ContractorsHome Improvement Business
Section § 7150
This section defines two specific terms for the purposes of this law. First, it explains that 'person' refers only to actual human beings, not companies or organizations. Second, it states that a 'senior citizen' is someone who is 65 years old or older.
Section § 7150.1
Section § 7151
This law defines what "home improvement" means in terms of changes you might make to residential property. It covers a wide range of activities like repairing, remodeling, or adding new features to a home, especially when rebuilding after a disaster. It also clarifies what counts as "home improvement goods or services," such as installing air conditioning or termite extermination. Additionally, it specifies what qualifies as a "solar energy system," focusing on solar setups that convert sunlight into electricity for home use.
Section § 7151.2
This section defines a 'home improvement contract' as any agreement, whether spoken or written, between a contractor and a homeowner or tenant, or between a salesperson and a homeowner or tenant, that involves work or services to improve a home. This includes all labor, services, and materials for the improvement project, and it applies no matter how many units are in the building where the tenant lives.
Section § 7152
This law explains what a 'home improvement salesperson' is and describes their registration requirements. These salespeople work for licensed contractors to sell or arrange home improvement services, like building pools or installing hot tubs. They must register with a board and can work for multiple contractors, but must always disclose which contractor they're representing in each transaction. Certain individuals, like corporate officers, general partners, or those involved in service repairs or retail transactions, do not need to register as long as they meet specific criteria.
Section § 7153
This law makes it illegal for someone to work as a home improvement salesperson in California without a proper registration. If you're caught doing this without the correct paperwork, it's considered a minor crime called a misdemeanor, and you could be fined or get a citation. Also, if a contractor tries to secure a payment through a security interest, this is invalid if the salesperson who set up the contract wasn't registered or exempt at the time the homeowner signed it.
Section § 7153.1
If you want to be registered as a home improvement salesperson, you must apply in writing, using a form and fee set by the registrar. They can deny your registration for specific reasons. You’ll also need to provide fingerprints for a background check, which can be submitted electronically if possible. The fingerprints help check your criminal history with state and federal agencies.
Section § 7153.2
If you're a home improvement salesperson in California, your registration lasts for two years. It expires two years after the last day of the month it was first issued or two years after the last renewal date.
Section § 7153.3
If you're a registered home improvement salesperson in California, you need to renew your registration before it expires using a specific form and paying a renewal fee. If you miss the deadline, you have up to three years to renew, but you'll pay a penalty. After three years, you must reapply as if you're registering for the first time. If your renewal application is incomplete, it can be rejected, and if not corrected within 90 days, it will be considered abandoned. But, you can ask for reconsideration if there's a good reason for the delay, as long as you do so within 90 days of the notice. These rules have been in effect since July 1, 2017.
Section § 7154
If you're a home improvement contractor in California, you need to officially inform the registrar in writing whenever you hire or let go of a registered home improvement salesperson. When you hire someone, you need to submit their name and registration number using a specific form before they start work. If someone stops working for you, you have 90 days to report that too. If you don't follow these rules, or if you hire someone who isn't registered, you could face disciplinary action.
Section § 7155
If a home improvement salesperson breaks any rules in this chapter, they can face disciplinary actions like having their registration suspended or revoked. The process for this discipline follows specific legal procedures outlined in a different part of government rules.
Section § 7155.5
If a home improvement salesperson breaks any rules in this chapter, the contractor who employed them can also be disciplined. This applies even if the contractor wasn't aware of the violation or didn't take part in it.
Section § 7156
This law makes it a misdemeanor and a reason for disciplinary action for home improvement salespeople to do certain things. They can't keep money that should go to their contractor, use a contract form that doesn't include the contractor's name, or help choose a contractor if they haven't informed the Board of their employment.
Section § 7156.6
Section § 7157
This law outlines rules for contractors when offering home improvement contracts. Contractors can't offer rewards to customers for bringing them business. However, they can give promotional items, as long as the item is under $5 and isn’t linked to getting a contract. Salespeople and agents can't take or give money or gifts in a home improvement deal outside of their employer's payments. Contractors also can't pay or reward others for home improvement work unless that person is licensed or exempt from licensing. Violating these rules is a misdemeanor and can lead to disciplinary action. The term 'owners' includes tenants too.
