Force. The full board accepted the Task Force's recommendation that an informational booklet on home improvement contracts be developed. The board found that many contractors and consumers were puzzled over what a contract should contain.

But the taskforce did not stop with just making a recommendation. The members also acted as curriculum reviewers for the information. I would like to thank all of them, which included board members Nina Tate, who chaired, and John Chalker, who served as vice-chair. Also serving were Sam Abdulaziz, Attorney; Richard Cohen, California Landscape Contractors Association; Bob Harder, North Coast Builders Exchange; Bud Rodgers, Associated General Contractors; Karmi Speece, Plumbing, Heating, Cooling Contractors; and Johnny Zamrzla, Western Pacific Roofing. I would also like to thank the board's district supervisors for their input and review as the information was developed.

The review process of the information has only begun, because your review and comments are also needed. Help the board build an even better information by completing the survey form. The board also wants to know what other construction-related topics are of interest to licensed contractors so that appropriate educational materials can continue to be developed.

Two of the board's major strategic goals concern consumer and contractor education. The goals are to educate consumers to make informed choices about construction services, and to help licensed contractors strengthen their technical, management and service skills to achieve competent performance. The fact that you are reading this information shows your commitment to meeting the technical requirements involved in writing home improvement contracts. You are to be congratulated for investing in your business by taking the time to educate yourself on contractor law.

Good luck!