Well, they've gone and done it again...

Our wonderful lawmakers have made LOTS of changes to various codes, such as the Business and Professions Codes and the Civil Codes, and these changes will require that you have a brand new construction contract drawn up, or at the very least to have some serious additions made to your current contract(s).

Several code sections are going to be repealed effective January 1 2006 and many others will be going into effect on the same day. Many of these changes directly affect your contract(s).

If your 2006 construction contracts don't contain the newly required notices and other items then you can be subject to disciplinary action by the license board! Happy New Year, eh? ;)

But wait! It gets even better! Some of the new wording that's supposed to go into effect Jan 1 2006 has already been repealed and/or changed itself!

Minimum Size Type Now Required

All text on the contract MUST be a minimum 10-point typesize and all headings must be a minimum 10-point typesize BOLD. This minimum text size is required UNLESS a different size (read "larger" size) is otherwise specified.

Some contractors use small type on their contract because it helps to keep down the number of pages in the contract. An unfortunate other reason for small type is to "help" the customer to "miss" the information while reviewing the contract.

No matter the reason for small type though, it's now no longer allowed. This will cause the overall size of contracts to grow.

Mechanic's Lien Notice to Owner

The 2005 B&P code required a mechanic's lien notice and it allowed the notice to be an attachment to the contract.

However, this will be repealed Jan 1 2006 and the new B&P Code that goes into effect Jan 1 2006 requires that a) the text of the mechanic's lien notice be revised and b) the text MUST appear directly on the contract and NOT as an attachment and c) as in the past, it MUST be verbatim to the text in the "new" code.

This is a significant notice, no less than XXX words, and it will take up a sizeable amount of space on your contract, probably causing you to have to add another page.

Newly Required 2006 Notices Already Revised, Again and Again!

Interesting thing here, and this is where it can get really confusing...

As mentioned above, the new 2006 code that was supposed to replace the 2005 code has already gone through several changes.

The mechanic's lien notice had its wording changed, and the new requirement that it be added to the contract was added, but then the new code was repealed and replaced with even more new code.

That newest new code left out the new mechanic's lien notice requirement.

But alas "they" weren't done there... that newest new code that left out the mechanic's lien notice requirement has already been repealed itself and now there's even newer newest code (and it has the mechanic's lien requirement back in it)!

AND, on top of everything...

The code listed at the government legislative website as being effective Jan 1 2006 is NOT accurate!

The text has been changed and changed again and what's posted at the government legislative website does NOT contain the latest updates.

It's absolutely ridiculous, how do "they" expect a contractor to have a legal contract when "they" can't even get it straight themselves?

Description of License Classification Now Required

Another new code requires the contract to contain the name, business address, license number of the contractor and the DESCRIPTION of the license classification relevant to the project.

Presumably this requirement is to help the customer to know whether or not the contractor bidding/contracting to do the work is actually licensed to do that specific work.

Workers Comp Insurance Notice Now Required

Another new code requires that you notify your customer concerning BOTH general liability insurance AND Worker's Comp insurance. You're required to state whether or not you have these insurances and the insurer's contact info if you do have the insurance.

It used to be that it was just general liability insurance that you had to do this for but now it has to be done for worker's comp insurance as well.

New Headings Now Required

Another new code requires the addition of several headings and, as mentioned above, these headings must be no less than 10-point size type and they must be bold.

Here's a partial list:

• The contract price now has to have a heading "Contract Price".
• If there'll be a finance charge then there's a heading required "Finance Charge".
• The heading "Description of the Project and Description of the Significant Materials to be Used and Equipment to be Installed" is now required.
• If there's a downpayment required then the heading "Downpayment" is required, along with another notice in 12-point typeface BOLD written verbatim to the code.
• If there'll be progress payments, the heading "Schedule of Progress Payments" is now required, along with specific text in 12-point typeface BOLD written verbatim to the code
• The headings "Approximate Start Date" and "Approximate Completion Date" are now required
• If applicable, the heading "List of Documents to be Incorporated into the Contract"
• A new heading "Note about Extra Work and Change Orders" along with specific text written verbatim to the code.
• A new statement must be added to the contract, exactly as written in the code, in minimum 12-point typesize BOLD, that tells the customer that he is entitled to a completely filled in copy of the agreement.

The above items are just a partial list of required changes and who knows how many times the codes will change again (and again)...

A New 2006 Sample Contract

I'm putting the finishing touches on a sample contract for 2006, actually several different versions for the various differing requirements.

As with all of our forms, when you purchase this sample contract you'll be entitled to free updates forever.

Seeing's how often the legislature changes the code, free updates is one heck of a good deal!

Jump online and pick up your copy of our 2005 sample contract today and you'll be entitled to the 2006 contract once it's complete. :)

And then no matter how many times "they" change the codes and require changes to your 2006 contract, you'll be entitled to a free copy of each and every updated version that we make available.

Why buy it now instead of in 2006? Because if you do it before the end of 2005, then you'll be able to write it off on your 2005 taxes!

This construction contract package is only $59.95 but hey, every little write-off helps, right? ;)