Section § 7158
Section § 7159
This law sets the rules for home improvement contracts that cost over $500. It's about what needs to be in the contract, like details of the work, pricing, and payment schedule. The contract must be clear and readable, and you must provide a copy to the buyer before starting any work. Homeowners have the right to a written 'Notice of Cancellation' and can back out of the contract within three days, or seven if there's an emergency. Contractors need to present notices about insurance and workers' compensation, and they must not collect money for work or materials not yet delivered. If contractors mess up any part of these rules, they might face penalties.
Section § 7159.1
This law requires that when you sign a contract for home improvement services sold door-to-door and the contract might use your home as collateral, there has to be a clear warning notice in large, bold print. This notice warns that you could lose your home without a court process if you miss any payments. This warning must be in the same language as the contract, on a separate paper, signed, and a copy given to you by the salesperson. If the contract doesn't follow these rules, it's not legally enforceable. However, this requirement doesn't apply to certain contracts covered by specific sections of the Civil Code or mechanics liens.
Section § 7159.10
This law defines what a 'service and repair contract' is in the context of home improvement work performed by licensed contractors. To qualify, such contracts must be for no more than $750, initiated by the homeowner, and include only necessary services. Contractors can only be paid after completing the work, which includes passing any required inspections. The contract must be in writing, signed, and understood by the homeowner, with specific notices about rights and insurance. Homeowners can cancel contracts under specific conditions, such as if they didn't initiate contact or if unnecessary services were added. The law also outlines the required format and disclosures for these contracts, including how to cancel them and procedures if you're a senior citizen or affected by a declared emergency.
Section § 7159.11
If a licensed contractor or someone who should be licensed breaks any rules in Section 7159.10, they can be disciplined. This also applies to their agents or salespeople.
Section § 7159.14
This law sets rules for service and repair contracts that cost up to $750. It requires contracts to be in writing and include all costs except finance charges. If a contract uses a time and materials basis, the final amount can't exceed the estimate without written consent from the buyer. Buyers must initiate contact for the repair, and contractors shouldn't upsell unnecessary items. Payment is due only after job completion, and only one service charge is allowed, which must be disclosed in ads. Contractors must offer replaced parts to customers and provide lien waivers upon payment. Violating some of these rules can lead to fines or jail. For fraud related to natural disasters, courts can order repayment based on one's ability to pay and impose fines. The statute is enforceable from July 2021.
Section § 7159.2
This law deals with how payments are handled for home improvement contracts. If the contract is $5,000 or less, it cannot secure interest in real property, except for mechanic's liens or legal liens. For contracts over $5,000 funded by a mortgage loan, payments to the contractor must be done either by a check made out to both borrower and contractor, or through a third-party escrow agent if the borrower agrees. Violating this law can lead to paying actual damages or even triple the contract price if done intentionally. Seniors or disabled individuals can get up to an extra $5,000 in damages. Winning plaintiffs get court costs and attorney's fees, and defendants might, too, if the case was brought in bad faith.
Section § 7159.5
This law outlines rules for home improvement contracts involving licensed contractors in California. Contracts must be in writing and detail costs, including labor and materials, excluding finance charges. Any downpayment cannot exceed $1,000 or 10% of the contract, whichever is less. Payments must correspond to work completed, and contractors cannot demand payments exceeding the value of completed work. If requested, contractors must provide a release from any potential lien claims before receiving further payment. Special rules apply if a bond is provided, offering exemptions to certain payment restrictions. Violations can lead to fines or jail time, especially in areas affected by natural disasters, and must be legally addressed within specific time frames. Additionally, deliberate schemes to defraud in disaster situations must be compensated by the offender, who may also face fines and imprisonment.
Section § 7159.6
This law states that if there's extra work or changes to a construction contract, these changes are not valid unless they clearly describe the work, state the price difference, and detail how it affects payment schedules or deadlines. Contractors can't be forced to do additional work without written approval. If these rules aren't followed, a contractor can still get paid through other legal means to prevent unfair situations. These rules began on January 1, 2006.
Section § 7159.9
This section explains that certain rules don't apply when selling and installing fire alarm systems if specific conditions are met. The contractor must follow rules in other sections, ensure the fire alarm services cost less than $500, and certify this amount. The contract must include the residence address and the contractor's details. Copies of these documents must be given to the client and kept for five years. If the contracting board asks for these documents, the contractor must provide them within 30 days, or risk disciplinary action.
