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Ethics in Home Improvement Contracts

shutterstock_180965714-450Homeowners should always be cautious of unethical business practices by those working to gain access to homes and utilizing high-pressure sales or scare tactics to up-sell services to homeowners.

Many complaints to California’s Contractors State License Board (“CSLB”) are from the elderly who are falling victim to unlicensed individuals upselling unnecessary home service needs. Examples provide by the CSLB include homeowners being persuaded to sign over their home or being convinced of unnecessary repair work, for example replacing all of the home’s ductwork.

The CSLB provides the following points in locating and negotiating with a home improvement contractor:

  • Be wary of telemarketers offering special deals for air duct cleaning or seasonal HVAC tune-ups. Many make multiple calls until a homeowner takes the bait for a service call.
  • Always ask for the state contractor license number before considering any offer.
  • Make informed decisions about hiring a contractor or company by first checking CSLB’s website and review the contractor’s detail page to assure the license is in good standing.
  • If you are not sure about a company’s offer, get a second opinion from a different, licensed contractor or company.
  • Make sure the contract contains the notice about the three-day right to cancel.

Points to remember in entering into a Standard Home Improvement Contract

  • The contract is not for urgent service and repair, and negotiations to enter into a contract can be initiated by the contractor or the customer.
  • The total price for labor and materials is $500 or more. (The work is not for an emergency replacement or repair of $750 or less.)
  • A home improvement contract is an agreement between a contractor and a property owner or tenant that includes descriptions of all labor, services, and materials to be furnished and performed.
  • The customer has until midnight of the third business day after signing the agreement or purchase to cancel the contract.
  • The down payment may only be 10 percent of the total contract price or $1,000, whichever is less. Only pay for portions of the home improvement project as they are completed.