The second part of our series on the requirements for home improvement contracts focuses on New York City. Pursuant to NY General Business Law on Home Improvement Contracts § § 770 to 776 and NYC Administrative Code § § 20-385 to 20-397, every home improvement contract should include:
- The contractor’s name, address, telephone number and license number.
- The dates, or estimated dates, when the work will begin and be substantially completed, including a statement of any contingencies that would materially change the approximate or estimated completion date. Besides the estimated or approximate dates, the contract must also specify whether the contractor and the owner have determined a definite completion date to be of the essence.
- Description of the work to be performed, the materials to be provided to the owner, including make, model number or any other identifying information, and the agreed upon consideration for the work and materials.
- A payment schedule. If the parties select progress payments, the contract should show the amount of each payment and identify specific work that will trigger the payments.
- The following notice to the owner in clear and conspicuous bold face type:
“Any contractor, subcontractor, or materialman who provides home improvement goods or services pursuant to your home improvement contract and who is not paid may have a valid legal claim against your property known as a mechanic’s lien. Any mechanic’s lien filed against your property may be discharged. Payment of the agreed upon price under the home improvement contract prior to the filing of a mechanic’s lien may invalidate such lien. The owner may contact an attorney to determine his rights to discharge a mechanic’s lien.”
- A contract provision stating that the contractor must show the consumer a valid Certificate of Workers’ Compensation Insurance before beginning the work.
- Any advertised claims, including clearly stated charges, guarantees, or warranties.
- A “proof of payment” clause to shield you from any liability if the contractor fails to pay subcontractors or supply vendors.
- A “lien waiver” clause. With this, you can withhold final payment until the contractor submits proof of payment to all subcontractors and vendors. This knowledge helps prevent unpaid subcontractors and vendors from putting liens on your home.
- A notice to the owner that, along with any right otherwise to revoke an offer, the owner may cancel the home improvement contract until midnight of the third business day after the day on which the owner has signed an agreement or offer to purchase relating to such contract.
- A requirement that the contractor cleans the premises after he finishes his work.
- A notice to the owner purchasing the home improvement that, except as otherwise provided in General Business Law § 771 (g), the home improvement contractor is legally required to deposit all payments received before completion under Lien Law § 71-a(4) and that, instead of such deposit, the home improvement contractor may post a bond, contract of indemnity or irrevocable letter of credit with the owner guaranteeing the return or proper application of such payments to the purposes of the contract.
- A requirement that the contractor will comply with all applicable laws, regulations, and codes. A contractor licensed with the NYC Department of Consumer Affairs must file architectural plans with the Department of Buildings and have signed permits before beginning home improvement work.
The above list is not exhaustive. The parties to a construction contract should seek independent counsel to ensure that the agreement contains appropriate legal requirements and other matters agreed to between the parties.
At Yoars Law, we focus on being proactive legal advisors for our construction clients, guiding them through the complex legal issues as they arise, including drafting and reviewing contracts. We also provide transparent and predictable legal fees so our clients can consistently manage their budgets.