Home Improvement Contract
Agreement made on the _________________ (date) , between _____________________
(name of homeowner) of _________________________________________________________
_________________________________________ (street address, city, county, state, zip code) ,
referred to herein as Homeowner , and ____________________________ (name of contractor) ,
a corporation organized and existing under the laws of the state of ___________________, with
its principal office located at ______________________________________________________
_________________________________________ (street address, city, county, state, zip code) ,
referred to herein as Contractor .
Whereas, Homeowner desires for Contractor to install (describe) ___________________
______________________________________________________________________________
____________________________________ in his home located at the address listed above; and
Whereas, Contractor is willing to install (describe) ______________________________
__________________________________________________________________ in said home;
Now, therefore, for and in consideration of the mutual covenants contained in this
agreement, and other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:
I. CONTRACTOR INFORMATION
A. The name, business address, and license number of the Contractor is as follows:
[Name of Business and/or whoever holds license), address of business, and license no.]
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
B. (If applicable, include the name and registration number of the salesperson the
solicited or negotiated the contract) . _________________________________________
II. DESCRIPTION OF TYPE OF CONTRACT
This contract is a Home Improvement as defined by the California Business and
Professional Code.
Homeowner is entitled to a completely filled in copy of this contract, signed by both Homeowner
and Contractor before any work may be started.
III. Description of Project and Significant Materials and Equipment to be Used
(Note: This should be followed by a description of the project along with what materials
will be used and what equipment will be installed. Swimming pools go further, requiring a plan
and scale drawing showing the shape, size, dimensions, construction and equipment
specifications. The more details that are included, the less chance there is for
misunderstandings).
(Example: Contractor will furnish all labor, materials, equipment, supervision, and
contract administration to complete in a good and workmanlike manner the following:
Alterations to home of Owner, located at ______________________________________
_____________________________________________________________________ (address)
(the Project ), as described more fully in the drawings prepared by (name of design professional,
if any). By this reference, these drawings are incorporated in and made a part of this Contract.
Contractor’s scope of work under this Contract does not include any of the following items:
____________________________________________________________________________).
IV. DESCRIPTION OF WORK TO BE DONE
(Note: t he best way to avoid disputes over what is or isn’t expected from a home
improvement job is to write out the details in a contract. Make sure the contract includes
everything that is agreed to, up to and including complete cleanup and removal of debris and
materials, and special requests, like saving lumber for firewood or saving certain materials or
appliances. Also, note any work that will be done by the homeowner).
V. THE PRICE
(Note: Use the heading: Contract Price followed by the amount of the contract in dollars
and cents. If a finance charge will be charged, then you need a paragraph or subparagraph
using the words FINANCE CHARGE followed by the amount in dollars and cents. The finance
charge must be separate from the contract amount. The contract amount must include the entire
cost of the contract, including profit, labor, and materials, but excluding finance charges).
(Example: Owner shall pay Contractor the fixed sum of $______________ (the
Contract Price ) for the work to be performed under this Contract, subject to additions and
deductions pursuant to change orders agreed upon in writing by the parties, and subject to
allowances as provided in this Paragraph 3).
(Note: The Contract Price can include specific dollar amounts that are set aside for
certain materials, finishes, fixtures, and other items that have not been selected or decided upon
by the Owner. These allowances from the Contractor include all overhead and profit, plus
all applicable sales taxes. If the final cost of any item covered by the allowance is more or
less than the dollar amount listed, the Contract Price will be increased or decreased by a
written change order from the Contractor).
VI. DOWN PAYMENT
(Note: If a down payment is charged, the details of the down payment shall be stated in
the following form:)
A. The heading: Down Payment.
B. A space where the actual down payment appears.
C. The following statement in at least 12-point boldface type:
THE DOWN PAYMENT MAY NOT EXCEED $1,000 OR 10 PERCENT OF THE
CONTRACT PRICE, WHICHEVER IS LESS.
VII. SCHEDULE OF PROGRESS PAYMENTS
If any payments (other than the down payment) are required before the project is completed, the
details must be spelled out in the following format:
A. A schedule of progress payments shall be preceded by the heading: SCHEDULE
OF PROGRESS PAYMENTS.
