Construction Contracts: What is Required to Be in a Home Improvement Contract for Residential Construction?
According to the data cited within the California Residential Remodeling/Renovation Market Study, home improvement is a multi-billion dollar industry in the state. For contractors, the remodeling and renovation business offers many different opportunities. Home improvement projects in California that exceed $500 in cost require a proper license and a written contract. Within this article, our California business lawyer highlights key things that are required to be in a home improvement contract for residential construction.
California CSLB Regulates Home Improvement Contracts
The Contractors State Licensing Board (CSLB) regulates residential home improvement contracts in California. As a construction company or contractor, it is imperative that you ensure full compliance with all CSLB requirements. A well-drafted contract not only ensures that your company will meet regulations, but it can also protect you if a dispute arises with a homeowner.
Key Requirements for a Home Improvement Contract in California
What does a contract for a residential home improvement project need to include in California? Here is an overview of the most notable requirements from the CSLB:
- In writing: Home improvement contracts in California must be in writing to comply with CSLB regulations. A written contract helps to ensure clear terms. If your business is doing a home improvement project for $500 or more, the agreement must be in writing.
- Contractor identification: The home improvement contract must include the contractor’s full name, address, license number, and contact information. It is imperative that a contractor accurately identifies itself within the agreement.
- Description of materials and work: In California, a contract for a home improvement should also include comprehensive details of the materials and work. It should clarify the specific materials, quantities, and the scope of work.
- Permitting information: There should also be terms regarding any permits that will be needed to complete the project. Among other things, this part of the agreement should clarify who is responsible for obtaining the permit(s).
- Detailed payment schedule: A payment schedule, including the down payment and installment amounts, must be clearly outlined. All contractors engaged in residential home improvement work should note that California law puts limits on down payments ($1,000 or 10 percent of the contract, whichever is less).
- Written change order (modifications): Issues can arise during home improvement projects. It is not uncommon for homeowners to request modifications. Any changes to the original contract must be documented with a written change order.
Note: The above listed requirements for residential remodeling and renovation projects in California apply to all home improvement projects valued at $500 or more.
Contact Our Bay Area Business Law Attorney Today
Lynnette Ariathurai is a business law attorney with extensive experience drafting and reviewing contracts. If you have any questions about a construction contract for a home improvement project, we are here as a resource. Contact us today for a fully confidential consultation. From our Fremont law office, our firm represents contracts throughout the Bay Area.