A home improvement contract is a contract for work and materials used for the construction of new improvements, the repair or renovation of existing improvements or both. It must be in writing. A sample form of Builders and Mechanics Lien Contract is located at the end of this Chapter.
The distinction between work and materials for existing improvements and new improvements is important. A contract for the repair and renovation of existing improvements is subject to more requirements including spousal consent, a five day waiting period, a three day right of recession and a closing location.
The contract must be for work and materials. Material alone is not improvements. Material must be used in constructing new improvements or repairing or renovating existing improvements. Material used to construct new improvements becomes a part of the new improvements once physically attached (i.e., permanently attach, affix, add to, or fasten onto) to the new improvements. Likewise, material used to repair or renovate existing improvements becomes a part of the existing improvements once physically attached to the existing improvements.
The Texas Property Code [TPC § 41.007] requires a contract for work and materials to contain the following warning conspicuously printed, stamped, or typed in a size equal to at least 10-point bold type or computer equivalent, next to the owner’s signature line on the contract:
“IMPORTANT NOTICE: You and your contractor are responsible for meeting the terms and conditions of this contract. If you sign this contract and you fail to meet the terms and conditions of this contract, you may lose your legal ownership rights in your home. KNOW YOUR RIGHTS AND DUTIES UNDER THE LAW.”
Failure to provide the notice is actionable under the Texas Deceptive Trade Practices Act. The form Builder’s and Mechanic’s Lien Contract located at the end of this Chapter contains this notice.