If you’re planning a home improvement project in Colorado, it’s important to understand the specific contract requirements that both homeowners and contractors must follow. These rules are in place to protect both parties and ensure that expectations are clear from the outset. Here’s a summary of the key components that must be included in a residential home improvement contract in Colorado.
1. Written Agreement
The contract must always be in writing. This ensures that both the homeowner and the contractor have a clear understanding of the work to be done, the costs involved, and the timeline for the project.
2. Description of Work
The contract must provide a detailed description of the work that will be completed. This helps prevent misunderstandings about the scope of the project and what exactly is included.
3. Agreed Price
The price for the work must be clearly stated in the contract. This ensures that both parties know how much the project will cost, including any materials, labor, or additional charges.
4. Start and Completion Dates
The contract must specify the start date of the project and the estimated date of completion. This timeline sets expectations for when the work will begin and when it should be finished.
5. Deposit Refund Clause
A key requirement in Colorado contracts is a provision that states if the contractor fails to begin the work within fifteen days after the agreed start date, the homeowner has the right to receive a full refund of any deposit paid. This refund must be issued within three days after the homeowner requests it, either orally or in writing.
6. Change or Addendum to the Contract
Any changes to the contract—whether it’s an adjustment to the price, scope of work, or timeline—must be documented in writing. Both the homeowner and the contractor must sign and date any amendments or addendums.
7. Permit Responsibility
The contract must clearly indicate who is responsible for obtaining any necessary permits. This could either be the homeowner or the contractor, depending on the nature of the work and local government regulations.
8. Contractor Information
The contract must include the contractor’s actual physical address, business name (if applicable), and a current telephone number. Note that a post office box or a mailbox address will not suffice for this requirement. This ensures that the homeowner can contact the contractor if needed.
9. Signatures of Both Parties
The contract must be signed by both the homeowner and the contractor. This indicates that both parties have agreed to the terms outlined in the document.
10. Date Signed
Both parties must also date the contract at the time of signing. This ensures that the timeline for cancellation rights and other terms is clear.
11. Warranty Terms
The contract must specify the warranty terms for the work being completed. This helps homeowners understand the level of protection they have in case something goes wrong with the project after completion.
12. Cancellation Rights
Colorado law mandates that homeowners have the right to cancel a home improvement contract for any reason within three days after signing, as long as work hasn’t already begun. This right must be clearly stated in the contract in bold, capital letters, and at least twelve-point font size. The homeowner can cancel by sending a notice by certified mail to the contractor, and the contractor must refund any money received within three days after receiving the cancellation notice. This provision ensures homeowners have a clear exit strategy if they change their mind after signing the contract.
Cancellation Notice Example:
“THE HOMEOWNER HAS THE RIGHT TO CANCEL THIS CONTRACT FOR ANY REASON AT ANY TIME WITHIN THREE DAYS AFTER THE SIGNING OF THE CONTRACT, UNLESS WORK HAS COMMENCED. NOTICE OF CANCELLATION MUST BE GIVEN BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE HOME IMPROVEMENT CONTRACTOR. IT SHALL BE DEEMED COMPLIANCE WITH THE THREE-DAY CANCELLATION PERIOD IF THE NOTICE TO CANCEL IS MAILED WITHIN THREE DAYS AFTER THE CONTRACT SIGNING, EXCLUDING SUNDAYS AND HOLIDAYS. WITHIN THREE DAYS AFTER RECEIPT OF THE WRITTEN NOTICE OF CANCELLATION, THE CONTRACTOR SHALL REFUND ALL MONEYS RECEIVED FROM THE HOMEOWNER.”
Why Do These Requirements Matter?
These contract requirements are designed to protect homeowners and ensure transparency and accountability in the home improvement process. Whether you’re hiring a contractor to renovate your kitchen, build an addition, or perform any other type of home improvement, having a clear, written agreement can help prevent disputes and misunderstandings down the line.
For contractors, following these guidelines can help establish trust with homeowners and ensure compliance with state law. And for homeowners, it provides peace of mind knowing that your rights are protected if something goes wrong.
Before signing any contract, whether you’re a homeowner or contractor, make sure all of the necessary components are in place. If you’re unsure about any aspect of the contract or the work being performed, it’s always a good idea to consult with a legal professional.
By following these straightforward guidelines, both homeowners and contractors can ensure that home improvement projects in Colorado are carried out smoothly, efficiently, and with proper legal protections for everyone involved.
