CT Home Improvement Contract
A CT Home Improvement Contract is not only necessary but is required by law no matter how small the amount of work to be performed. In addition, Home improvement contractors are required to be registered by the State of Connecticut, and depending on the type of work they perform, they may even need to have a special license. For instance, electricians, plumbers and even well drillers are required to be licensed for their particular trade as well as have an HIC registration number.
In Connecticut, as similarly in most states, the Connecticut Home Improvement Act requires you to register with the Connecticut Department of Consumer Protection, whether you are an individual or business entity if you are contracting with a consumer to perform home improvement work on residential property. “Home Improvement” work is broadly defined as any permanent change to residential property, including but not limited to driveways, swimming pools, porches, garages, roofs, siding, insulation, flooring, patios, landscaping, painting, fences, doors and windows, and waterproofing.
Homeowners can now easily verify registrations and licenses of contractors online. Check out our free Guide for Connecticut Homeowners. This is a wise step to follow before hiring any contractor for work on your home. If they are cutting corners by failing to register, what other corners might they be cutting? Although there is no guarantee, your chances of avoiding problems down the line are much greater if you are using a licensed and registered contractor.
In Connecticut, as similarly in most states, the Connecticut Home Improvement Act requires you to register with the Connecticut Department of Consumer Protection, whether you are an individual or business entity if you are contracting with a consumer to perform home improvement work on residential property. “Home Improvement” work is broadly defined as any permanent change to residential property, including but not limited to driveways, swimming pools, porches, garages, roofs, siding, insulation, flooring, patios, landscaping, painting, fences, doors and windows, and waterproofing.
Homeowners can now easily verify registrations and licenses of contractors online. Check out our free Guide for Connecticut Homeowners. This is a wise step to follow before hiring any contractor for work on your home. If they are cutting corners by failing to register, what other corners might they be cutting? Although there is no guarantee, your chances of avoiding problems down the line are much greater if you are using a licensed and registered contractor.
CT Home Improvement Contract Requirements
So even if your contractor is properly licensed and registered in Connecticut, they still need to comply with the legal requirements of setting forth in detail certain CT home improvement contract conditions. These required contract conditions as set forth in Connecticut General Statutes Section 20-429 include, but are not necessarily limited to, the following:
(i) the contract must be in writing;
(ii) the written contract must be signed by the owner and the contractor;
iii) the written contract must contain the entire agreement between the owner and the contractor;
(iv) the written contract must contain the date of the transaction;
(v) the written contract must contain the name and address of the contractor and the contractor's registration number;
(vi) the written contract must contain a notice of the owner's cancellation rights in accordance with the provisions of The Home Solicitation Sales Act contained in chapter 740 of the Connecticut General Statutes, which chapter requires among other things in Section 42-135a that:
(a) the contractor before furnishing copies of the “Notice of Cancellation” to the homeowner, must complete both copies by entering the name of the contractor, the address of the contractor's place of business, the date of the transaction, and the date, not earlier than the third business day following the date of the transaction, by which the homeowner may give notice of cancellation;
(b) furnish each homeowner, at the time such homeowner(s) signs the home solicitation sales contract or otherwise agrees to buy services from the contractor, a completed form in duplicate, captioned “NOTICE OF CANCELLATION”, which shall be attached to the contract or receipt and easily detachable, and which shall contain in ten-point boldface type the statutory required information and statements in the same language as that used in the contract; and
(c) inform each homeowner signing the contract, orally, at the time of signing, of such buyer's right to cancel.
(vii) the written contract must contain a starting date and completion date;
(viii) the written contract must be entered into by a registered salesman or registered contractor; and
(ix) the written contract must include a provision disclosing each corporation, limited liability company, partnership, sole proprietorship or other legal entity, which is or has been a home improvement contractor or a new home construction contractor, in which the owner or owners of the home improvement contractor are or have been a shareholder, member, partner, or owner during the previous five years.
Some other conditions to be aware of regarding CT home improvement contract law are that negative construction clauses are typically not allowed. In other words, a contractor cannot require or obligate an owner to instruct the home improvement contractor by a specified date, that periodic home improvements are not to be performed unless it also includes a provision requiring the contractor to remind the owner of that obligation by means of a card or letter mailed to the owner and postmarked not earlier than twenty days, and not later than ten days, prior to such date.
