The Indiana Home Improvement Act is a statutory consumer protection law designed to protect homeowners from unscrupulous contractors. Contractors who violate the act may suffer severe penalties. Contractors may be violating the act simply by using contracts that fail to provide statutory information. The following information is intended to describe the most pertinent details of the act in simplified form.
WHO DOES IT APPLY TO?
The Indiana Home Improvement Act applies to any person or entity who provides services or supplies materials for the alteration, repair or modification to a residential property. For purposes of the act, the residential property or dwelling includes its fixtures, structures, and improvements.
NOTE: Trades that are most typically affected by the act include, but is not necessarily limited to the following: Electricians, Plumbers, Roofers, Landscapers, Window installers, Garage Door installers, carpet installers, painters, remodelers, swimming pool contractors, and alarm installers. Any other vendor who provides goods or services to a residential property, may also be subject to the act.
WHEN DOES IT APPLY?
The act applies to any contract, oral or written, between a vendor and an Indiana residential homeowner, which concerns a home improvement project when the contract price exceeds One Hundred and Fifty ($150.00) Dollars. The contract price includes the actual work or materials installed, but excludes financing costs, loan consolidation amounts, taxes, and governmental fees paid by or on behalf of the consumer, amounts returned to or on behalf of the consumer, or similar costs not related to the home improvement.
WHAT DOES THE ACT REQUIRE?
Where the work performed requires a permit, the contractor must secure a permit. Failure to observe this may void the contract and subject the contractor to sanctions and penalties under the Home Improvement Act.
Contractor must use a written contract that contains the following provisions:
Name of consumer;
Address where home improvement to be performed;
Name and address of Home Improvement supplier;
Name of supplier's representative and telephone number where problems can be reported;
Date the contract was submitted to consumer;
Date the contract offer will expire, if not accepted (if any);
A reasonably detailed description of the home improvement to be provided;
NOTE: If specifications are not provided in the contract itself, then the contract must state that the specification will be provided to the consumer before any work is performed and that the contract is subject to the consumers separate written and dated approval, before any work begins.
The approximate commencement and completion dates for the project;
A list of any contingencies that might alter the commencement and completion dates;
The home improvement contract price;
Signature lines for the supplier or its agent and for each consumer who is to be a party to the contract, along with a space for the name of each signatory to the contract to be printed or typed, immediately following or below the signature line.
SPECIAL PROVISIONS APPLY WHEN THIRD PARTY PAYOR IS INVOLVED:
If a third party payer, including an insurance company, is expected to pay all or part of the contract price, the following provisions apply in addition to those outlined above:
Information in the contract regarding contract price, starting and completion dates, and contingencies that might affect those dates shall be provided to the extent the damage or cost is reasonably known to the home improvement supplier
The requirement for the supplier to provide a description of work regarding the repair of any damage or loss may be satisfied with a statement that the subject property, or part thereof, will be restored to the same condition that existed before the damage or loss.
The requirement for the supplier to provide a start and completion date may be satisfied by stating in number of days the amount of time the project will take to complete from the date the insurance carrier provides sufficient approval for performing the alterations or repairs.
The contract price provision of the contract may be expressed in terms of the amount the consumer is obligated to pay over and above the amount a third party payor will pay for the alterations or repairs.
The supplier may include an option on the written contract for the Consumer to authorize in writing the commencement of work without specifications, but the language must state that the consumer is obligated to pay for the repairs or restoration work to the extent of any specifications agreed to by the insurance carrier.
Finally, no modification of the contract is enforceable against the consumer unless the modification is in writing and signed by the consumer.
IMPORTANT: The Home Improvement Act requires the Supplier or the Supplier's Agent to sign the contract agreeing unequivocally to the terms expressed in the agreement BEFORE submitting it to the consumer for signature and approval.
IMPORTANT: The Supplier must give a copy of the signed contract to the Consumer on the day the consumer signs the agreement and there must be a space provided under the Supplier and Consumer's signature indicating the date each party signed the agreement.
PENALTIES FOR VIOLATING THE ACT:
A Supplier who violates this act has committed a deceptive act. The Supplier may be sued or sanctioned in an action by the Indiana Attorney General or the Consumer. The penalties for committing a deceptive act include:
1. Injunctive relief by Attorney General
2. Rescission of Contract requiring money received by Supplier returned to Consumer
3. Voiding Contract or provisions within the contract
4. Payment of costs associated with Attorney General's investigation and prosecution
5. Court appointment of a Receiver to seize control and operation of Suppliers business
7. Actual damages.
A more detailed description of each type of Construction Law issue can be found through the links below:
Expressed and Implied Warranties
When these difficult issues arise, you need an experienced construction attorney to help guide you through the maze of legal procedures necessitated by rules and regulations. Call us at McNevin and Schiff. We know how to guide you through it with comfort and speed.
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