A week rarely goes by that the California Contractors State License Board's (CSLB) sting operation isn't conducting a sweep, swooping down like a SWAT team (sans weapons) somewhere in the state to help stop unlicensed construction activity.
After winter storms ravaged parts of northern California, the CSLB issued a warning telling home owners how to avoid getting soaked again by hiring an unlicensed contractor out only to cash in on the losses of vulnerable home owners.
The CSLB also points to the latest Gallup Poll which, late last year, asked consumers to rate the trustworthiness and ethics of professionals. You guessed it, consumers all but panned building contractors.
Consumers ranked building contractors at No. 11 (down the list with real estate agents) -- with No. 1 being most trustworthy and No. 21 being the least trustworthy. Journalists, for the record, didn't rank much higher, coming in at No. 10.
If the board has it's way, those conditions are about the change.
Effective Jan. 1 2006, new forms and procedures were put in place to help consumers circumvent the gauntlet of crooked contractors and steer them to licensed professionals for both home improvement jobs and smaller service and repair work.
The new contracts not only detail the work to be done, but are also more informative because they notify consumers and contractors of consumers' rights and contractors' obligations.
Home owners will also find the new contracts more concise, more clearly written and easier to understand. Legislation passed into law specifically targeted contractors' illegible scribbling and contract's vague terminology and misleading provisions.
Hopefully, the new legal effort will help weed out the bad seeds who typically don't keep abreast of the latest regulations and required contracts.
"CSLB worked closely with Assemblyman Alan Nakanishi (R-Lodi) and industry representatives in developing these new contract guidelines," said CSLB Registrar Steve Sands.
"They will go a long way toward protecting consumers and contractors from disagreements and misunderstandings," he added.
Still, it remains up to consumers to know their rights, to learn and know what a home improvement or service contract should include, get trusted referrals and hire only licensed contractors with satisfied customers who'll provide testimonials about quality work.
Home Improvement Contracts
The new California home improvement contract:
- Must be completely legible. Home owners should feel free to ask for typewritten, computer generated or printed contracts. Leave the cursive writing for the signatures.
- Must include a list and description of all documents required to be incorporated into the document, as well as a description of the project and materials used and installed in the job. For swimming pools, the project description must also include a plan and scale drawing showing the shape, size, dimensions, and the construction and equipment specifications.
Consumers are advised to seek a similar drawing and details for any home improvement that alters a home's floor plan or its square footage or the configuration of a room or space.
- Must specify whether or not the contractor is exempt from workers compensation insurance requirements. Only contractors without employees are exempt.
- Must list finance charges separately from the cost of the job or contract total and those finance charges must be listed under a specific "Finance Charges" heading.
- Must use the term "Contract Amount" as a replacement term for the more vague "Agreed Consideration for the Work" phrase.
- Must specify that the "right to cancel" period begins when the buyer receives a copy of the written agreement. Most jobs come with a three-day right to cancel. A seven-day right to cancel comes only with jobs contracted to repair, restore or rebuild damage due to any officially declared (by the U.S. president, state governor or qualified local official) disaster following sudden or catastrophic events.
- Must include a statement that the contractor must provide a Lien Release notice to the consumer on request after payment is made in the contract.
Home owners can protect themselves from liens by getting a list from the contractor of all the subcontractors and material suppliers that will work on the project included in the contract and by keeping tabs on the work they perform and materials they deliver.
Also keep in mind the dynamics of the task at hand.
The home owner is the clipboard-wielding general contractor, site manager, field supervisor -- not the contractor. The contractor is the home owner's employee.
Be a boss who won't hesitate to say "You're fired!" if the contractor violates the contract.
The new rules also raise the down payment for swimming pool construction to $1,000 or 10 percent of the contract amount, whichever is less -- the same for any other home improvement contract.
In another change, what used to be a checklist is now a specific statement about general liability insurance called "Commercial General Liability Insurance (CGL)". The notice must state that, 1) the contractor does not carry liability insurance; or 2) that the contractor is insured by a specific company the consumer can call to verify the information; or that 3) the contractor is self-insured.
Service and Repair Contract
The new rules also allow contractors to use a "Service and Repair Contract," but only for projects that cost a total of $750 or less.
If the contract and or situation do not conform to all of the requirements, the contractor must use a standard home improvement contract for home improvement work.
In addition to the $750 limit, the requirements for a service and repair contract include the following:
- The consumer's right to cancel ends when work begins. There is no right to cancel period, but this allows the contractor to get to work immediately.
- The prospective buyer (i.e., a home owner) must initiate contact for the work to be performed. The contractor may not initiate the contact for the work.
- The contractor must not sell a consumer goods or services beyond what is reasonably necessary to address the specific problem for which the consumer contacted the contractor.
- No payment is due or can be accepted by the contractor, until the work is completed.