One other obvious requirement of course is to make sure the contractor actually gives the home owner a written copy of the CT home improvement contract. That may seem like a simple matter, but I have been surprised over the years as to how poorly the contractor pays attention to his detail and either has no written contract at all, or simply writes the work to be performed on a note pad. The more professional and prepared the contractor is when entering into a contract to perform services for a homeowner, the less likely there will be problems down the line for both parties. I have represented homeowners and contractors regarding home improvements as well as contractors in large scale commercial projects. A strong written contract can make a huge difference regardless of whether you are the contractor or person hiring the contractor. It will also avoid disputes later on if the parties are very specific about the work to be performed, the materials to be used and the time to complete. A strong contract avoids confusion and since it avoids confusion, there is less likely to be a dispute that cannot be settled between the parties. No one likes to litigate or arbitrate, especially if the whole matter could have been avoided with a carefully written contract.
(i) the contract must be in writing;
(ii) the written contract must be signed by the owner and the contractor;
iii) the written contract must contain the entire agreement between the owner and the contractor;
(iv) the written contract must contain the date of the transaction;
(v) the written contract must contain the name and address of the contractor and the contractor's registration number;
(vi) the written contract must contain a notice of the owner's cancellation rights in accordance with the provisions of The Home Solicitation Sales Act contained in chapter 740 of the Connecticut General Statutes, which chapter requires among other things in Section 42-135a that:
(a) the contractor before furnishing copies of the “Notice of Cancellation” to the homeowner, must complete both copies by entering the name of the contractor, the address of the contractor's place of business, the date of the transaction, and the date, not earlier than the third business day following the date of the transaction, by which the homeowner may give notice of cancellation;
(b) furnish each homeowner, at the time such homeowner(s) signs the home solicitation sales contract or otherwise agrees to buy services from the contractor, a completed form in duplicate, captioned “NOTICE OF CANCELLATION”, which shall be attached to the contract or receipt and easily detachable, and which shall contain in ten-point boldface type the statutory required information and statements in the same language as that used in the contract; and
(c) inform each homeowner signing the contract, orally, at the time of signing, of such buyer's right to cancel.
(vii) the written contract must contain a starting date and completion date;
(viii) the written contract must be entered into by a registered salesman or registered contractor; and
(ix) the written contract must include a provision disclosing each corporation, limited liability company, partnership, sole proprietorship or other legal entity, which is or has been a home improvement contractor or a new home construction contractor, in which the owner or owners of the home improvement contractor are or have been a shareholder, member, partner, or owner during the previous five years.
Some other conditions to be aware of regarding CT home improvement contract law are that negative construction clauses are typically not allowed. In other words, a contractor cannot require or obligate an owner to instruct the home improvement contractor by a specified date, that periodic home improvements are not to be performed unless it also includes a provision requiring the contractor to remind the owner of that obligation by means of a card or letter mailed to the owner and postmarked not earlier than twenty days, and not later than ten days, prior to such date.
One other obvious requirement of course is to make sure the contractor actually gives the home owner a written copy of the CT home improvement contract. That may seem like a simple matter, but I have been surprised over the years as to how poorly the contractor pays attention to his detail and either has no written contract at all, or simply writes the work to be performed on a note pad. The more professional and prepared the contractor is when entering into a contract to perform services for a homeowner, the less likely there will be problems down the line for both parties. I have represented homeowners and contractors regarding home improvements as well as contractors in large scale commercial projects. A strong written contract can make a huge difference regardless of whether you are the contractor or person hiring the contractor. It will also avoid disputes later on if the parties are very specific about the work to be performed, the materials to be used and the time to complete. A strong contract avoids confusion and since it avoids confusion, there is less likely to be a dispute that cannot be settled between the parties. No one likes to litigate or arbitrate, especially if the whole matter could have been avoided with a carefully written contract.
