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Released: May 02, 2005
Help Desk FAQ
Contractors [California law]
When I hire a contractor in California, is a written contract required?
Yes. California law requires that any time you agree to work that will cost more than $500, there must be a written contract between you and the contractor. In order to avoid confusion, your contract should be very specific in terms of price and work description. Every contract should contain the contractor's name, address, and license number. It should have a work schedule section, which might include: approximate start and completion dates, notice of consequence if the contractor doesn't start work within 20 days of the contract's starting date, and a statement about what constitutes commencement of work.
A payment schedule should be included in the contract, spelling out when payments will be made and the amount of each payment. Under California law, a contractor can require a down payment of $1,000 or 10% of the total cost, excluding finance charges, whichever is less. For swimming pool construction, the down payment should not exceed $200 or 2% of the total cost, excluding finance charges, whichever is less.
With any written home improvement contract, the contractor must provide you with a notice of liens. A lien is a legal notice filed with the county that places a hold on your property and prevents you from selling your house without paying the contractor. Anyone who provides labor, contractors and subcontractors, supplies, or material for the project has the legal right to place a lien on the house and to sue for a forced sale of the property in order to obtain payment.
Lastly, all written contracts should include a "notice of cancellation" form, which gives you the right to cancel until midnight of the third business day after you sign the contract, Sundays and holidays excluded. However, if you sign the contract in the contractor's place of business, there is no "cooling-off" period. In an emergency, when a contractor must start work immediately, the contractor may require that you sign a waiver giving up your right to cancel.
If you have problems with a contractor, contact CSLB.
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