(Remember: Except for the original down payment (Line #2 above), it is against the law for you
to get paid before you do the work, or for materials before they have been delivered. This
worksheet is to help you determine the progress payment schedule you will use in your Home
Improvement Contract. The information should be transferred to the actual contract.
Note: This worksheet should NOT be included with the contract).
1. Total Contract Price $_______________
2. Down Payment (10 percent or $1,000, whichever is less) – $_______________
3. Amount Remaining to be Billed to Customer = $_______________
(Subtract Line #2 from Line #1 above)
(In the left column below list the work or services that you will perform for a particular
phase of the project. In the right column show the amount of money the customer should
pay you when that portion of the project is complete).
Work or Service Performed Amount. Due on Completion
4. $__________________________
5. + $__________________________
6. +$__________________________
7. + $__________________________
8. + $__________________________
9. + $__________________________
10. + $__________________________
11. Amount of Progress Payments = $ ___________________
(This should equal the figure in Line #3 above)
B. (Note: Each progress payment shall be stated in dollars and cents and
specifically
reference the amount of work or services to be performed and any materials and
equipment to be supplied.)
C. (Note: The section of the contract reserved for the progress payments shall
include the following statement in at least 12-point boldface type )
D. The schedule of progress payments must specifically describe each phase of
work, including the type and amount of work or services scheduled to be supplied in
each phase, along with the amount of each proposed progress payment. IT IS
AGAINST THE LAW FOR A CONTRACTOR TO COLLECT PAYMENT FOR
WORK NOT YET COMPLETED, OR FOR MATERIALS NOT YET
DELIVERED. HOWEVER, A CONTRACTOR MAY REQUIRE A DOWN
PAYMENT." (12-point bold type)
VIII. The Work Time Frame
(The contract should describe the work schedule in the following form ):
A statement that describes what the “start of work” consists of, a heading
APPROXIMATE START DATE" and the approximate date when the work
will start.
Under the heading: "APPROXIMATE COMPLETION DATE”, put in
approximate date of completion.
Example:
START AND COMPLETION OF WORK
The work to be performed under this Contract shall be commenced on approximately
___________________________ (date) , as long as any required building permits are
received and any agreed upon funds are paid to Contractor. The Project shall be
completed by approximately _______________________ (date) , subject to permissible
delays as defined in this contract.
IX. CONSUMER NOTICES (list of documents to be incorporated) INTO THE
CONTRACT
Use this statement followed by the list of papers if additional documents need to be added into
the contract.
Example: Note about Extra Work and Change Orders
Extra Work and Change Orders become part of the contract once the order is
prepared in writing and signed by the parties prior to the commencement of any work
covered by the new change order. The order must describe the scope of the extra work or
change, the cost to be added or subtracted from the contract, and the effect the order will
have on the schedule of progress payments.
X. ADDITIONAL CONSUMER NOTICES
All of the following notices must be provided to consumers in the contract or, in some
cases they can be added as an attachment if the law allows .
Commercial General Liability Insurance
Workers’ Compensation Insurance
Performance of Extra or Change-order Work Notice
Mechanics’ Lien Warning
Contractors Board Notice
XII. CANCELLATION NOTICE (See Three Day Right to Cancel Below)
WITNESS our signatures as of the day and date first above stated.
______________________________
(Name of Contractor)
_____________________________ By: ____________________________
(P rinted name) _____________________________
(P rinted name & Office in Corporation)
_____________________________ _____________________________
(Signature of Home Owner) (Signature of Officer)
COMMERCIAL GENERAL LIABILITY INSURANCE
This notice may be provided as an attachment to the contract if the contract includes the
following statement: “A notice concerning commercial general liability insurance is attached to
this contract.”
The notice shall include the heading: “COMMERCIAL GENERAL LIABILITY INSURANCE
(CGL)” followed by whichever of the following statements is correct:
A. “(The name on the license or ‘This contractor’) does not carry commercial general
liability insurance.”
B. “(The name on the license or ‘This contractor’) carries commercial general
liability insurance written by (the insurance company). You may call the (insurance
company) at (phone number) to check the contractor’s insurance coverage.”
C. “(The name on the license or ‘This contractor’) is self-insured.”
WORKERS’ COMPENSATION INSURANCE.