Arbitration vs. Litigation
I also recommend that every CT home improvement contract contain an arbitration clause in case the parties do get into a dispute that they cannot settle among themselves. The CT Home Improvement Act is silent on this subject and as a result it is most likely going to be the contractor's attorney that discusses that subject with the contractor to decide on whether or not arbitration or litigation better suits the contractor. That being said however, if the CT home improvement contract does not have an arbitration clause, there is nothing preventing the homeowner from requiring that there be an arbitration clause set forth in the written contract.
Benefits of a Construction Arbitration Clause
Arbitration is less costly and takes less time to resolve a dispute than if the parties were to litigate the matter. This is good for both sides. Arbitration is less costly because there is not a prolonged discovery and motion process with attorneys filing motions and briefs and asking for depositions. As a result, the matter moves along rather quickly and regardless of the outcome the parties can then move on. The arbitrator, or arbitration panel, has broad discretion to look at evidence, listen to witness testimony, examine the contract, examine exhibits and apply whatever law or building codes necessary to make a decision in the matter. Also, when the CT home improvement contract is written, the parties can choose whether they want a one person arbitrator or a three person arbitration panel to hear and render a decision on the dispute. The parties can also choose the town or city in which they would like the panel to hear the matter. Arbitration matters are usually heard at an office or conference room large enough to accommodate everyone, they are not done at a courthouse.
The arbitrators do not have to render an opinion based on case law as a judge might do in a civil case and they do not have to apply specific rules of law. For example, say an arbitration matter is based whether or not the contractor was justified in going down 3 feet extra and pouring extra cement to build a solid foundation based on the conditions of the homeowners property and the contract allowed for extra payment based on the depth of the excavation and the amount of cement poured. Let's say the extra excavation and cement cost an extra $20,000 which the homeowner refused to pay. In a court case, it is pretty much an all or nothing win for the contractor. If the contractor wins, he gets $20,000, but if he loses, he gets nothing. Well in arbitration, the arbitrators get to weigh all sorts of factors and can award the contractor $5,000 or $10,000 or $15,000, it is not necessarily an all or nothing award when it comes to arbitration.
Another important benefit of a construction arbitration clause in a CT home improvement contract is that it is next to impossible to appeal an arbitration decision, whether it is a residential or commercial project. A number of years ago I won a large commercial arbitration for a subcontractor client of mine and the general contractor appealed to the Superior Court trying to convince the judge to overturn the arbitration award based on a "pay when paid" clause in an AIA contract. It came down to an interpretation of what was meant by this "pay when paid" clause in the contract. The general contractor argued that it only had to pay my subcontractor client if and when the general contractor was paid by the project developer. I argued that the "pay when paid" clause did not mean the general contractor never had to pay my subcontractor client it only meant that it had to pay my client once a reasonable period of time passed after the work was completed, otherwise developers could save money on projects by just paying the general contractor and hurting many of the subcontractors. The judge listened to the arguments made by the project developer's attorneys about not properly considering the evidence and the witnesses testimony. The judge correctly rejected the arguments and confirmed the arbitration award for my subcontractor client. Basically, an arbitration award cannot be overturned unless the other side can prove fraud or collusion by the arbitrators in rendering their decision. Judges hate to second guess arbitrators. Arbitration serves an important role in freeing up the courts and is widely recognized by judges across the country.
The arbitrators do not have to render an opinion based on case law as a judge might do in a civil case and they do not have to apply specific rules of law. For example, say an arbitration matter is based whether or not the contractor was justified in going down 3 feet extra and pouring extra cement to build a solid foundation based on the conditions of the homeowners property and the contract allowed for extra payment based on the depth of the excavation and the amount of cement poured. Let's say the extra excavation and cement cost an extra $20,000 which the homeowner refused to pay. In a court case, it is pretty much an all or nothing win for the contractor. If the contractor wins, he gets $20,000, but if he loses, he gets nothing. Well in arbitration, the arbitrators get to weigh all sorts of factors and can award the contractor $5,000 or $10,000 or $15,000, it is not necessarily an all or nothing award when it comes to arbitration.
