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Home Improvement Contract


Q.: I am the owner of property in Arroyo Grande. My neighbors have an easement on the roadway (which I own) for ingress and egress to their properties. The neighbors, however, have garden improvements that extend partially onto the easement. May I remove such garden improvements?

A.: A “home improvement contract” is a contact between an owner (or a tenant) and either a general or specialty contractor that provides for the remodeling, alteration, repair, or improvement of a personal residence, if the aggregate contract price, including all labor, services, and materials to be furnished by the contractor exceeds five hundred dollars ($500).  (Business & Professions Code sections 7151.2 and 7159).  A “home improvement” includes the repairing, remodeling, altering, converting or modernization of, or adding to, residential property, including driveways, swimming pools, terraces, patios, landscaping, fences, porches, garages, fallout shelters, basements, and other improvements, adjacent to a dwelling house.
     A copy of the home improvement contract executed by both parties must be delivered to the owner before work begins.   The contract must be in writing, signed by the parties, and must contain or reflect, among other things, the following:
     1.  The name, address, and license number of the contractor (and the name and registration number of any salesperson who solicited and negotiated the contract).
     2.  The approximate dates when the work will commence and be substantially completed.
     3.  A description of the work and materials to be furnished and the agreed consideration.
     4.   A schedule of payments with reference to the work or materials to be furnished.  Thus, the payment schedule relates to the cost of the work and labor to be performed as it is furnished.
     5.  The down payment prior to commencement of the work cannot exceed $1,000 or 10% of the contract price (excluding finance charges), whichever is less.
     6.  The contractor cannot receive more than 100% of the costs of the work or materials furnished at any point in time except for the authorized down payment (excluding finance charges).  If the contractor delays commencement for more than 20 days after the date set forth in the contract, the installment dates are postponed for the same period of time as the period of delay.
     7.  The requirements of the above paragraphs 4, 5, and 6 do not apply if the contractor provides a bond or an approved joint control, or if the contract price is not to be paid until satisfactory completion of the project.  The contract must contain a notice near the owner’s signature in 10-point boldface type that the owner has a right to require a bond or funding control of the construction loan funds.
     8.  If the salesperson’s commission is to be paid by the owner, it must be paid on a pro rate basis as the schedule of installment payments are made.
     9.  A definition of substantial commencement of the work.

     10.  A notice that a failure of the contractor to substantially commence the work within 20 days of the date specified in the contract without lawful excuse is a violation of the contractor’s license law.  (Business & Professions Code section 7018.5 and 7159).

© Copyright 2009 Michael J. Boyajian

Michael J. Boyajian, Esq. is the owner of Five Cities Law Center in Grover Beach. He has 18 years of experience in real estate and construction law. Your e-mailed questions are welcomed at boyajianlaw@sbcglobal.net.

 

Contact Information

Law Offices of Michael J. Boyajian
Grand Avenue Professional Building
1178 E. Grand Avenue
Arroyo Grande, CA 93420-2556

Phone: (805) 489-1031
Fax: (805) 489-1093

boyajianlaw@sbcglobal.net