Important Changes to Indiana’s Home Improvement Contracts Act that Affect Contractors
The importance of Indiana’s Home Improvement Contracts Act (“HICA”) is not widely known to contractors who perform work on residential homes. However, a contractor’s failure to abide by HICA could render a contract unenforceable leaving the contractor unpaid and even responsible for attorney’s fees and triple damages incurred by the consumer. Recently, HICA has been updated to impose additional requirements on what contractors must include in their contracts.
The purpose of HICA is to protect consumers by placing specific minimum requirements on the contents of a contract involving labor or materials provided to a residential home. For example, the contract must include:
- The location where the work will be performed;
- The parties involved;
- A detailed description of the work;
- The starting and completion dates and potential contingencies that could affect either;
- Whether the work is to be paid by insurance; and
- A specific advisement of the homeowner’s right to cancel the contract.
Recently, HICA was amended to include additional requirements for contracts, including:
- Whether any third party (a subcontractor or vendor) will provide any labor or materials for the work;
- E-mail addresses used by the contractor;
- A specific advisement that neither the contractor nor any third party may initiate a claim against the homeowner’s insurance company; and
- A “notice of cancellation” with specific language informing the consumer of his right to cancel the contract and that is attached to the original contract but easily detachable.
Please understand that the foregoing is only some of the requirements under HICA, and a contractor is responsible for ensuring full compliance. Any violation of HICA could be considered a “deceptive act” and may cause the contractor to lose out on any amount that is owed by the consumer or even subject the contractor to criminal prosecution.
For more information on methods contractors can use to protect their business, please contact Cliff Whitehead at email@example.com or (812) 424-7575.