Another important benefit of a construction arbitration clause in a CT home improvement contract is that it is next to impossible to appeal an arbitration decision, whether it is a residential or commercial project. A number of years ago I won a large commercial arbitration for a subcontractor client of mine and the general contractor appealed to the Superior Court trying to convince the judge to overturn the arbitration award based on a "pay when paid" clause in an AIA contract. It came down to an interpretation of what was meant by this "pay when paid" clause in the contract. The general contractor argued that it only had to pay my subcontractor client if and when the general contractor was paid by the project developer. I argued that the "pay when paid" clause did not mean the general contractor never had to pay my subcontractor client it only meant that it had to pay my client once a reasonable period of time passed after the work was completed, otherwise developers could save money on projects by just paying the general contractor and hurting many of the subcontractors. The judge listened to the arguments made by the project developer's attorneys about not properly considering the evidence and the witnesses testimony. The judge correctly rejected the arguments and confirmed the arbitration award for my subcontractor client. Basically, an arbitration award cannot be overturned unless the other side can prove fraud or collusion by the arbitrators in rendering their decision. Judges hate to second guess arbitrators. Arbitration serves an important role in freeing up the courts and is widely recognized by judges across the country.
Benefits of Litigating
As I explained above, there seems to be quite a few benefits to arbitration in construction disputes. Why then would anyone choose to litigate instead of arbitrate. Large commercial contracts use what are known as Architects Institute of America or AIA contracts and they contain arbitration clauses. Well one benefit I can think of in choosing litigation of arbitration could be that you feel you are going to have a very strong case and do not want to risk the arbitrators reducing the award based on witness testimony or other evidence that you feel might cloud their judgement. Also, it would be more costly for the other side to litigate, so if you feel they will iron out any disputes rather than engage in costly and prolonged litigation, you might choose to go with a litigation clause instead of an arbitration clause. This might be precisely the reason AIA contracts all use arbitration clauses, because the general contractor and subcontractors need to get paid on a timely basis and arbitration is faster and less costly.
What About later Changes to the CT Home Improvement Contract?
As is common, many times the specified work the contractor and home owner agreed on needs to change. It could be the scope of the work is increased, it could be some of the anticipated work is no longer necessary or the home owner feels that instead of a 12 foot by 15 foot addition, they really need it to be a 15 by 20 foot addition. CGS 20-429 gives some guidance on contract changes but still leaves some questions.
Connecticut General Statutes Section 20-429 also states, "Each change in the terms and conditions of a contract shall be in writing and shall be signed by the owner and contractor, except that the commissioner may, by regulation, dispense with the necessity for complying with the requirement that each change in a home improvement contract shall be in writing and signed by the owner and contractor."
This language is rather vague, and I counsel clients not to leave anything to chance when it comes to dealing with CT home improvement contracts. I advise getting every change in writing, signed, with a cancellation notice just as if it were a new contract. Violations are referred to the Connecticut Department of Consumer Protection and enforcement proceedings are brought by the Office of the Attorney General, and yes they do take home improvement violations seriously.
Criminal Liability
CGS Sec. 42-141. Penalty. Violation made unfair or deceptive practice or act. provides in part that any person who violates any provision of Home Solicitation Sales Act shall be guilty of a class C misdemeanor.
(b) Violation of any of the provisions of sections 42-135a, or 42-137 to 42-139, inclusive, or failure to honor any provisions of the notice of cancellation required by this chapter shall constitute an unfair or deceptive act or practice as defined by section 42-110b.
(b) Violation of any of the provisions of sections 42-135a, or 42-137 to 42-139, inclusive, or failure to honor any provisions of the notice of cancellation required by this chapter shall constitute an unfair or deceptive act or practice as defined by section 42-110b.
Enforcement Actions by the Connecticut Department of Consumer Protection
While the Connecticut Attorney General's office takes Connecticut Home Improvement Act violations seriously, it is important to get out ahead of the matter and be completely honest in resolving the matter as quickly as possible. It is of course a matter of degree and the more serious the violation the more costly it will be to resolve the situation. A simple CT home improvement contract violation will be dealt with differently than code violations, unfinished work and shoddy or inferior workmanship. It is possible in some situations to avoid criminal court and a class C misdemeanor charge if the contractor is open to working things out with the homeowner and getting into compliance as soon as possible. A small fine and some form of restitution can be alot easier in the long run, even if the contractor feels they did nothing wrong.