This notice may be provided as an attachment to the contract if the contract includes the
statement: “A NOTICE CONCERNING WORKERS’ COMPENSATION INSURANCE IS
ATTACHED TO THIS CONTRACT.”
The notice shall include the heading: “WORKERS’ COMPENSATION INSURANCE” followed
by whichever of the following statements is correct:
A. “(The name on the license or ‘This contractor’) has no employees and is exempt
from workers’ compensation requirements.”
B. “(The name on the license or ‘This contractor’) carries workers’ compensation
insurance for all employees.”
PERFORMANCE OF EXTRA OR CHANGE-ORDER WORK NOTICE
A. A statement telling the buyer that a contractor is not required to perform
additional work or changes without written approval in a “Change Order” before any of
the new work is started.
B. A statement informing the buyer that extra work or a change order is not
enforceable against a buyer unless the change order also identifies all of the following in
writing prior to the commencement of any work covered by the new change order:
(i) The scope of work encompassed by the order.
(ii) The amount to be added or subtracted from the contract.
(iii) The effect the order will make in the progress payments or the completion
date.
C. A statement informing the buyer that the contractor’s failure to comply with the
requirements of this paragraph does not preclude the recovery of compensation for work
performed based upon legal or equitable remedies designed to prevent unjust enrichment.
MECHANICS’ LIEN WARNING
All contracts must contain the following statement and heading:
“MECHANICS LIEN WARNING:”
“Anyone who helps improve your property, but who is not paid, may record what is called a
mechanics’ lien on your property. A mechanics’ lien is a claim, like a mortgage or home equity
loan, made against your property and recorded with the county recorder.
Even if you pay your contractor in full, unpaid subcontractors, suppliers, and laborers who
helped to improve your property may record mechanics’ liens and sue you in court to foreclose
the lien. If a court finds the lien is valid, you could be forced to pay twice or have a court officer
sell your home to pay the lien. Liens can also affect your credit.
To preserve their right to record a lien, each subcontractor and material supplier must provide
you with a document called a ‘20-day Preliminary Notice.’ This notice is not a lien. The purpose
of the notice is to let you know that the person who sends you the notice has the right to record a
lien on your property if he or she is not paid.
BE CAREFUL. The Preliminary Notice can be sent up to 20 days after the subcontractor starts
work or the supplier provides material. This can be a big problem if you pay your contractor
before you have received the Preliminary Notices. You will not get Preliminary Notices from
your prime contractor or from laborers who work on your project. The law assumes that you
already know they are improving your property.
PROTECT YOURSELF FROM LIENS. You can protect yourself from liens by getting a list
from your contractor of all the subcontractors and material suppliers that work on your project.
Find out from your contractor when these subcontractors started work and when these suppliers
delivered goods or materials. Then wait 20 days, paying attention to the Preliminary Notices you
receive.
PAY WITH JOINT CHECKS. One way to protect yourself is to pay with a joint check. When
your contractor tells you it is time to pay for the work of a subcontractor or supplier who has
provided you with a Preliminary Notice, write a joint check payable to both the contractor and
the subcontractor or material supplier.
For other ways to prevent liens, visit CSLB’s website at www.cslb.ca.gov or call CSLB at 1-800-
321-CSLB (2752).
Remember, if you do nothing, you risk having a lien placed on your home. This can mean that
you may have to pay twice, or face the forced sale of your home to pay what you owe.”
CONTRACTORS BOARD NOTICE
The following notice shall be included in at least 12-point typeface under the heading:
“INFORMATION ABOUT THE CONTRACTORS STATE LICENSE BOARD (CSLB)”
“CSLB is the state consumer protection agency that licenses and regulates construction
contractors. Contact CSLB for information about the licensed contractor you are considering,
including information about disclosable complaints, disciplinary actions and civil judgments that
are reported to CSLB. Use only licensed contractors. If you file a complaint against a licensed
contractor within the legal deadline (usually four years), CSLB has authority to investigate the
complaint. If you use an unlicensed contractor, CSLB may not be able to help you resolve your
complaint. Your only remedy may be in civil court, and you may be liable for damages arising
out of any injuries to the unlicensed contractor or the unlicensed contractor’s employees.
