Continued
The contract must include an approximate starting date and
completion date. There should be a provision in the fine print
that explains what can affect the start date and completion
date.
The total cash price needs to be clearly listed along with the
requirement for a down payment and payment schedule. There needs
to be an explanation of how billings will be made and paid,
homeowner releases and contractor's recourse for
nonpayment.
Down Payment
State laws vary concerning the down payment. Generally, a down
payment is about 10%. California, for example, allows a down
payment of only $1000 or 10%, whichever is less, for any consumer
contract. The down payment can be adjusted to allow for estimated
start up costs which are the contractor's out-of-pocket
expenses necessary to start the project.
Along those lines, a contract should include a notice to buyer
that instructs them to carefully read the contract before signing
and the consequences if the contract is canceled after the notice
of cancellation has expired….the owner will be responsible
for all expenses incurred to date by the contractor including the
loss of reasonable profit.
The contract needs to advise the owner that they have a right to
require the contractor to provide a performance or payment bond.
It should note the address of the License Board and that
contractors must be licensed and this is where to go to make
complaints.
Right above the signature line, in 10-point Roman bold type you
must tell them they have three business days to cancel this
contract. You need to give them a separate formal copy of the
three-day Notice of Cancellation to mail back to you if they wish
to cancel.
Both contractor and owner need to sign and date. If a
contractor's sales representative signs, the sales
representative's state registration number must be
included.
The fine print includes the terms and conditions. It is not made
purposely to deceive but rather to include all the lengthy
verbiage necessary to be fair
