There has been a significant increase in home remodeling projects since the pandemic began over a year ago, and many people choose to hire a contractor to assist them. Not all contractors provide written contracts with the details of the project, such as total costs, start and completion dates, and the type and quantity of materials to be used. The lack of a written agreement sometimes leads to disputes after the project begins and may lead to arguments about payment at the end of the project. Fortunately for homeowners, Wisconsin has the Home Improvement Practices administrative code sections which set forth requirements and penalties if contractors fail to follow the rules. These rules can be found in Chapter ATCP 110 of the Administrative Code. The rules require a contract, and all changes to that contract, to be in writing and signed by the contractor and the homeowner if (1) the contractor requires money up front, prior to completing the project, or (2) if the contractor solicits a homeowner’s business away from the contractor’s regular place of business, by mail or telephone, or with brochures or circulars delivered or left at someone’s home.
The requirements under the code are applicable if the project involves “Home Improvement” which the code defines as follows:
“Home improvement” means the remodeling, altering, repairing, painting, or modernizing of residential or non-commercial property, or the making of additions thereto, and includes, but is not limited to, the construction, installation, replacement, improvement, or repair of driveways, sidewalks, swimming pools, terraces, patios, landscaping, fences, porches, garages, basements and basement waterproofing, fire protection devices, heating and air conditioning equipment, water softeners, heaters and purifiers, wall-to-wall carpeting or attached or inlaid floor coverings, and other changes, repairs, or improvements made in or on, attached to, or forming a part of, the residential or non-commercial property. The term extends to the conversion of existing commercial structures into residential or non-commercial property. “Home improvement” does not include the construction of a new residence or the major renovation of an existing structure.
As you can see, home improvement is defined in very broad terms. You should note that it does not apply to construction of a new residence or the major renovation of an existing structure.
If a written contract is required under the code based on the circumstances described earlier, the contract must contain the following information:
- The contractor’s name and address, and the name and address of the contractor’s sales representative or agent.
- A description of the work to be done and the principal materials to be used. If the contractor promises to install specific products or materials, the contract must clearly describe those products or materials.
- The total price, including finance charges. If the contract is for time and materials, it must clearly disclose the hourly labor charge.
- The dates by which, or the time period within which, the contractor will begin and complete the work.
- A description of any mortgage or security interest created in connection with the sale or financing of the home improvement.
- All warranties that the contractor makes for labor, services, products or materials furnished in connection with the home improvement.
- A description of every document incorporated in the home improvement contract.
- Insurance coverage included in the home improvement contract, if any.
Additional provisions in the Home Improvement Code require the contractor to provide the customer with a written notice advising that the customer has a right to receive lien waivers. The code also requires that the contractor inform the customer of all building and construction permit requirements, and the contractor must refrain from starting work until the permits have been issued.
Should a contractor fail to comply with these code requirements, a homeowner has several potential remedies including the following:
- Cancel the contract;
- Demand return of any payments which the contractor has not yet earned;
- Demand delivery of all materials the homeowner already paid for;
- Demand an accounting of all payments that were made by the homeowner;
- The homeowner may be able to recover twice the amount of any damages they sustain as a result of the contractor’s violation of the Home Improvement Code;
- A homeowner may be able to recover actual attorneys’ fees that they incur in pursuing claims against the contractor for violations of this code.
If a homeowner is in a position where they believe they have sustained damages because a contractor failed to comply with the Home Improvement Code, it is advisable that they consult with a litigation attorney to discuss their options.