For more information:
VISIT CSLB’s website at www.cslb.ca.gov
CALL CSLB at 1-800-321-CSLB (2752)
WRITE CSLB at P.O. Box 26000, Sacramento, CA 95826”
THREE DAY RIGHT TO CANCEL
A “Three- Day Right to Cancel” notice must be provided to the buyer unless the contract is:
negotiated at the contractor’s place of business. Subject to the Seven - Day Right to Cancel or
subject to licensure under the Alarm Company Act, or is a Service and Repair Contract. This
notice should be in 12-point boldface type. There should be a place near the notice for the
consumer’s signature. It should be written in the same language ( e.g., Spanish or English) that
was used in any oral sales presentation.
THREE DAY RIGHT TO CANCEL
“You the buyer have the right to cancel this contract within three business days. You may cancel
by emailing, mailing, faxing, or delivering a written notice to the contractor at the contractor’s
place of business by midnight of the third business day after you received a signed and dated
copy of the contract that includes this notice. Include your name, your address, and the date you
received the signed copy of the contract and this notice.
“If you cancel, the contractor must return to you anything you paid within 10 days of receiving
the notice of cancellation. For your part, you must make available to the contractor at your
residence, in substantially as good condition as you received it, any goods delivered to you under
this contract or sale. Or, you may, if you wish, comply with the contractor’s instructions on how
to return the goods at the contractor’s expense and risk. If you do make the goods available to the
contractor and the contractor does not pick them up within 20 days of the date of your notice of
cancellation, you may keep them without any further obligation. If you fail to make the goods
available to the contractor, or if you agree to return the goods to the contractor and fail to do so,
then you remain liable for performance of all obligations under the contract.
This notice may be attached to the contract if the contract includes, in at least 12-point boldface
type, a check box with the following statement:
[ ] “The law requires that the contractor give you a notice explaining your right to cancel.
Initial the check box if the contractor has given you a ‘Notice of the Three Day Right to
Cancel.’”
The notice shall be accompanied by a completed form in duplicate, captioned “Notice of
Cancellation,” which shall also be attached to the agreement or offer to purchase and be easily
detachable, and which shall contain the following statement written in the same language, e.g.,
Spanish or English, as use in the contract on the next page.
NOTICE OF RIGHT TO CANCEL
Notice of Cancellation
________________________
(Enter date of transaction)
You may cancel this transaction, without any penalty or obligation, within seven business days
from the above date.
If you cancel, any property traded in, any payments made by you under the contract or sale, and
any negotiable instrument executed by you will be returned within 10 days following receipt by
the seller of your cancellation notice, and any security interest arising out of the transaction will
be canceled.
If you cancel, you must make available to the seller at your residence, in substantially as good
condition as when received, any goods delivered to you under this contract or sale, or you may, if
you wish, comply with the instructions of the seller regarding the return shipment of the goods at
the seller’s expense and risk.
If you do make the goods available to the seller and the seller does not pick them up within 20
days of the date of your notice of cancellation, you may retain or dispose of the goods without
any further obligation. If you fail to make the goods available to the seller, or if you agree to
return the goods to the seller and fail to do so, then you remain liable for performance of all
obligations under the contract.
To cancel this transaction, mail or deliver a signed and dated copy of this cancellation notice, or
any other written notice, or send a telegram to:
______________________________
(Name of seller)
At ______________ _______________________________
(Address of seller’s place of business) not later than
midnight of ________________________ (Date)
I hereby cancel this transaction.
__________________________
(Date)
_____________________________
(Buyer’s signature)
“SEVEN-DAY RIGHT TO CANCEL”
This notice is to be provided to the buyer for any contract that is written for the repair
or restoration of residential premises damaged by any sudden or catastrophic event
for which a state of emergency has been declared by the President of the United States
or the Governor, or for which a local emergency has been declared by the executive
officer or governing body of any city, county, or city and county:
“SEVEN-DAY RIGHT TO CANCEL
You, the buyer, have the right to cancel this contract within seven business days. You may
cancel by e-mailing, mailing, faxing, or delivering a written notice to the contractor at the
contractor’s place of business by midnight of the seventh business day after you received a
signed and dated copy of the contract that includes this notice. Include your name, your address,
and the date you received the signed copy of the contract and this notice.
