During the spring (and summer) months, there is a significant uptick of residential home improvement projects underway or being scheduled, and therefore, this time of year is critical for home improvement contractors and subcontractors. Also, last year saw a huge increase in the number of home projects undertaken. The COVID pandemic forced more and more people to work from home and stay at home, and in turn, more home projects and renovations came to fruition.
Whether you are a home improvement contractor or a homeowner, this article will help shed light on the requirements of a home improvement contract. Our firm has represented both sides of the (white picket) fence, having represented contractors in enforcing their contracts and consumers in defending against unconscionable, unenforceable contracts.
To begin, it is important to ascertain the local regulations and laws applicable to a home improvement contract. The regulations and laws will vary from state to state. A great resource to start is your county’s Division of Licensing and/or Consumer Affairs. For contractors, it is best practice to be proactive and gather as much information about what is required for you to do business BEFORE you commence your first project. As a homeowner, it is best practice to ascertain what your rights are as a consumer in engaging a contractor, including a simple check to ensure that the contractor is licensed accordingly.
Then, at a minimum, the basic requirements of a home improvement contract is that it is set forth in writing, signed by all parties thereto, and will likely include the following terms:
- The name, address, and telephone number of the contractor
- The license number of the contractor, if applicable
- The estimated start and completion dates
- The description of the work to be performed (also known as the “Scope of Work”)
- The kinds of materials/goods to be provided
- The agreed-upon consideration for the work and materials
- A notice to the consumer that the contractor may be entitled to enforce a claim against the consumer (owner)’s property in accordance with the lien laws applicable to the jurisdiction
- A notice regarding the deposit of all monies relating to the Scope of Work
- A schedule of progress payments, if required/allowable
- A notice regarding the terms of cancellation of the contract
- Legible writing in plain English
It is also a good rule of thumb to make sure that all parties have a copy of the fully-executed contract in their records.
Licensing of home improvement contractors will be dependent upon (i) the jurisdiction and (ii) the type of services/materials/goods to be provided. As stated above, it is best practice to check the local regulatory guidelines for home improvement contractors to determine whether your business requires licensing in order to engage in such a line of work. Then, once that is determined, be sure to timely file your applications and pay all applicable fees and be sure to obtain the appropriate level of insurance for your business. Also, be mindful of renewal dates for your licensing so that you are timely and can continue to engage in your business without delay or disruption. Compliance issues can greatly impact a contractor’s business and its reputation.
Therefore, you cannot go wrong in seeking the advice from an attorney who is familiar with home improvement contracts in your state and in your jurisdiction geographically. It is an investment in your business to ensure that your contract is compliant with the applicable laws and regulations before you attempt to enforce it.
Disclaimer: The information contained in this post is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls and communications. Contacting us, however, does not create an attorney-client relationship.
