California law requires all installers, maintenance and repair handymen and contractors performing home improvement work valued at more than $500 to provide the homeowner with a contract that meets the requirements of California Business and Professions Code §7151-7159. Failure to provide clients with a written contract as required by the statute, can cost your license, CSLB penalties, criminal fines up to $5,000.00, and if unlicensed, pay three times the amount of damages found by the court.
THERE IS NO QUESTION: A POORLY WRITTEN, IMPROPERLY FORMATTED, OR OUT-OF-DATE HOME IMPROVEMENT CONTRACT PUTS A CONTRACTOR’S LIVELIHOOD AT RISK.
Still, some contractors fail to use a proper home improvement contract or update them.
Beyond complying with the law and avoiding criminal penalties or triple damages, there is one more very compelling reason to make sure you use an up-to-date, well written contract for each ADU, tile job, renovation or other home improvement job you do: Attorney Fees.
Under a well written home improvement contract, the contractor who is sued by the homeowner, or who wishes to sue their client, may win the cost of its attorney fees, if the contractor wins the lawsuit. A well written home improvement contract will include a “prevailing party” provision granting the party who wins a lawsuit or judgment, its attorney fees.
In May of this year, the California Court of Appeals (in an unpublished opinion) granted a contractor not only the value of its contract, but also $95,531.68 in attorney fees after the homeowner sued the contractor on a $4,000 job. Plyley v. Renovating Specialist, Inc., Case No. B309457 (2d Dist., Div. 6 May 31, 2022).
Furton Legal can review and update your home improvement contract. Contact us here to get started with a review. If you don’t have an updated home improvement contract, you can purchase one from The Document Lawyer, here.