Twenty-five states have made changes in the last few months. Highlights follow. As you read down the list, keep a tally. How many of these changes make it easier to do business as a construction contractor?

 

Alabama – Owners have ten days to cancel residential roofing repair contracts if any part of the insurance claim is denied. Work can’t start until the claim is settled. Contractors are barred from negotiating the settlement. Effective August 1, 2012

 

Arizona – Contracts for repair of storm damage require specific notices and disclosures. Owners have three days to cancel after any part of the insurance claim is denied. Work can’t start until the claim is settled. The down payment can’t exceed 50% of the contract price. Enacted April 2012.

 

California -- No matter what the contract says, a 2% per month penalty plus attorney fees applies on retention wrongfully withheld. Operative July 1, 2012. Licensed contractors and subcontractors are prohibited from inserting into any contract either an indemnity clause or a waiver of lien rights which would be void under California law. Operative July 1, 2012. Residential construction consultants need a contracting license and have to comply with construction contract law. Effective January 1, 2013.

 

Delaware – Home construction fraud is now considered either a class B, D, or G felony or a class A misdemeanor. Approved July 20, 2012.

 

Idaho – Any contract clause which limits the right to sue in Idaho or limits the time to bring suit is void. Enacted April 5, 2012.

 

Indiana – On public works contracts, claims of subcontractors and suppliers to retained funds are barred once the public agency has settled with the prime contractor. Effective July 1, 2012. Pay-if-paid clauses in subcontracts will be enforced. Court decision on May 11, 2012.

 

Iowa – Contracts for residential work must include a specific lien notice. Omitting the notice voids all lien rights of the prime contractor. Effective January 1, 2013.

 

Kentucky -- Owners have five days to cancel residential roofing repair contracts after any part of the insurance claim is denied. The right to cancel has to be disclosed in the contract. Work can’t start and no payment is allowed until the claim is settled. Effective July 12, 2012.

 

Louisiana – Owners have three days to cancel residential roofing repair contracts after any part of the insurance claim is denied. The right to cancel has to be disclosed in the contract. Effective August 1, 2012.

 

Massachusetts – No claim for extras on public works projects will be approved without prior notice to the comptroller. Effective January 1, 2013.

 

Nebraska -- Owners have three days to cancel contracts for repair of residential roofing after any part of the insurance claim is denied. Contractors can’t offer to rebate any part of the deductible. Effective July 19, 2012

 

North Carolina –Submitting a false statement of charges for home improvement work is a misdemeanor and grounds for license revocation or suspension. Effective January 1, 2013

 

Ohio – The limitation period for making contract claims is reduced from fifteen years to eight years. But claims for defective work under a construction contract retain a ten-year limitation. Effective Sept. 28, 2012.

 

South Dakota – Owners have three days to cancel contracts for repair of storm damage to residential roofing after any part of the insurance claim is denied. Contractors can’t offer to rebate any portion of the insurance deductible. Effective July 1, 2012.

 

How many of these changes are contractor-friendly? None, in my opinion. All make it harder to do business. But there’s an easy way to stay legal, no matter what changes come your way. Have a look at Construction Contract Writer. The trial version is free.