Does your home improvement contract comply with Indiana’s Home Improvement Contract Act (“HICA”)? The Act can be found at Indiana Code § I.C. 24-5-11. Its intent is to protect home owners by placing minimum requirements on the contents of home improvement contracts. The law places the burden on the home improvement contractors (not home owners) to use contracts that comply with the mandates of the act.
A home improvement subject to the law includes any alteration, repair, replacement, reconstruction or other modification of residential property. For purposes of the law, a home improvement contract means the written or oral agreement between a home improvement contractor and home owner to make an improvement for which the contract price exceeds $150.00.
Under HICA, home improvement contracts must include:
- The name of the home owner and the address of the home where the work will be done.
- The names and phone numbers where the home owner can direct problems and inquiries, as well as an e-mail address maintained by the contractor.
- The date the contract was submitted to the home owner and, if applicable, any time limit on the home owner’s acceptance of the home improvement contract.
- A reasonably detailed description of the proposed home improvement(s).
- However, if there are no specifications provided in the description of the work, a contractor can provide it later, so long as it is provided in a dated, written document prior to any work beginning and the home owner approves the specifications.
- A statement that announces the approximate starting and completion dates of the home improvement(s).
- A statement of any contingencies which would materially change the approximate completion date.
- The contract price.
- Signature lines for the contractor (or the applicable employees or agents) and for each home owner who is subject to the contract, including a legibly printed or typed version of that signature under each signature.
In addition to these mandatory contract provisions, the statute also requires that:
- A home improvement contract must be written so each home owner who is a party to the contract can reasonably read and understand it.
- A completed contract signed by the contractor must be provided to the home owner before the contract is signed by the home owner and before the contractor accepts a down payment for the work
- The home owner be provided a fully executed copy of the home improvement contract “immediately” after the home owner signs it.
- The contract must provide the dates each party signed the contract.
- A modification of a contract must be in writing.
If a contractor fails to comply with the statutory provisions, he or she is subject to a deceptive acts lawsuit, which can be brought by either the Attorney General or a home owner. A home owner can be awarded damages actually sustained, and a court may triple the damage award for a willfully deceptive act. However, an award of treble damages cannot exceed $1,000.00. A court can also award attorney’s fees to a prevailing party and void or limit the application of a contract resulting from the deceptive acts.
In sum, Indiana contractors need to be aware of their duties to owners and tenants before entering into any home improvement agreement over $150.00; and failing to know the law could be costly. Please note that this article is only a brief summary of HICA, not legal advice, nor does it establish an attorney-client relationship. Should you have any specific questions regarding HICA, or any other business planning needs, please do not hesitate to contact Gregory A. Sobkowski at Hodges and Davis, P.C.
Please note that this Article does not constitute legal advice nor does it establish an attorney/client relationship.
Hodges and Davis, P.C. — January 2020