1. Construction Contracts -- New State Law Requirement S
State laws are making it really tough upon contractors by requiring specific disclosures and
statements in their do it yourself and construction contracts. The days of handshake agreements are
over. Failure to include state-mandated disclosures or statements in a construction contract can result
in fines, or make any construction agreement null and emptiness.
Many contractors are unaware of these state alterations in the laws affecting contracts. Contractors
typically run small businesses and set their emphasis on building to state codes instead of keeping
track of legal changes required by state contract law. Many contractors still conduct business on a
handshake or use a simple "boilerplate" one-size-fits-all contract that most-likely omits specific state
requirements.
Some of the toughest states on construction agreement requirements are pennsylvania , Texas, New
York, new jersey , Florida, and california.
Pennsylvania requires a large list of disclosures to appear in a construction contract -- such as start
and finish dates, names and addresses of subs, insurance coverage and a phone number for
Pennsylvania agency of Consumer safety. Omit these disclosures and your construction agreement is
unenforceable in Pennsylvania. Some clauses that are commonly found in home improvement
contracts can actually render the agreement unenforceable. Failure to comply with the state needs is
a misdemeanor when the contract is for a little job under $2,000. But if the work is a larger work - for
over $2,000, a violation is a felony.
Texas requires that contractors deliver a 2-page disclosure statement before the construction
agreement is signed. Tx Property Code requires a notice in contracts for building or remodeling a
residential property that qualifies like a homestead. Forget this information and you're liable for up to
three times the actual damage plus attorney's fees. Arbitration clauses in Texas construction
contracts have to be in 10-point bold type, or they're void.
New York requires a large list of specific disclosures in contracts for do it yourself , home repair, and
construction of customized homes contracts. Failure to comply brings a fine of $100 to $2,five
hundred.
New Jersey requires all home improvement contracts for more than $500 maintain writing. Failure to
comply can result in offering the property owner a full refund , or awarding three times any damages
triggered.
Florida requires a 3-day right to cancel in your contract or you're subject to a $1,000 fine. Omission
of the construction business recovery fund notice in a contract risks a $500 good.
California requires specific disclosures in every agreement. Omit the ones required by sections
7030, 7159 or 7164 of the Business and Professions Code and you'll be explaining to their state
License Board why your license shouldn't be pulled. If your agreement doesn't have the disclosures
required by the Code of Federal Regulations area 460, you may be subject to a $11,000 fine! At
greatest , you have no right to collect.
How can companies protect themselves? big construction companies employ lawyers to write their

2. own contracts. Smaller do it yourself contractors have to figure out for themselves what they have to
include in their contracts to make sure that they're in compliance. A contract that doesn't have all the
disclosures required and that doesn't fulfill all your state's needs is like not having an agreement at
all. Not only are you at the mercy of your customer's goodwill, but you might be in trouble with the
regulation.
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