Section § 7160
If someone is tricked into signing a contract for an improvement project, like a home renovation, because of lies or false promises knowingly made by a contractor or salesperson, they can sue to get $500, plus their lawyer's fees, and any other damages they suffered because of these lies.
Section § 7161
This law makes it a misdemeanor for someone to engage in certain deceptive practices when it comes to home improvement contracts. It includes actions like using misleading ads, making false promises to get contracts, altering contract documents, or inflating financial obligations. Publishing false advertising about home improvements is also illegal. If these deceptive actions are part of a scheme to defraud property owners, especially after a natural disaster, the person responsible can be ordered to pay back the victim, taking into account their financial ability. The law also allows for fines up to $25,000. This is particularly relevant when a state of emergency is declared.
Section § 7162
This law states that if someone licensed to do home improvements in California makes claims about specific brands, qualities, or sizes of items like appliances or fixtures, these details must be clearly described in the written contract. If they fail to install the specified items, they can face disciplinary actions.
Section § 7163
This law says that a home improvement contract can't be enforced if getting a loan is part of the deal, unless a few conditions are met. These include the loan being approved by a third party, the buyer agreeing to the loan, and the buyer not canceling the loan as per the federal Truth in Lending Act. The contractor can’t start work or make claims about the contract being valid until these steps are completed. If the contract isn’t valid, the contractor must return all money or property to the buyer. Although homeowners are generally not obligated to return services or items received, they must return items if it's practical and the contractor meets certain conditions. Lastly, any waiver of these rules is void unless it's an emergency repair scenario.
Section § 7164
If you're hiring a contractor to build a single-family home that you'll live in for at least a year, the contract has to be in writing and signed by both you and the contractor. This written contract must include key details: the contractor's information, when the work will start and end, and a legal description of the property. It should also include a warning about mechanics liens, which can happen if someone who worked on your home isn't paid. This lien can be a serious issue, potentially leading to you paying twice or losing your home. Therefore, the law encourages homeowners to check the contractor's general liability insurance. The contract should also inform you that you might need to pay for a performance bond, which is extra financial security for the work. All of this became mandatory in 2006.
Section § 7165
This section outlines alternative requirements for a swimming pool construction contract when it is financed by a third-party lender. If certain conditions are met, these requirements can replace parts of another section of the law. Key conditions include the lender agreeing in writing to finance the estimated construction cost and providing the loan terms as required by federal law. Additionally, the borrower must confirm in writing after three business days that construction can begin before the loan's cancellation period ends. The borrower must sign a separate document acknowledging these terms, and if they don't pay, the contractor may place a lien on the property. This law applies to all parties involved in the loan and construction of the swimming pool.
______ Date __________ Buyer(s)”
Section § 7166
This law says that certain rules (specifically, the ones in Article 10) don't apply when building swimming pools meant for places other than just a single-family home. Also, if a contractor is building both the house and the pool as part of one project, those rules don't apply to the pool either.
Section § 7167
This law states that if a contract primarily for building a swimming pool doesn't follow certain requirements, it is considered void, meaning the contractor can't enforce it. However, even if the contractor fails to meet one specific requirement, they might still be able to get paid for the actual work they did through other legal approaches to prevent unfair gain by the client.
Section § 7168
If you get into a legal dispute with a swimming pool contractor over a pool construction contract, the court will make the losing side pay for the winning side's reasonable attorney fees.
Section § 7169
This law requires that anyone selling, leasing, or financing a solar energy system in California must provide a detailed disclosure document to consumers. It must include information about the cost, expected savings, financing options, consumer rights, and complaint procedures. On top of that, optional information like financing details, calculations for panel needs and output, and any related fees or impacts on home sales should also be made available. Importantly, contracts and disclosures must be in the same language as any marketing or sales presentation used. For systems using certain financing, a specific form might satisfy part of these requirements. The term 'solar energy system' here refers to specific systems used on homes. Lastly, the law does not cover systems pre-installed in new buildings.
Section § 7170
This section requires the Contractors State License Board to handle complaints and questions about solar energy companies and contractors. Starting July 1, 2019, they must create a yearly report with details about these complaints, including the number and type of complaints, where they came from, and how they were resolved. This report must be accessible on their website and the Public Utilities Commission's site.