Residential construction contracts valued at more than $25,000 for the repair, improvement, remodeling, or renovation of an existing residential structure are now covered by the Home Construction Service Suppliers Act (HCSSA), Chapter 4722, as amended by H.B. 50. Previously, the HCSSA applied only to new home construction over $25,000.
The significant shift: from CSPA to Chapter 4722
Since the legislature’s creation of Chapter 4722, which created a stand-alone framework for qualifying home construction service contracts, disputes over residential construction contracts for repair, improvement, remodeling, and renovation were evaluated under the CSPA. The CSPA can provide for triple damages, whereas the HCSSA does not, although a Court could award reasonable attorney’s fees under both. For construction contracts under $25,000 or where the contractor carries less than $250,000 of liability insurance, the CSPA will still apply, and contractors will remain subject to the potential for triple damages.
What Chapter 4722 covers
Chapter 4722 governs qualifying home construction service contracts for repair, improvement, remodeling, and renovation valued at $25,000 or more between a homeowner and a home construction service supplier. All residential construction contracts for repair, improvement, remodeling, and renovation valued at $25,000 or more must meet specific statutory requirements. Every contract under the HCSSA and over $25,0000 must:
- Include, among other things, a description of the work to be performed, the materials to be used, and the estimated total price;
- Include a disclosure of specific information from the contractor;
- Include a reference to a three-day right to cancel the contract;
- Refrain from including unfair contract terms;
- Notify the homeowner of specific rights.
The HCSSA also offers homeowners specific rights, such as rescission of the construction contract, restitution, repair, replacement, and other damages, which now includes construction contracts for repair, improvement, remodeling, and renovations.
2024 update: who counts as a “supplier” and what work is covered
House Bill 50 updated definitions and related provisions in Chapter 4722, including who does the work and what work is performed. If the construction contracts in use predate HB 50’s passage, contractors should ensure their contracts comply with the HCSSA.
Why the move matters
Moving residential construction contracts for repair, improvement, remodeling, and renovations out of the CSPA and into the HCSSA changes the governing remedies and compliance framework. For homeowners and contractors, the shift affects what the construction contracts must contain, how disputes are evaluated, which obligations apply before and during performance, and what damages are available to the non-breaching party.
Next Steps for Chapter 4722 Compliance
Homeowners and contractors planning residential construction projects, whether new construction or for the repair, improvement, remodeling, and renovations in contracts exceeding $25,000 and with contractors carrying over $250,000 in liability insurance, should make sure the construction contract complies with the HCSAA’s requirements.
Homeowners should consult CPM’s legal counsel prior to entering into any contract for the construction, repair, improvement, remodeling, or renovation of their residence. Contractors should consult legal counsel or any member of CPM’s Business Law and Litigation teams to ensure their construction contracts are compliant with the HCSSA’s requirements.
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