Legal Obligations Of Your General Contractor

General Contractor: Obligations
Idaho Code requires general contractors to provide certain disclosures to a homeowner or residential real property purchaser (“Homeowner”). The required disclosures include:
(a) The homeowner or residential real property purchaser shall have the right at the reasonable expense of the homeowner or residential real property purchaser to require that the general contractor obtain lien waivers from any subcontractors providing services or materials to the general contractor;
(b) The homeowner or residential real property purchaser shall have the right to receive from the general contractor proof that the general contractor has a general liability insurance policy including completed operations in effect and proof that the general contractor has worker’s compensation insurance for his employees as required by Idaho law;
(c) The homeowner or residential real property purchaser shall be informed of the opportunity to purchase an extended policy of title insurance covering certain unfiled or unrecorded liens; and
(d) The homeowner or residential real property purchaser shall have the right to require, at the homeowner’s or residential real property purchaser’s expense, a surety bond in an amount up to the value of the construction project.

Idaho Code § 45-525(2). An additional requirement for general contractor is to provide the Homeowner with a list of “all subcontractors, materialmen, and rental equipment providers who have a contractual relationship with the general contractor and who supplied materials or performed work on the [property] in an amount exceeding $500.00. Idaho Code § 45-525(3)(a).
To show that these disclosures were made, a general contractor must obtain and keep a signed acknowledgement of receipt by the Homeowner. A copy of such receipt is to be given to the Homeowner as well.

Generally, only general contractors are required by law to provide these disclosures. This requires addressing the million-dollar question, what is a general contractor? By law, a general contractor is anyone who makes a contract exceeding $2,000.00 dollars with:
(i) A homeowner or prospective residential real property purchaser for the construction, alteration or repair of residential real property; or
(ii) A prospective residential real property purchaser for the purchase and sale of newly constructed property.
Idaho Code § 45-525(5)(a). A basic analysis of this definition will help you determine whether you are a general contractor by law and whether the requirement to provide the disclosures is applicable.

Assuming you fit the definition of a general contractor, what happens if you failed to comply with the law? Any general contractor that has failed to provide the required disclosures has committed an unlawful and deceptive act under the Idaho Consumer Protection Act (“ICPA”). Idaho Code § 45-525(4).

So, what does this mean for you?
The ICPA provides the Homeowner a private cause action against the general contractor if such party has suffered “an ascertainable loss of money or property, real or personal, as a result of [the unlawful and deceptive act].” Idaho Code § 48-608. This private cause of action allows the Homeowner to void the contract (and seek restitution) or recover monetary relief in an amount no less than $1,000.00. Id. at 48-608(1). However, the “ascertainable loss” suffered by the party must be a “result” of the unlawful and deceptive act.

Whether you are a contractor or a homeowner, please contact our office for help with any real estate law questions, obligations, liabilities, and/or rights.