So far this year, eighteen states have
changed how construction contractors have to do business. Some changes are trivial.
Others will affect most contractors in the state. Here’s a state-by-state run-down
on the most significant changes.
Wisconsin – The
statute of repose for construction has been reduced from 10 years to seven years.
Every state sets a limit for making claims against a contractor. That limit is six
years in WI. But the claim period for construction defects doesn’t start running
until the defect is discovered. That could be many years. The statute of repose
now bars all claims seven years after substantial completion. Wisconsin Statutes
§ 893.89, effective April 18, 2018
West Virginia – Now
requires that agreements for jobs over $10,000 cover 15 specific terms – start and
completion dates, change orders, etc. A written contract is required with both the
owner and your subs. The license Board is authorized to request a copy of the contract
for any such job and has authority to discipline any contractor who fails to respond.
West Virginia Code of State Rules § 28-4-4, effective
April 16, 2018.
Virginia – Contracts by unlicensed
contractors are now unenforceable. Virginia Code Annotated § 54.1-1115, effective
April 30, 2018. The consumer information disclosure statement required in contracts
has been revised. 18 Virginia Administrative Code § 50-22-RBC, effective January 1, 2018. The list of prohibited acts
for all contractors has been revised. 18 Virginia Administrative Code § 50-22-260, effective January 1, 2018..
Tennessee – Has
added to the list of actions by home improvement contractors that constitute consumer
fraud. Tennessee Code Annotated § 39-14-154(b), effective July 1, 2018.
South Dakota – No
matter what the contract says, South Dakota Codified Laws § 5-26-6 requires that
money due subs and suppliers on state public works projects begins accruing interest
at the rate of 10% per year 30 days after the prime contractor has been paid. Effective
July 1, 2018.
Nebraska -- If insurance will
cover at least part of the cost of a residential repair project, the Insured Homeowners
Protection Act, § 44-8601 to 44-8608: (1) Requires new contract disclosures in 14-point
caps, (2) Restricts any assignment of rights by the insured, (3) Requires an itemized
description and price for the work to be done, and (4) Voids the agreement if the
contractor violates any provision of the Act. Effective July 19, 2018.
Maryland -- Maryland Business
Regulation Code § 8-620 gives the Maryland Home Improvement Commission authority
to impose civil penalties of up to $5,000 for each violation of the code, whether
or not the offender is licensed. Effective July 1, 2018.
Kentucky – Courts in most
states won’t enforce a “pay-when-paid” clause in subcontracts because the clause
defeats lien rights. With a “pay-when-paid” clause, subs have no right to collect
if the prime contractor isn’t paid. A recent court decision indicates that Kentucky
courts will enforce pay-when-paid clauses in subcontracts.
California – Big
changes are coming for California solar contractors. Solar energy projects will
have to include a “Solar Energy System Disclosure Document” as part of the contract.
The aim is to standardize and simplify disclosures required for all residential
solar projects. The Contractors State License Board is required by law to release
a prototype disclosure statement by July 1, 2018. As of this writing, that hasn’t
happened.
No matter where you build, clients expect
you to know and comply with the law. Construction Contract Writer covers all these
changes and many more. Regular updates are quick and automatic. CCW is the best
way to be sure your contracts comply fully with the law of your state, no matter
how the law changes. The trial version is free.
