Contracts & ExecutionQuestion 648 of 1632

Under Bus. & Prof. Code §7159, a residential home improvement contract for $500 or more must include, in close proximity to the signature line, a notice informing the owner of the right to:

a.Withhold the entire contract price until the building department finals the permit
b.Require the CSLB registrar to inspect the work before the final payment
c.Cancel the transaction within 24 hours for any reason, without penalty
d.Cancel the transaction before midnight of the third business day after signing

Explanation

B&P §7159(e) requires the home improvement contract to carry, in immediate proximity to the space for the buyer's signature, the 'Three-Day Right to Cancel' notice — captioned 'Five-Day Right to Cancel' if the buyer is a senior citizen, and seven business days for a contract to repair damage from a declared disaster — together with a detachable Notice of Cancellation in duplicate, in the language of the sales presentation. (c) shortens it to 24 hours, which is not a California period at all. (b) sends the owner to the wrong body: CSLB licenses and disciplines contractors, it does not inspect work or clear payments; the building department inspects. (a) inverts §7159.5(a)(5) — the contractor may not demand payment exceeding the value of work performed, but the owner gains no statutory right to hold the whole price until permit final. Worth knowing what else sits by the signatures: §7159(c)(6) requires a notice that the owner has the right to require the contractor to furnish a performance and payment bond.

Law Reference: Bus. & Prof. Code §7159(e); cf. §7159(c)(6), §7159.5(a)(5)

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