Raymond W. Hackbarth, Jr.

Construction Industry Newsletter
By Attorney Raymond W. Hackbarth, Jr.

Selecting a Contractor

First, request that the contractor show you his pocket California contractor's license and his California driver's license to verify his licensure and identity. Next, visit the Contractors State License Board (CSLB) website http://www.cslb.ca.gov/ to confirm that the contractor is indeed licensed, that the contractor's license is in good standing, that the contractor has workers compensation insurance for his employees, that the contractor has a license bond currently in effect, and that the contractor does not have a disciplinary record. Also, check the Better Business Bureau's website http://www.labbb.org for complaints against the contractor and their resolution. Additionally, obtain references from the contractor of home owners for whom the contractor has recently done similar work. Then contact the references to verify that the contractor is honest, competent, and generally reliable.

Home Improvement Contracts

Contracts may be either oral or written. Of course, a written contract best protects the parties by detailing the terms of their agreement. For that reason California law requires that a home improvement contract be in writing and contain numerous provisions for the protection of the homeowner. A contract involving the repair, remodel, alteration, conversion, modernization, or addition to a residential building or land must comply with the Home Improvement Contractors Law where the aggregate contract price for all labor and materials exceeds five hundred dollars ($500). Swimming pool contracts and home improvement contracts fall within the purview of the Home Improvement Contractors Law.

Legal Requirements of Home Improvement Contracts

The following are some of the essential elements of what should be included in a Home Improvement Contract: the name, address, and license number of the contractor; the name and registration number of any salesperson, who solicited or negotiated the contract; the approximate dates, when the work will begin and on which all construction is to be completed; a plan and scale drawing showing the shape, size, dimensions, and construction and equipment specifications for a swimming pool and for other home improvements; a description of the work to be done, a description of the materials to be used, and the equipment to be used or installed; and the agreed price for the work. The law also requires a contractor to give the Home Owner written notice of the right to cancel a contract within three (3) business days of signing, a disclosure form about the Home Improvement Contractor's liability insurance, and a checklist for home owners that specifies how to check out the Home Improvement Contractor and the required elements of a Home Improvement Contract. No extra or change order work may be required to be performed without prior written authorization of the person contracting for the construction of the home improvement or swimming pool. No change order is enforceable against the person contracting for home improvement work or swimming pool construction unless it clearly sets forth the scope of work encompassed by the change order and the price to be charged for the changes. Any change order forms for changes or extra work shall be incorporated in, and become a part of, the home improvement contract. However, failure to comply with these requirements does not preclude the contractor's recovery of compensation for work performed based upon quasi-contract, quantum meruit, restitution, or other similar legal or equitable remedies designed to prevent unjust enrichment.

Enforcing Home Improvement Contracts

An unlicensed contractor may not recover for monies owed to the contractor if the contractor did not have a valid contractor's license at all times during performance. As a customer of an unlicensed contractor, you can sue to recover all monies paid to the contractor. The best way to resolve a disagreement with a licensed contractor is to communicate directly with the contractor, calmly explaining your point of view and requesting his consideration for your demands. If this approach is ineffective, then a well worded, constructive letter detailing your disagreement is the likely next step. Failing a resolution of the home owners concerns at this point, the home owner will be well advised to complete and submit a complaint form to the CSLB. Additionally, obtaining the name and address of the contractor's license bond surety from the CSLB website and writing a letter to the surety requesting payment up to ten thousand dollars ($10,000) from the contractor's license bond for the damages sustained by the home owner is also recommended. A home owner can obtain mandatory arbitration of a dispute with the contractor up to seven thousand five hundred dollars ($7,500). However, a claim between seven thousand five hundred dollars ($7,500) and fifty thousand dollars ($50,000) can be heard by the CSLB Arbitration Panel only if both the home owner and contractor agree in writing. The Small Claims Court will hear claims up to five thousand dollars ($5,000). Of course, consulting with an experienced construction law attorney may be of additional help to the home owner.

An Ounce of Prevention

Seeking the advice of an experienced construction law attorney prior to entering into a contract with a home improvement contractor may be very helpful in avoiding the common mistakes made by home owners inexperienced with construction and California Construction law. Requiring the contractor to have liability insurance and perhaps a payment and performance bond is advisable. For example, home owners may find legal title to their residence clouded by one or more mechanic's liens recorded by their contractor, subcontractors, and suppliers. On larger jobs, having an architect supervise construction may be useful as well. If you have any questions whatsoever, seek the advice of a knowledgeable construction law attorney.