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Patrick, Esq.
Patrick, Esq., Lawyer
Category: California Employment Law
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Experience:  Significant experience in all areas of employment law.
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the law states that a contractor can not take any more then

Resolved Question:

the law states that a contractor can not take any more then 10% or $1000 or which ever is less. however i build custom cabinets do i fall under the same restrictions? Is there a "special order" prevision in my case?
Submitted: 2 years ago.
Category: California Employment Law
Expert:  Patrick, Esq. replied 2 years ago.
Hello and thank you for entrusting me to answer your question.

Do you install these cabinets into people's homes, or do you build them for purchase?

I very much look forward to assisting you regarding this matter.
Customer: replied 2 years ago.


any luck? finding the code?

Expert:  Patrick, Esq. replied 2 years ago.
Michael,

Thanks for your reply. I am knowledgeable with regard to the relevant laws, but in order to provide you with the most tailored and direct answer to your question, I had asked whether you install these cabinets into people's homes, or you build them for purchase.

Would you be so kind as to clarify that for me, and then I can provide my answer.

Again, I very much look forward to helping you.
Customer: replied 2 years ago.


yes I install all of my custom cabinets

Expert:  Patrick, Esq. replied 2 years ago.
Okay, thank you very much for clarifying.

The relevant law here is Business and Professions Code section 7159.5, which states in relevant part as follows:

"This section applies to all home improvement contracts, as defined in Section 7151.2, between an owner or tenant and a contractor, whether a general contractor or a specialty contractor, that is licensed or subject to be licensed pursuant to this chapter with regard to the transaction.

(a) Failure by the licensee or a person subject to be licensed under this chapter, or by his or her agent or salesperson, to comply with the following provisions is cause for discipline:

....(3) If a downpayment will be charged, the downpayment may not exceed one thousand dollars ($1,000) or 10 percent of the contract amount, whichever is less."

As noted in bold above, the "$1,000 or 10% rule" applies only to "home improvement contracts." B & P 7151.2 defines home improvement contracts as follows:

"Home improvement contract" means an agreement, whether oral or written, or contained in one or more documents, between a contractor and an owner or between a contractor and a tenant, regardless of the number of residence or dwelling units contained in the building in which the tenant resides, if the work is to be performed in, to, or upon the residence or dwelling unit of the tenant, for the performance of a home improvement as defined in Section 7151, and includes all labor, services, and materials to be furnished and performed thereunder."

Section 7151 defines "home improvement" as follows:

"'Home improvement' means the repairing, remodeling, altering, converting, or modernizing of, or adding to, residential property and shall include, but not be limited to, the construction, erection, replacement, or improvement of driveways, swimming pools, including spas and hot tubs, terraces, patios, awnings, storm windows, landscaping, fences, porches, garages, fallout shelters, basements, and other improvements of the structures or land which is adjacent to a dwelling house. "Home improvement" shall also mean the installation of home improvement goods or the furnishing of home improvement services."

So, let's put this all together. The "$1,000 or 10% rule" applies to "home improvement contracts," which are defined as any agreements in which "home improvements" are to be made. "Home improvements" mean repairing, remodeling, altering, converting, or modernizing of, or adding to, residential property.

Since the installation of cabinets would fall within the definition of home improvements, such work would fall under the "$1,000 or 10% rule."

I sincerely XXXXX XXXXX this information helps you and I wish you the best.

If you do not have any further concerns, I would be very grateful if you would give my answer a positive rating and click submit, as this is the only way I will receive credit for assisting you. If you have any additional concerns that you would like me to address, please feel free to let me know by hitting the REPLY or CONTINUE CONVERSATION button and I will be more than happy to continue assisting you.

Finally, please bear in mind that none of the above constitutes legal advice nor is any attorney client relationship created between us.

Thank you and very kindest regards.
Patrick, Esq., Lawyer
Satisfied Customers: 7530
Experience: Significant experience in all areas of employment law.
Patrick, Esq. and other California Employment Law Specialists are ready to help you
Customer: replied 2 years ago.

yet home depot takes 100% for any special orders such as the granite tops. The cabinets are not custom they are stock cabinets. how can they get away with this? Is there any verbage on "special oders" in the code? I have seen it, however could not find it. These cabinets are made to the owners specs.

Expert:  Patrick, Esq. replied 2 years ago.

I would imagine this is because they are not installing the materials, and thus are not entering into service contracts for home improvement.

The way the rules operate, if you SELL someone a cabinet for them to install themselves, the $1,000 or 10% rule will not apply because you are not providing a home improvement service.

However, if you sell the cabinets in connection with installation, the entire transaction becomes subject to the rule. The law is clear that "home improvement contract" includes "all labor, services, and materials to be furnished and performed thereunder." (B & P § 7151.2)

Again, I sincerely XXXXX XXXXX this information helps you and I wish you the best. If I have answered your question, I would be very grateful for a positive rating of my service so that I may receive credit for assisting you.

Kindest regards.

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Patrick, Esq.
Patrick, Esq.
California Employment Lawyer
7530 Satisfied Customers
Significant experience in all areas of employment law.