Home Improvement Contracts

I am going to discuss specific details that every home owner should see when entering into a home improvement contract with a contractor. The contract you use when working with a contractor is the most important key of having a successful job. It should clearly outline what will be done, how will it be done, what materials will be used to do the work, and how much will it cost.

In order for the contract to protect the two parties involved, it must contain certain items and disclosures made by the contractor to the homeowner. There are several laws that govern how a contract is to be written and they are contained in the California Business and Professions Code as well as the California State Contractor’s License Board.

Before any contract can be entered into, the contractor must give the “Notice to Owner” disclosure form to the homeowner. This form clearly explains the contractor’s lien rights (as well as the rights of material suppliers and subcontractors), and offers four suggestions to the home owner as to measures that can be taken to ensure that the job gets finished and liens are not filed.

The second notice a contractor must provide to the homeowner is the fact that all contractors must be licensed, and if you contract with someone that does not have a license, the State License Board may not be able to assist you if there is a problem. It then asks that you check the contractor’s license number and gives the address for the CSLB to contact if they wish to file a complaint. Once the home wner receives these forms, a contractor can legally enter into a contract with them.

State law requires a contractor to use a contract if the total cost of the job exceeds $500.00 (including materials, services and labor). The contract must also contain the contractor’s name, address and license number. If he or she offers any specific warranties, they must be clearly stated in the contract, and there should also be language describing the type of dispute resolution the contractor wishes to employ.

In general, all home improvements contracts must include, the approximate date the job is to begin, the approximate date the job will be completed, a description of what work is to be done, a description of what constitutes a substantial completion of work, and a notice to the home owner that states if the contractor does not start work within 20 days of the date in the contract, he or she will be in violation of Business and Professions Code Section 7159.

The most common mistake most homeowners when entering into a home repair contract is not clearly defining what the scope of work is and how the work will be done.

For example, instead of describing the job as “refinish living room floor”, it should be stated as “ Sand down existing finish to bare wood, replace any stained or split pieces, putty and fill all nail holes and open joints and finish sand. Apply two coats of XYZ Satin Floor Finish, and stain new base to match.” It is best to give as much detail as possible so that your picture of the job is what the contractor actually does. Take the time to state the manufacturer of the product, and how the products are to be installed.

Part of the contract should also include plans and specifications as well as details on how debris will be removed, how the job will be kept clean, and any special requests like “furniture and floors to be kept covered at all times” or “home owner will install all finished light fixtures”.

Once the description the work is established, the price can be agreed upon and a schedule of payments can be written into the contract. At no time should the payment to the contractor exceed the amount of services performed or material supplied. By law, the contract must be completed for the agreed upon contract price.

Contractors can charge a down payment for their work, however, the down payment cannot be more than $1,000.00, or 10% of the contract price, whichever is less. There are no exceptions for special ordered materials. (With swimming pool contracts, the limits are $200.00 down or 2% of the contract, whichever is less.)

For those of you who would like more information about hiring contractors and writing home improvement contracts, the California State Contractor’s License Board has an excellent publication called “Home Improvement Contracts: Putting the pieces together”. This booklet contains a copy of the notices a contractor needs to give to home owners and has a list of other resources. It is free and can be obtained by calling 1 (800) 321-2752, or you can reach the CSLB at their web site, http://www.cslb.ca.gov/.

Fence Restrictions Q&A

QUESTION:

“We just bought a house last year and the fence at the rear and sides of the property need to be replaced. The side fence is a common fence shared with our neighbor and the rear fence is next to a park. My neighbor wants to build an eight feet tall fence but I am concerned that this may be a problem if I continue it across the rear yard since all of the other fences that face the park are only six feet tall. Are there any code requirements for fencing? Also, I want to build a privacy fence in my front yard, is there a height limitation?” – M.C., Fremont

ANSWER:

There are several restrictions and requirements for fencing that deal with not only the height of the fence, but also where it is located on the property. The three governing factors for fencing are the Uniform Building Code, local municipal ordinances and neighborhood conditions, covenants and restrictions (CCR’s).

As far as the Uniform Building Code is concerned, The maximum height that you can build a fence without a permit is six feet. Any fence more than six feet in height, measured from the ground up, would require a permit.

The reason for this is that a fence is basically a “wall” with minimal supports, which can be subject to wind loads and soil stability. Most people do not realize the force that wind can have on a fence, particularly if it is more than six feet tall. It is common for wind to blow down fences during severe storms.

Fences that are not properly supported also can fall or fail when the soil is saturated with water, such as during periods of heavy rain. Therefore it is important that fences are properly constructed to withstand these external forces.

Local ordinances and neighborhood CCR’s, however, are more restrictive and more specific. In addition to the maximum eight-foot limitation, there is also a four foot and 30-inch limitation on fences, depending upon where the fence is located on the property. Usually rear and side yard fences can be built up to the six or eight-foot height unless there are more specific neighborhood restrictions. It is when the fence projects beyond the front of the house and into the front yard of the property that the lower height restrictions kick in.

