When a homeowner requires repair or remodeling work on his or her home, the construction professional often has a greater understanding of home construction and applicable construction laws and codes. Without legal protections, homeowners are ripe for such service and material suppliers or “construction professionals” to take advantage of unsuspecting homeowners by not providing enough information about the work to be performed, overcharging such work, or performing the work in a hasty and shoddy or “defective” manner. As often happens, the homeowner learns too late about his or her legal rights and remedies.
The Purpose of the Home Improvement Contract Act
To protect homeowners and warn unscrupulous construction professionals from taking advantage of homeowners, Indiana enacted the Home Improvement Contract Act (commonly referred to as “HICA”) which provides a set of legal requirements construction professionals must meet when contracting with homeowners for work to be performed and the value of such work is more than one hundred and fifty dollars ($150.00). HICA also requires construction professionals to obtain all necessary licenses, insurance, bonding, and permits prior to beginning any work.
Required Contract Terms Under HICA
First, HICA requires that home improvement contracts include basic information such as the name and address of the homeowner and the residential property; the name and address of the construction professional; the date of the contract; a reasonably detailed description of the work to be done, and a statement that the specifications will be provided to the homeowner before any work is commenced under the contract, and that the contract is subject to the homeowner’s separate written and dated approval of the specifications; the approximate start and stop dates of the work; a statement of contingencies that would materially change the approximate completion date; the contract price; and signature lines for each homeowner – along with about 25 other requirements.
Homeowner Cancellation Rights
HICA also provides protection to homeowners through more specific rights. One example is a homeowner’s ability to cancel a home improvement contract. Indeed, the HICA clearly intends to provide homeowners with the ability to rescind a contract under certain circumstances. Accordingly, construction professionals are required to furnish a cancellation form to homeowners, properly labeled “NOTICE OF CANCELLATION”, and attach it to the contract in an easily detachable manner.
Insurance Funded Home Improvement Contracts
It is also often the case that home improvements are paid by the homeowner’s insurance or another party who caused damage to the home – HICA covers that, too. More specifically, HICA contains special provisions for contracts entered into for damage, loss, or expense that is to be paid, in whole or in part, from the proceeds of an insurance policy, or for which a third party is liable. For example, the homeowner may agree to a contract price expressed in terms of the homeowner’s liability for payment only after the application of insurance proceeds or payments from a liable third party.
Consequences of HICA Violations
While there are other important requirements of HICA, homeowners should know that construction professionals who violate HICA commit what are called deceptive acts that are actionable by either the attorney general or directly by the homeowner, and such construction professionals are subject to the penalties contemplated by Indiana’s Deceptive Consumer Sales Act (commonly referred to as “DCSA”). With proper statutory notice, an uncured deceptive act may become an incurable deceptive act which the homeowner eligible for three (3) times actual damages and reimbursement of their paid attorneys’ fees.
Contact Us Today
If you are a homeowner or construction professional who is interested in learning more about your rights and remedies provided for by HICA and DCSA, please reach out to our team today!
The information in this article is for general information purposes only. Nothing in this article should be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or viewing does not constitute an attorney-client relationship.
