Contracts & ExecutionQuestion 544 of 1632

A homeowner contracts with a Class B contractor to build a new single-family dwelling the owner will keep for at least one year. Under B&P §7164, the written contract MUST contain:

a.A downpayment capped at $1,000 or 10 percent of the price, whichever is less
b.A three-business-day Notice of the Right to Cancel signed by the owner
c.The Mechanics Lien Warning and the approximate start and finish dates
d.A schedule of payments stating the amount of each payment in dollars and cents

Explanation

B&P §7164(b) lists what a contract to build a single-family dwelling must contain: the contractor's name, address and license number; the approximate dates work will begin and be substantially completed; a legal description of the site; the statutory Mechanics Lien Warning; and a commercial general liability insurance statement with a check box. The downpayment cap of $1,000 or 10 percent belongs to §7159.5(a)(3), the payment schedule in dollars and cents to §7159.5(a)(4), and the three-business-day cancellation notice to §7159(e) and Civil Code §1689.7 for home-solicited contracts. All three are real California rules; none of them is what §7164 requires.

Law Reference: B&P §7164(b); cf. §7159.5(a)(3)-(4), §7159(e)

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