§444-25.5  Disclosure; contracts.  (a) 
Prior to entering into a contract with a homeowner involving home construction
or improvements and prior to the application for a building permit, licensed
contractors shall:



(1)  Explain verbally in detail to the homeowner all
lien rights of all parties performing under the contract including the
homeowner, the contractor, any subcontractor or any materialman supplying
commodities or labor on the project;



(2)  Explain verbally in detail the homeowner's option
to demand bonding on the project, how the bond would protect the homeowner and
the approximate expense of the bond; and



(3)  Disclose all information pertaining to the
contract and its performance and any other relevant information that the board
may require by rule.



(b)  All licensed contractors performing home
construction or improvements shall provide a written contract to the
homeowner.  The written contract shall:



(1)  Contain the information provided in subsection
(a) and any other relevant information that the board may require by rule;



(2)  Contain notice of the contractor's right to
resolve alleged construction defects prior to commencing any litigation in
accordance with section 672E-11;



(3)  Be signed by the contractor and the homeowner;
and



(4)  Be executed prior to the performance of any home
construction or improvement.



(c)  For the purpose of this section,
"homeowner" means the owner or lessee of residential real property,
including owners or lessees of condominium or cooperative units.



(d)  Any violation of this section shall be
deemed an unfair or deceptive practice and shall be subject to provisions of
chapter 480, as well as the provisions of this chapter. [L 1975, c 183, §4; am
L 1984, c 95, §8; am L 1989, c 306, §1; am L 1995, c 20, §7; am L 2004, c 119,
§3]



 



Case Notes



 



  Where plaintiff did not provide to homeowners the lien
disclosure notices before or upon signing of the contract or prior to the
commencement of the work as required by subsection (a), plaintiff's conduct was
an unfair or deceptive practice that rendered its contract void and
unenforceable at law or in equity under §480-12; thus, plaintiff was not
entitled to a lien upon homeowners' property under §507-42, and trial court did
not err in dismissing its lien application.  111 H. 349, 141 P.3d 996.



  As §480-12 voided the contract between homeowner and
contractor, §§507-42 and 480-12 precluded the imposition of a §507-42 lien upon
the homeowner's property by contractor who failed to comply with the
requirements of this section.  96 H. 365 (App.), 31 P.3d 222.



  In light of the purpose of this section and the specific
duties it explicitly imposes on "any licensed contractor entering into a
contract involving home improvements", the law does not permit a homeowner
to waive his or her rights specified therein.  96 H. 365 (App.), 31 P.3d 222.



  Subsection (d) and §480-12 do not preclude some recovery in
quantum meruit from a homeowner by a contractor who fails to comply with the
requirements of this section; the amount cannot exceed the amount that would
have been due the general contractor under the contract had the contract not
been void, less the amount previously paid the contractor and the total of the
amount paid and owed to all subcontractors and materialmen.  96 H. 365 (App.),
31 P.3d 222.



  Pursuant to §444-2(7), homeowners did not have the benefit
of, and, as to homeowners, contractor was not obligated to comply with, the
disclosure provisions of this section.  109 H. 96 (App.), 123 P.3d 691.