Legal Requirements for Indiana Home Improvement Contractors
If you own a business that provides labor or materials to homeowners, then you should be aware of an Indiana law that requires certain elements to be included in your contracts with customers. The Indiana Home Improvement Contract Act (“HICA”) applies to an individual or a business that regularly provides real property home improvement services to Indiana residential property owners where the project exceeds $150. HICA requires certain information to be included in any home improvement contract, including estimates given to homeowners, if the contractor uses the estimate as the contract with the homeowner. Home improvement contracts must include:
Name and address of the homeowner;
Address where the home improvement will be conducted;
Name of the contact person with the contractor and phone number where the homeowner can report any problems;
The date the contract was given to the homeowner;
The date the contract will expire if it is not accepted by the homeowner;
The approximate start date and completion date of the project;
A reasonably detailed description of the project;
Total cost of the project and payment terms;
A statement that the contractor will not submit any insurance claims on behalf of the homeowner;
The name and address of any subcontractors or suppliers that will work on the project; and
Signature lines for both the homeowner and the contractor.
In addition to these specific items that need to be added to the contract, HICA specifies that the contractor must sign the agreement before submitting it to the homeowner. Also, once the agreement has been signed, the contractor must provide a fully signed copy to the homeowner along with a statement that the homeowner can cancel the contract by delivering a cancellation form attached to the agreement.
If an insurance company is paying for any part of the project, then there are additional rules that apply. Finally, any changes to the project must be in writing and signed by both the homeowner and the contractor.
The potential risks for a contractor that does not comply can be serious. The homeowner can sue the contractor for deception. Further, the Indiana Attorney General can sanction the contractor with a fine, a court appointed receiver to seize the contractor’s business, and/or a requirement that the contractor refund all money to the homeowner, even if the project is complete.
Indiana contractors can minimize this risk through full compliance with HICA. Although the requirements seem voluminous, including these provisions in a written contract may also help head off potential disputes over a project through clear and complete documentation between the homeowner and the contractor. A smooth project and a satisfied customer is a good outcome for any contractor.