The Ohio Consumer Sales Practices Act (CSPA) sets out what specific business practices are legal and outlines the legal remedies possible when businesses break the law. For any home construction service contract involving the construction of a residential building, Ohio’s Home Construction Service Suppliers Act (HCSSA) will apply. In looking at both Acts, we can create a checklist of things to keep in mind when engaging a contractor to ensure your rights are protected:
- Initial Due Diligence – Before engaging with any contractor, you will want to search for the company on the Better Business Bureau’s website, check out any reviews, and check to see if the company is a legal entity in the State of Ohio through performing a business search on the Ohio Secretary of State’s website.
- Obtain a Written Estimate Prior to Commencement of Work – The estimate should provide estimates for both time and money, as well as an itemized breakdown of the costs of the project. According to the CSPA, you have the right to a written estimate if you request one. If you are comfortable with the estimate, sign off on it. Make sure it is clear that any adjustments to the estimate require your signature.
- Obtain a Written Agreement – Make sure you have a copy of all pages of the agreement and that it is signed and dated by both you and the contractor. The written agreement should:
- Include the hourly rates for any individuals performing the work and an itemized list of repairs and services being performed and rendered;
- Include the contractor’s EIN;
- Identify a general liability policy of insurance coverage;
- Require the contractor to provide receipts for any disbursements received from your insurance company (if applicable);
- For any projects covered by the HCSSA, provide notice of your right to a three-day notice of cancellation; and
- Set out terms for a refund of monies paid to the contractor if the work is unsatisfactory and terms for the termination of the parties’ agreement.
- During Construction – Once construction or repair work commences; you will want to continue to verify that everything is going according to plan. In order to do this, you can:
- Make sure you are keeping track of all items that are to be completed and their status throughout the project;
- Take pictures throughout the process;
- If permits were required, make sure they were properly pulled;
- For any warranties offered, obtain them in writing; and
- Require that the contractor receives your authorization prior to any additional repairs or services outside the initial agreement. The CSPA requires that where a consumer has requested an estimate, the contractor must obtain oral or written authorization from the consumer for any additional unforeseen, but necessary repairs or services when the cost of those repairs or services amounts to 10% or more of the original estimate. It is a violation of the CSPA to charge you for any repair or service that you did not authorize.
- End of Construction – Once construction is complete, you will want to document the last date worked. For residential projects, the contractor has sixty days from the date on which the last labor or work was performed to file a mechanic’s lien. For commercial projects, the contractor has seventy-five days to do so.
By following these simple tips, you can help protect yourself if something in your project or your agreement with your contractor goes awry.
Gertsburg Licata is a full-service, strategic growth advisory firm focusing on business transactions and litigation, M&A, and executive talent solutions for start-up and middle-market enterprises. It is also the home of CoverMySix®, a unique, anti-litigation audit developed specifically for growing and middle-market companies.
This article is for informational purposes only. It is merely intended to provide a very general overview of a certain area of the law. Nothing in this article is intended to create an attorney-client relationship or provide legal advice. You should not rely on anything in this article without first consulting with an attorney licensed to practice in your jurisdiction. If you have specific questions about your matter, please contact an attorney licensed to practice in your jurisdiction.