All homes have a front yard. The property line setback is typically measured from six inches back from the sidewalk to the front of the house or garage (whichever is closer to the sidewalk). Any fencing in this area is usually limited to a maximum height of four feet. If the house is located on a corner, there is a further restriction on sections of the fencing paralleling the corner that can be no higher than 30 inches.

The reason for this is pedestrian and vehicular safety. Building six or eight foot fences right up to the sidewalk would prevent one from seeing cars backing out of driveways, or children riding on bicycles or playing in a way that might affect cars on the street.

The proper way to construct a fence is to determine the size of the posts necessary. A six-foot fence normally requires 4X4 posts, and an eight foot tall fence normally requires 6X6 posts. I should point out that fences more than six feet in height may require some basic engineering since the building code is silent on their construction. Therefore before any construction is started, it is important that you consult with your local building department.

First, use a string line to lay out the posts, and dig the holes approximately eight feet apart. Most municipalities require that the posts be pressure treated wood. The diameter of the post hole should be twice the diameter of the post and at least 24 to 30 inches deep. Before the post is set, four to six inches of gravel should be placed at the bottom of each hole to allow for drainage underneath the post.

Once the post is set and checked for plumb in both directions, the hole is ready for concrete. The hole should be filled so that the concrete extends one inch above the soil. When pouring the concrete, it should be tamped or vibrated around the post to ensure a strong mixture. The concrete should then be sloped or tapered off away from the post to allow water to drain away. This is necessary if you do not want the base of the posts to rot away. When the concrete is poured below the top of the soil, water usually sits and pools at the base of the posts causing them to rot.

The next step is to install the kicker board between the posts and set the bottom and top rails before nailing up the fence boards. Remember to use galvanized nails as they are able to resist rusting.

If you have any questions or concerns about the height limitations for the fencing around your property, or the actual placement of the fencing in relationship the house or property line setbacks, you can call the City of Fremont’s Planning Division at 510-494-4455.

SB 800, Part 2, Legal Limitations

When Senate Bill 800 was passed, the intent was to create a bill that would benefit both builders and consumers. The bill was designed to control to the soaring costs and occurrence of litigation involving construction defects. This bill affects newly constructed homes, town homes, and condos sold after the first of January 2003. One of the most controversial parts of the bill that will have the greatest affect on new home buyers is the fact that the bill establishes new statutes of limitations within which a claim for a construction defect must be made.

The new statutes of limitations contained in this bill are not all inclusive in terms of what they cover. Rather, they have been designed to apply to only specific components, under certain conditions, and for only stated periods of time. While these new statutes of limitations will be offering relief to builders, manufacturers and insurance companies, they are going to impact a homeowner’s ability to seek relief from construction related claims, as well as limit their ability to discover defects. Let me explain.

SB 800 requires several different specific periods of warranty coverage to protect the interest of the new homebuyer. The most basic coverage builders must offer is a minimum one year express warranty covering the “fit and finish” of certain building components. This is similar to the one-year warranty builders are offering now, yet it is limited to only the cosmetic and finish items in the house.

There are strict time limitations contained in the bill which require builders to be responsible for certain construction defects for up to a ten-year period. Although the ten-year time frame is similar to the previous California statute of limitation for latent (hidden) defects, SB 800 specifically lists categories of items that would be covered. These categories include the most litigated issues involving new construction; water penetration through the exterior of the building (siding, roof, windows and doors), structural issues (foundations, framing), soil issues (movement, settlement, drainage), and fire protection issues.

With regards to water penetration the bill expressly states that water shall not pass beyond, through or around any windows, doors, roof, decks, balconies, flashings, or trim of the building. Foundations, slabs, patios, walks, and drainage systems, installed as part of the original construction shall not allow water, vapor, or soil erosion to enter or come in contact with the building so as to cause damage to another building component.

The provisions governing structural and fire protection issues state that all structural components and foundations are required to be constructed according to the wind, fire, and seismic design criteria set forth in the code adopted at the time of construction, and shall not cause the structure to be unsafe. The requirements for soil basically state that soil shall not cause the ground upon which the structure is built, to become unusable for its intended purpose, and shall not allow damage to be caused to other portions of the house.

While these provisions of SB 800 provide much protection for the consumer, the particular provisions for the plumbing, mechanical, and electrical systems, there are substantial limitations on the provisions for walks and patios, landscaping and drainage systems, and manufactured products (windows, doors, fireplaces, plumbing and electrical fixtures, etc.).

The plumbing, mechanical, and electrical systems are required to operate properly and not impair the use of the house, or cause an unreasonable risk of fire. However, no action is allowed for defects in these systems after four years from the date of the original construction. This language suggests that these systems only need to be designed and installed so that they remain serviceable for a four-year period, which is a small percentage of a house’s normal life span of 50 to 75 years. Changing or repairing these systems because of material or installation defects can be expensive, disruptive to the structure, and should not really be necessary during the normal life of the house.

Paint and stains shall be applied so as not to cause deterioration to the building surfaces for as long as the manufacturer warranties them, yet no action can be brought after five years. Installed irrigation systems and drainage are required to “survive” for only one year, except that a claim can be made within two years of the close of escrow.

