Indiana’s Home Improvement Contract Act
Indiana home improvement contractors operate under a strict statutory framework known as the Indiana Home Improvement Contract Act (“HICA”). HICA imposes specific requirements on contracts for residential home improvements and is designed to protect homeowners who may lack familiarity with the home improvement industry.
When does HICA apply?
HICA applies to contracts exceeding $150 for the improvement of residential property, i.e., a house, and includes the fixtures, structures, and improvements of that residential property including electrical, plumbing, mechanical, and exterior work. HICA does not apply to the original construction of a dwelling but instead applies only to “home improvements.”
Required contract terms
- Name of the consumer and address of the real property.
- Name, address, and email address of the contractor.
- Name, telephone number, and email address of each owner, officer, employee, or agent of the contractor.
- Date the contract was submitted to the consumer and any time limit for acceptance.
- A reasonably detailed description of the work, or in the alternative, a statement that the specifications will be provided and that the consumer must sign and date an approval of the specifications before any work begins.
- Approximate start and completion dates along with any contingencies that could affect the timing.
- Contract price.
- A statement whether other party/subcontractor will be completing the home improvements or furnishing any labor, services, material, equipment, or machinery.
- Signature lines for the contractor or contractor’s agent and for each consumer who is a party to the contract, with each person’s name typed or printed legibly below the signature line.
Contractors are prohibited from advertising or offering to pay or rebate any portion of an insurance deductible to induce a contract.1
Cancellation Rights
HICA gives homeowners the right to cancel a home improvement contract within three business days after signing by delivering written notice to the contractor. Upon cancellation, the contractor must refund all monies paid, except for payment for work already performed. Contractors must also provide the homeowner with written notice of these cancellation rights and a cancellation form.
Contract Modifications
A common issue that arises under HICA involves modifications to the contract (called “change orders”). HICA requires that change orders be in writing and signed by the homeowner. If the change order is not signed by the homeowner, the change order is not enforceable under HICA.
Consequences of Noncompliance
Homeowners can assert claims or counterclaims alleging HICA violations. Further, a HICA violation constitutes a “deceptive act” under Indiana’s Deceptive Consumer Sales Act, potentially exposing contractors to actual damages, attorney’s fees, and increased difficulty collecting payment.
Ind.Code. § 2451110.5(c).
Travis R. Watson is an attorney who represents contractors in construction disputes, including HICA cases. This article provides general information only and is not legal advice. For more information or for a consultation about a specific issue, you may email Travis at twatson@rbelaw.com.
