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§4.02 Contractor’s License Law—Contract Requirements

Lesson 4:
Home Repair & Licensing

Every contract and any changes in a contract between an owner and contractor for the construction of a single-family dwelling to be retained by the owner for a minimum of one year must be in writing, be signed by both parties, and contain the following terms [B&PC §7164 (as operative July 1, 2012)]:

  • The contractor’s license number, which must be included in all contracts, subcontracts, bids, and advertising. [B&PC §7030.5.] Contractors whose licenses have been suspended or revoked two or more times within an eight-year period must disclose this in any contract, bid, or estimate. [B&PC §7030.1.]
  • The approximate beginning and completion dates.
  • A description of the location where the work is to be done.
  • A specified notice explaining that if the contractor is not paid, the contractor may record a mechanic’s lien on the owner’s property.
  • A notice regarding commercial general liability insurance.
  • Any other matters agreed to by the parties to the contract and a clear description of any incorporated document.
  • Contracts for the sale of home improvement goods or services that are offered door-to-door and contain or are secured by liens on real property must contain a warning as specified in B&PC §7159.1 (as operative July 1, 2012).
  • Contractors must file a contractor’s bond for $12,500, regardless of the contractor’s classification. [B&PC §7071.6(a); see B&PC §7071.9(a) (qualifying individual's bond).]
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