Finally, there is a “catch-all” clause that states the provisions in the bill are intended to address every function or component of the building, and if there is an issue that is not specifically addressed by these standards, it shall be actionable if it causes damage.

Also, if there is no representation of a “useful life” for a particular manufactured product, then the useful life will only have to be one year.

Anyone reading through SB 800 will realize that the time frames to file a claim for a construction defect are not as clear or specific as the bill intended. The fact that the bill contains some vague language, sets numerous warranty periods with various restrictions, and requires specific action on the owner of the building to maintain the building, will change how construction related issues are resolved, or tried and defended in court. A homeowner who is not familiar with the provisions of this bill could be at a definite legal disadvantage in trying to resolve a dispute involving construction defects.

SB 800 – New Rules for Builders – Part 1

If you purchased a new house after January 1, 2003, or are planning to buy one, Senate Bill 800 affects your rights as a homeowner, and the rights of a builder to correct deficiencies discovered in new construction. Senate Bill 800 was passed on August 31, 2002, and signed into law by Governor Davis on September 21, 2002. SB 800 applies to all condos, town homes, and single-family residences that close escrow after the first of this year.

This bill is significant because it makes major changes to the laws governing construction defects. Among other things, the bill eliminates the four and ten year statutes of limitations for patent and latent defects that homeowners now have to bring suit against builders. It attempts to define defects by establishing specific standards that components of a house must meet to be considered serviceable, and it creates a detailed process that both the builder and home owner must follow before litigation for defects can occur.

Up until December of 2000, a homeowner could sue a builder for construction defects as long as they were discovered within the four and ten year statute of limitations. However, in December of that year, the California Supreme Court handed down a decision in a case known as Aas v. Superior Court (2000, 24 Cal. 4th 627), that stated a builder was not responsible for construction defects unless the defect caused personal or property damage. This was a major setback for consumers and gave builders a legal defense to avoid being responsible for defective construction.

Senate Bill 800 attempts to change the effects of the Aas decision, and in the process creates an uncertain legal landscape for both builders and consumers. While the bill was drafted to provide more protection for both builders and homeowners, builders, insurance companies, and attorneys have clearly influenced its final form.

To understand the legal implications of SB 800, let’s look at what the bill entails. First, this bill states that any action seeking damages for construction defects against a builder, subcontractor, product manufacturer, or design professional, will have to comply with the requirements and time frames of this bill. The bill also says that a homeowner cannot file for a claim of defect(s) until the builder has had a chance to inspect and repair the alleged deficiency. These two requirements benefit both the builder and the homeowner.

In order to establish a claim, a homeowner must submit a written notice to the builder stating the defect(s). Then, the builder has 14 days to schedule and complete the initial inspection of the defect(s). If destructive testing is necessary, repairs must be done within 48 hours, and the costs borne by the builder. If a second inspection is required, it must be performed within 40 days of the initial inspection. After the defects have been substantiated, the builder, subcontractor, or manufacturer has 30 days to make an offer to repair the problem. These specific time periods are so restrictive that they could actually end up delaying the process and be argued by the builder or owner in court.

If the homeowner does not want the builder or subcontractor to actually make the repair, they can request up to three additional contractors to bid the repair of the defects, and then select one to perform the work. The builder would then pay the other contractor for the repairs. The builder is also allowed to offer a cash settlement in lieu of a repair. The bill also states that every effort shall be made to complete the repair within 120 days.

Under the provisions of this bill, the builder is not be responsible for defects or damages resulting from an act of God or nature, an alteration or wear and tear, a homeowner’s failure to maintain their home, or their failure to minimize or prevent damage from occurring. SB 800 puts specific responsibilities on homeowners to perform detailed maintenance (as provided by builders and manufacturers), and exercise care whenever modifying or repairing their homes. If an owner fails to properly maintain a component and damage occurs, the builder may not be responsible. Yet there is no language in the bill stating what normal maintenance is, or what specific duties an owner has to keep his or her home in good repair.

So what actually constitutes a defect? There are over 45 standards stating how certain components of a building shall function. The descriptions of the standards are very generic, somewhat vague, and essentially state the obvious. For example, the standards for components preventing water intrusion (exterior siding, windows, doors, roofs, foundations) state that the component shall not allow unintended water to pass beyond, around or through its designed or actual moisture barrier. What constitutes unintended water?

Another example of vague language in the bill is the standard for foundations, retaining walls, and other concrete surfaces, which states that there shall not be substantial cracking or vertical displacement. How much is substantial cracking or vertical displacement, one half inch, or two inches? Right now, there are no clear answers, and each situation would have to be judged separately. Without defined and measurable standards, builders and owners may not come to agreement on what really needs to be done to correct a defect.

While the standards attempt to define construction defects, they are not the panacea that the legislature had hoped for. To make matters worse, SB 800 has dramatically changed the statute of limitations within which various components are to operate properly, potentially compromising the quality of new construction. In my next column I will discuss the changes in these limitations, and what affect they will have on buyers of new homes.