PENALTIES FOR VIOLATION OF THE HOME IMPROVEMENT CODE
By Attorney Randall J. Andersen
March, 2015
By Attorney Randall J. Andersen
March, 2015
Disclaimer: The information contained on this page is not legal advice. The information provided on this website is for general informational purposes and is not necessarily updated to account for changes in the law. You should consult with an attorney for legal advice regarding your individual circumstances.
The Wisconsin Court of Appeals issued a decision on February 12, 2015 which demonstrates the potential dangers to contractors who do not follow the requirements of the Wisconsin Home Improvement Code.
In the case of Masterclean, Inc. d/b/a Purofirst of Milwaukee, v. Butler, Appeal No. 2014AP564, homeowners hired a contractor to perform construction services for their home which had been damaged by a fire. The relationship apparently deteriorated after the homeowners became dissatisfied with the contractor’s completion of punch list items. A lawsuit was filed and the case was tried to a jury. During the course of the trial, the homeowners amended their complaint to include claims for the failure of the contractor to provide a written contract meeting the requirements of the Wisconsin Home Improvement Code.
The jury awarded damages to the homeowners in the amount of $29,407.37. The jury also found that the contractor had violated the Home Improvement Code by failing to put all contractual terms and conditions in writing. The trial judge determined that because the contractor had violated the Wisconsin Home Improvement Code by failing to provide a written contract, the homeowners were entitled to double damages (i.e. two times the $29,407.37 awarded by the jury). The trial judge also directed that the contractor pay the homeowners’ actual attorneys’ fees incurred in the lawsuit.
The Home Improvement Code applies to any remodeling, altering, repairing or modernizing of a residential or noncommercial structure (but it does not apply to new home construction). A home improvement contract (and all changes to that contract) must be in writing if the customer is required to make any payment before the contractor completes the work, or if the contractor initiates the contract by either a face-to-face solicitation away from the contractor’s regular place of business, or by mail or telephone solicitation, or by a handbill or circular left at a residence.
If a written contract is required (or if the contractor otherwise requests that the customer sign a written contract) it must contain all of the following information:
* The contractor’s name and address, and the name and address of the contractor’s sales representative or agent.
* A description of the work to be done and the principal materials to be used. If the contractor promises to install specific products or materials, the contract must clearly describe those products or materials.
* The total price, including finance charges. If the contract is for time and materials, it must clearly disclose the hourly labor charge.
* The dates by which, or the time period within which, the contractor will begin and complete the work.
* A description of any mortgage or security interest created in connection with the sale or financing of the home improvement.
* All warranties that the contractor makes for labor, services, products or materials furnished in connection with the home improvement.
* A description of every document incorporated in the home improvement contract.
* Insurance coverage included in the home improvement contract, if any.
Additional provisions in the Home Improvement Code require the contractor to provide the customer with a written notice advising that the customer has a right to receive lien waivers. The Code also requires that the contractor inform the customer of all building and construction permit requirements, and the contractor must refrain from starting work until the permits have been issued. In some cases, such as when the contractor initiates the contract by face-to-face solicitation away from the contractor’s regular place of business or by mail or telephone solicitation directed to the customer, the contractor must also give a written notice advising that the customer has a three day right to cancel.
The contractor in the Masterclean v. Butler case did receive some relief in the Court of Appeals. The Court concluded that because there was no evidence that the homeowners’ damages were caused or related to the failure of the contractor to provide a written contract, the homeowner was not entitled to double damages and actual attorneys’ fees under the Home Improvement Code. However, other contractors who face claims for violation of the Home Improvement Code may not be as fortunate.
Any electrical contractor who performs work for residential customers should familiarize itself with the requirements of the Wisconsin Home Improvement Code (ATCP 110) and the three day right to cancel requirements (Chapter 423, Wisconsin Statutes). The Code contains various provisions which go beyond those mentioned above.
In the case of Masterclean, Inc. d/b/a Purofirst of Milwaukee, v. Butler, Appeal No. 2014AP564, homeowners hired a contractor to perform construction services for their home which had been damaged by a fire. The relationship apparently deteriorated after the homeowners became dissatisfied with the contractor’s completion of punch list items. A lawsuit was filed and the case was tried to a jury. During the course of the trial, the homeowners amended their complaint to include claims for the failure of the contractor to provide a written contract meeting the requirements of the Wisconsin Home Improvement Code.
The jury awarded damages to the homeowners in the amount of $29,407.37. The jury also found that the contractor had violated the Home Improvement Code by failing to put all contractual terms and conditions in writing. The trial judge determined that because the contractor had violated the Wisconsin Home Improvement Code by failing to provide a written contract, the homeowners were entitled to double damages (i.e. two times the $29,407.37 awarded by the jury). The trial judge also directed that the contractor pay the homeowners’ actual attorneys’ fees incurred in the lawsuit.
The Home Improvement Code applies to any remodeling, altering, repairing or modernizing of a residential or noncommercial structure (but it does not apply to new home construction). A home improvement contract (and all changes to that contract) must be in writing if the customer is required to make any payment before the contractor completes the work, or if the contractor initiates the contract by either a face-to-face solicitation away from the contractor’s regular place of business, or by mail or telephone solicitation, or by a handbill or circular left at a residence.
If a written contract is required (or if the contractor otherwise requests that the customer sign a written contract) it must contain all of the following information:
* The contractor’s name and address, and the name and address of the contractor’s sales representative or agent.
* A description of the work to be done and the principal materials to be used. If the contractor promises to install specific products or materials, the contract must clearly describe those products or materials.
* The total price, including finance charges. If the contract is for time and materials, it must clearly disclose the hourly labor charge.
* The dates by which, or the time period within which, the contractor will begin and complete the work.
* A description of any mortgage or security interest created in connection with the sale or financing of the home improvement.
* All warranties that the contractor makes for labor, services, products or materials furnished in connection with the home improvement.
* A description of every document incorporated in the home improvement contract.
* Insurance coverage included in the home improvement contract, if any.
Additional provisions in the Home Improvement Code require the contractor to provide the customer with a written notice advising that the customer has a right to receive lien waivers. The Code also requires that the contractor inform the customer of all building and construction permit requirements, and the contractor must refrain from starting work until the permits have been issued. In some cases, such as when the contractor initiates the contract by face-to-face solicitation away from the contractor’s regular place of business or by mail or telephone solicitation directed to the customer, the contractor must also give a written notice advising that the customer has a three day right to cancel.
The contractor in the Masterclean v. Butler case did receive some relief in the Court of Appeals. The Court concluded that because there was no evidence that the homeowners’ damages were caused or related to the failure of the contractor to provide a written contract, the homeowner was not entitled to double damages and actual attorneys’ fees under the Home Improvement Code. However, other contractors who face claims for violation of the Home Improvement Code may not be as fortunate.
Any electrical contractor who performs work for residential customers should familiarize itself with the requirements of the Wisconsin Home Improvement Code (ATCP 110) and the three day right to cancel requirements (Chapter 423, Wisconsin Statutes). The Code contains various provisions which go beyond those mentioned above.