During the summer months, many homeowners are interested in making needed repairs or other improvements to their homes. However, before you begin the process, there are some things you should know. The California Contractors State License Board (“CSLB”) requires contractors to include specific language in each Service and Repair Contract between a contractor and an owner or tenant for the performance of a home improvement. Both the contractor and the homeowner need to be aware of important rules regarding these agreements.

Every service contract to repair, remodel, alter, convert, modernize, or add to a residential property, signed by a homeowner or tenant, must include specific language outlining the consumer’s rights. California Business and Professions Code § 7159.10(e) (12)(A) states that every service contract must identify the buyer’s right to cancel the work when 1) the buyer receives the contract signed and dated by the contractor and 2) at any time before the contractor starts the work.

However, even if the work has begun, the buyer may still cancel the contract within three business days of signing the contract for normal service and repairs, or within seven business days of signing a contract to repair or correct conditions resulting from any sudden catastrophic event for which a state of emergency has been declared by a governmental entity. In such a situation, the buyer may still have a right to cancel if any of the following is true:

1. The buyer may cancel the contract if the price, including all labor and materials, is more than $750.00;

2. The buyer may cancel the contract if the buyer did not initiate the contact with the contractor to request the work;

3. The buyer may cancel the contract if the contractor sold the buyer goods or services beyond those reasonably necessary to take care of the particular problem that caused buyer to contact the contractor; or

4. The buyer may cancel the contract if the payment was due or the contractor accepted any money before the work was complete.

A contractors failure to provide a home solicitation contract to a homeowner with a proper notice of cancellation is grounds for disciplinary action and fines by the CSLB. Handyman Connections of Sacramento, Inc. v. Sands (2004) 123 Cal.App. 4th 867.

There are many more important rules governing the required content of Service and Repair Contracts, and each situation is unique. Many contractors have been surprised by consumers who intentionally sign agreements without the proper buyer’s notices and then refuse to pay for services performed. Reid & Hellyer has many years of experience in representing both contractors and homeowners. Should you need assistance in preparing enforceable home improvement agreements, if you have a question about an agreement you have been asked to sign, or if you simply want to review the contract you currently present to consumers, please contact us.