Contracts & ExecutionQuestion 712 of 1632

Which mandatory notice informs the homeowner that they may cancel the transaction within a stated period and how to do so?

a.The Preliminary Notice sent by a subcontractor or supplier
b.The Certificate of Occupancy issued by the building department
c.The Notice of Completion the owner records after the work
d.The 'Notice of the Three-Day Right to Cancel' form

Explanation

B&P §7159(e) requires the contract to carry, near the buyer's signature, a notice captioned 'Three-Day Right to Cancel' — 'Five-Day' for a senior citizen, seven business days for repairs after a declared disaster — stating the transaction date, the date by which a cancellation must be sent and where to send it, plus a detachable Notice of Cancellation form in duplicate, in the language of the sales presentation. (a) is a lien document: Civil Code §8200 makes preliminary notice a precondition to a lien, a stop payment notice or a payment bond claim, and it can arrive up to 20 days after the claimant starts work. (c) is the owner's recorded notice, which shortens a subcontractor's lien deadline from 90 days after completion to 30 days after recording (Civil Code §8414). (b) is the building department's sign-off that the structure may be occupied.

Law Reference: Bus. & Prof. Code §7159(e); Civil Code §8200, §8182

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