| State laws are making it really tough on | | | | Forget this notice and you're liable for up to three |
| contractors by requiring specific disclosures and | | | | times the actual damages plus attorney's fees. |
| statements in their home improvement and | | | | Arbitration clauses in Texas construction contracts |
| construction contracts. The days of handshake | | | | have to be in 10-point bold type, or they're void. |
| agreements are over. Failure to include | | | | New York requires a long list of specific |
| state-mandated disclosures or statements in a | | | | disclosures in contracts for home improvement, |
| construction contract can result in fines, or make | | | | home repair, and construction of custom homes |
| any construction contract null and void. | | | | contracts. Failure to comply brings a fine of $100 |
| Many contractors are unaware of these state | | | | to $2,500. |
| changes in the laws affecting contracts. | | | | New Jersey requires all home improvement |
| Contractors typically run small businesses and put | | | | contracts for more than $500 be in writing. Failure |
| their emphasis on building to state codes rather | | | | to comply can result in offering the property |
| than keeping track of legal changes required by | | | | owner a full refund, or awarding three times any |
| state contract law. Many contractors still do | | | | damages caused. |
| business on a handshake or use a simple | | | | Florida requires a 3-day right to cancel in your |
| "boilerplate" one-size-fits-all contract that | | | | contract or you're subject to a $1,000 fine. |
| most-likely omits specific state requirements. | | | | Omission of the construction industry recovery |
| Some of the toughest states on construction | | | | fund notice in a contract risks a $500 fine. |
| contract requirements are Pennsylvania, Texas, | | | | California requires specific disclosures in every |
| New York, New Jersey, Florida, and California. | | | | contract. Omit the ones required by sections |
| Pennsylvania requires a long list of disclosures to | | | | 7030, 7159 or 7164 of the Business and |
| appear in a construction contract - such as start | | | | Professions Code and you may be explaining to |
| and finish dates, names and addresses of subs, | | | | the State License Board why your license |
| insurance coverage and a phone number for | | | | shouldn't be pulled. If your contract doesn't have |
| Pennsylvania Bureau of Consumer Protection. | | | | the disclosures required by the Code of Federal |
| Omit these disclosures and your construction | | | | Regulations section 460, you may be subject to a |
| contract is unenforceable in Pennsylvania. Some | | | | $11,000 fine! At best, you have no right to collect. |
| clauses that are commonly found in home | | | | How can contractors protect themselves? Large |
| improvement contracts can actually render the | | | | construction companies hire lawyers to write their |
| contract unenforceable. Failure to comply with the | | | | contracts. Smaller home improvement contractors |
| state requirements is a misdemeanor if the | | | | have to figure out for themselves what they |
| contract is for a small job under $2,000. But if the | | | | have to include in their contracts to make sure |
| job is a larger job - for over $2,000, a violation is | | | | that they're in compliance. A contract that doesn't |
| a felony. | | | | have all the disclosures required and that doesn't |
| Texas requires that contractors deliver a 2-page | | | | meet all your state's requirements is like not |
| disclosure statement before the construction | | | | having a contract at all. Not only are you at the |
| contract is signed. Texas Property Code requires | | | | mercy of your customer's goodwill, but you could |
| a notice in contracts for building or remodeling a | | | | be in trouble with the law. |
| residential property that qualifies as a homestead. | | | | |