If you cancel, the contractor must return to you anything you paid within 10 days of receiving the
notice of cancellation. For your part, you must make available to the contractor at your residence,
in substantially as good condition as you received it, any goods delivered to you under this
contract or sale. Or, you may, if you wish, comply with the contractor’s instructions on how to
return the goods at the contractor’s expense and risk. If you do make the goods available to the
contractor and the contractor does not pick them up within 20 days of the date of your notice of
cancellation, you may keep them without any further obligation. If you fail to make the goods
available to the contractor, or if you agree to return the goods to the contractor and fail to do so,
then you remain liable for performance of all obligations under the contract.”
The “Seven-Day Right to Cancel” notice must have text that is at least 12-point boldface type, in
immediate area next to consumer’s signature, is in the same language that was used in sales
presentation. The notice may be attached to the contract if the contract includes, in at least 12-
point boldface type, a check box with the following statement:
[ ] “The law requires that the contractor give you a notice explaining your right to cancel.
Initial the check box if the contractor has given you a ‘Notice of the Seven-Day Right to
Cancel.’”
The notice shall be accompanied by a completed form in duplicate, captioned “Notice of
Cancellation,” which shall also be attached to the agreement or offer to purchase and be easily
detachable, and which shall contain the following statement written in the same language, e.g.,
Spanish, as used in the contract on the next page.
NOTICE OF RIGHT TO CANCEL
Notice of Cancellation
_________________________
(Enter date of transaction)
You may cancel this transaction, without any penalty or obligation, within seven business days
from the above date.
If you cancel, any property traded in, any payments made by you under the contract or sale, and
any negotiable instrument executed by you will be returned within 10 days following receipt by
the seller of your cancellation notice, and any security interest arising out of the transaction will
be canceled.
If you cancel, you must make available to the seller at your residence, in substantially as good
condition as when received, any goods delivered to you under this contract or sale, or you may, if
you wish, comply with the instructions of the seller regarding the return shipment of the goods at
the seller’s expense and risk.
If you do make the goods available to the seller and the seller does not pick them up within 20
days of the date of your notice of cancellation, you may retain or dispose of the goods without
any further obligation. If you fail to make the goods available to the seller, or if you agree to
return the goods to the seller and fail to do so, then you remain liable for performance of all
obligations under the contract.
To cancel this transaction, mail or deliver a signed and dated copy of this cancellation notice, or
any other written notice, or send a telegram to:
______________________________
(Name of seller)
At ______________ _______________________________
(Address of seller’s place of business) not later than
midnight of ________________________ (Date)
I hereby cancel this transaction.
__________________________
(Date)
_____________________________
(Buyer’s signature)
(More information about notifications and contracts is available in section 7159 and 7159.5 of
the business and professions code).
NOTICE OF RIGHT TO CANCEL
Notice of Cancellation
___________________________
(Enter date of transaction)
You may cancel this transaction, without any penalty or obligation, within seven business days
from the above date.
If you cancel, any property traded in, any payments made by you under the
Contract or sale, and any negotiable instrument executed by you will be returned
Within 10 days following receipt by the seller of your cancellation notice, and any
Security interest arising out of the transaction will be canceled.
If you cancel, you must make available to the seller at your residence, in
Substantially as good condition as when received, any goods delivered to you
Under this contract or sale, or you may, if you wish, comply with the instructions
Of the seller regarding the return shipment of the goods at the seller’s expense
And risk.
If you do make the goods available to the seller and the seller does not pick
Them up within 20 days of the date of your notice of cancellation, you may retain
Or dispose of the goods without any further obligation. If you fail to make the
Goods available to the seller, or if you agree to return the goods to the seller
And fail to do so, and then you remain liable for performance of all obligations
under the contract.
To cancel this transaction, mail or deliver a signed and dated copy of this
Cancellation notice, or any other written notice, or send a telegram to:
_______________________________
(Name of seller)
At not later than midnight of
________________________________________________
(Address of seller’s place of business)
_______________________
(Date)
I hereby cancel this transaction.
_______________________________
(Buyer’s signature)
_______________________
(Date)
More information about notifications and contracts is available in section 7159 and 7159.5 of the
business and professions code.