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California Real Estate Law: Home Improvement Contract Protections

There are consumer protections for home improvement contracts under California real estate law

Get the Facts before Laying the Bricks

With a record hot summer looming and the 4th being held at your house this year you’re ready to renovate the old swimming pool. You’ve been a proud home owner for 10 years, but keeping up with the PITI payments has been tough enough. Remodelling the house or fixing up what you affectionately call the lagoon has been the furthest thing from your mind. Before signing-off on the blueprints for the wet bar and waterfall, it’s important to keep in mind that California real estate law provides some amount of protection for home owners that want to make “home improvements“. The smartest strategy is to get some basic knowledge about the contractor and construction process and enter into a valid written contract under California real estate law that will protect you in case something goes wrong. The most important California real estate law consumer protection provisions for residential remodelling contracts are set-out under CA Bus. & Prof. Code 7159. Before getting started on the project, there are some basic guidelines under California real estate law that will help to ensure a smooth process.

California Real Estate Law Home Improvement Guidelines

California real estate law protects consumers in construction contracts  No License, No Dice

You need to make sure the contractor is licensed before doing anything else. Any construction work exceeding $500 requires a license under California real estate law. Even if they’re licensed, check their background. Getting a referral is always a smart place to start. Ask for a business card and their license number too. You can check to see license status with the Contractors State Licensing Board (CSLB). Licensed contractors have a record of all valid complaints placed in their file. Take a look. Common sense rules the day here.

The CSLB is the entity to contact if you have a dispute or want to report an unlicensed contractor. There is a 4 year statute of limitations to file a complaint with the CLSB. The CLSB investigates consumer complaints and imposes its own remedies in addition to the other remedies and protections afforded to consumers under California real estate law. If the parties are unable to reach an informal resolution, the CLSB institutes other alternative dispute resolution procedures. First, a formal mediation is held. If that fails, the parties arbitrate the matter, which is mandatory for complaints against contractors involving damages up to $12,500. The CLSB can also launch an official investigation into the contractor and can submit the case to the board for disciplinary action and local district attorney for criminal prosecution. The latter is often pursued when the contractor is unlicensed.

Aside from the remedies available to the CSLB, if a dispute arises and you discover after the work was complete that the contractor was not licensed, you can:

(1) demand that any money paid to the contractor be returned; and

(2) defend a lawsuit filed by the contractor for payment.

Contract Needs to be in Writing with Specific Provisions

California real estate law provides that a written contract with certain specific provisions is required for all home improvement projects over $500. Swimming pool contracts must include a plan and scale drawing, which shows the shape, size dimensions and construction and equipment specifications. Can you stiff the contractor if the contract isn’t in writing? Not necessarily. A recent California court of appeals case, Hinerfeld-Ward, Inc v. Lipian, enforced an oral home improvement contract and awarded several hundred thousand dollars of damages, interest and attorney fees to the contractor. Getting a written contract under California real estate law protects both parties by detailing and setting out expectations upfront before the project begins.

Permit Requirements

If the work requires a permit, get a permit. The type of permit needed depends on the type of construction being performed. A pool remodel will require a combination permit, including building, plumbing, mechanical, and electrical. A new rule also requires an anti-entrapment cover to be constructed in all new swimming pools or improvements thereof. Ultimately, failing to acquire the necessary permits results in greater risk to the home owner. The permitting process may cost money and time, but at least you know the job has been properly completed and is up to building and safety codes. This not only creates a safer environment for you and your family during your stay, it minimizes issues when selling your home in the future.

About Sean Hanley

Practicing law since 2007, Sean specializes in the ever-changing laws related to real estate, business and estate planning. Embracing technology with a focus on personalized service, he understands the challenges of living and thriving in Silicon Valley. Tapping into his education in economics and business administration, Sean also serves on the non-profit Willow Glen Business Association.

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