The Connecticut Home Improvement Act Has Harsh Penalties With Limited Exceptions

According to the Home Improvement Act (the “Act”), a home improvement contractor has no legal right to payment if his contract is not entered into by a registered salesman or contractor and does not contain:

  • the signatures of both the homeowner and contractor;
  • notice of the homeowner’s cancellation rights; and
  • a start date and a completion date.

Even if the homeowner testifies, under oath, that he requested the work, that the work was performed in a workmanlike manner, and he didn’t pay the amount he had agreed to pay, the contractor will still lose the lawsuit if the contract does not comply with the Act.  Like most laws, however, there are exceptions to this rule.

A contractor may be able to get paid if a court finds that the homeowner was acting in “bad faith.”  The Connecticut Appellate Court recently issued a decision that explains the limits of that exception.

In Lucien v. McCormick Construction, LLC, 122 Conn.App. 295 (Conn.App. 2010), the Connecticut Appellate Court refused to invoke the bad faith exception.  The facts were that the homeowner:

  • was represented by counsel; and
  • did not mention to contract deficiencies until after the work was performed.

The contractor argued that, because the homeowner had a lawyer, the homeowner knew or should have known what the law required.  The Appellate Court disagreed.

The Appellate Court further stated that the homeowner’s attorney could have drafted the home improvement defective contract and the contractor still may not be able to invoke the bad faith exception.  Bad faith requires fraud, deceit or the intend to mislead and not merely honest mistake.  Apparently, the homeowner’s attorney could draft a home improvement contract that does not comply with the Act and the homeowner could still assert the contract deficiencies as a defense to a contractor’s demand for payment.  The Appellate Court explained that, as long as the attorney was merely negligent in its contract preparation and did not intend to deceive, then the defense would still be available because negligence does not rise to the level of bad faith.

In light of the foregoing, Home Improvement Contractors should have their contracts prepared and/or reviewed by qualified legal counsel to make sure they receive payment for their work.

With a background in the construction industry that includes working for more than a decade as a project manager and estimator for a general contractor, partner Scott Orenstein is a seasoned commercial litigator whose practice focuses on construction claims. A licensed professional engineer in the State of Connecticut, Scott’s construction industry experience includes estimating, scheduling, buyout, submittal submissions, and change order negotiations for a wide variety of construction projects. He is also a registered patent attorney.

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