Explains contract requirements that protect consumers from disreputable home improvement suppliers
According to the American Bar Association, complaints about home repair consistently fall within the top 10 consumer grievances. To address these problems, most states have passed laws aimed at protecting unsuspecting homeowners. Unfortunately, few homeowners know of these laws.
Indiana’s Home Improvement Contracts Act applies broadly to all agreements between a consumer and a home improvement contractor for which the contract price exceeds $150. It used to be sufficient to have an oral agreement with contractors. Not anymore. Indiana requires much more formality in the name of protecting innocent consumers.
Under Indiana law, to avoid consumer deception, the contractor must provide the consumer with a written contract in a form that can be reasonably read and understood. Additionally, Section 10 of the Home Improvement Contract Act sets forth nine details that must be included in the contract.
Minimum Home Improvement Contract Requirements
The consumer’s name and the property address
The contract must clearly state the name of the consumer, or consumer’s representative, who will be responsible for paying for the work along with the address of the property to be improved. From a legal perspective, this requirement helps identify times when tenants may ask for repairs without the consent of landlords.
The contractor’s name, address, and contact for inquiries
The consumer must be able to call with questions or complaints. Often the customer relations representatives are different than the on-site workers. The name and address of the home improvement contractor and the name and telephone number of any agent to whom owner inquiries can be directed must be included in the contract.
The contract and expiration dates
The date the detailed contract was provided to the consumer and a time frame within which the consumer must accept the contract. Consumers must read the contract prior to accepting the contract. The law does not permit ‘hustling.’ If the contractor insists upon immediate acceptance, this is a sign that the contractor may be a problem.
A detailed description of work to be performed
This section will typically include descriptions of agreed-to products, including brand names and order numbers. When appropriate, plans, bids, estimates, and all other documents relating to the project would be listed in the description of the work. The best language for the consumer would be something like “all labor, materials, and services necessary to complete the project.” Be careful though, a contractor may try to keep the scope of work so narrow that anything becomes a chargeable extra.
If the specifications are not included in the description of the work, then the contract must include a statement that the specifications will be provided to the consumer before the work begins. Additionally, the consumer must approve and date the accepted specifications. The contract is subject to the consumer’s approval.
Approximate starting and completion dates
Under the law, the completion date is the date when the contract is substantially complete, not the date when the contractor leaves the site for the last time. At substantial completion, the consumer should be able to inspect the work and create a punch list of items to be adjusted.
Statement of contingencies affecting completion
The weather is a common contingency that delays completing home improvements. Contractors cannot be held responsible for acts of God (i.e., tornadoes, wildfires, earthquakes). Nor are contractors expected to install metal roofing in thunderstorms. On the other hand, legitimate contingencies do exist and might include delayed delivery of materials or unseasonable weather.
The contract price
The contractor should present the total price as a lump sum.
The contract must contain the signature of the contractor and/or its agents. Signature lines for each consumer who is to be a party to the contract are also required; separate lines must be given to husbands and wives. Under, or directly after, each signature must be a legible version of the person’s name.