Does Your Residential Construction Contract Comply With Minnesota Law?

By Attorney Patrick Noaker, Construction & Remodeling Newsletter, February 1, 2015

Every contractor has learned that it is critical to have a written contract between your company and the homeowner.   This Newsletter is intended to discuss some Minnesota legal requirements regarding what should be in that written contract.

General Requirements

Construction Contract ImageUnder Minnesota law, licensed residential building contractors must have all agreements, including proposals, estimates, bids, quotations, contracts, purchase orders and change orders in writing. That written document must contain the date, a detailed summary of services to be performed, a description of the specific materials to be used or a list of standard features to be included, the total contract price or a description of the basis on which the price will be calculated, the name of the company, the name of the qualifying person and the license number. Minn. Stat. §§326B.809, 326B.87.

Pre-Lien Notice for Mechanic’s Lien

In order to preserve any mechanic’s lien rights, it is very important to include the pre-lien notice language in your written contract. Minnesota is very specific about the language that must be in your construction contract, or contained in a separate notice to the homeowner, to preserve your mechanic’s lien rights. See Minn. Stat. § 514.011 for the specific language.

Home Improvement Warranty

Minnesota statutes require that you include information about statutory warranties in your written contract.   In Minnesota, the warranty period for work involving major structural changes or additions to a residential building, is one year for defects in workmanship and materials and ten years for major construction defects. For the installation of plumbing, electrical, heating or cooling systems, the warranty period is two years. For everything else, the warranty period is one year. Minn. Stat. §§ 327A.02, 327A.08.

Performance Guidelines

A licensed contractor must provide a prospective customer with written performance guidelines for the services to be performed. Those performance guidelines must be incorporated into the written contract. These performance guidelines can be found through Minnesota building industry trade groups like NARI (NARIMN.org) and the Builders Association of Minnesota (BAMN.org). Minn. Stat. § 326B.809.

Home Solicitation Right of Cancellation

In a home solicitation sale, at the time the sale occurs, the seller/contractor must include a notice of the right to cancel the contract in the written contract. The seller/contractor must also attach a form that allows the homeowner to cancel the contract within three days of the day the contract was signed. Generally, a home solicitation sale means the sale of repair or improvements to real estate occurring outside the contractor’s place of business. There are a number of exceptions to this definition; however; as my dad used to say, “it is better to be safe than sorry.” Include the notice of right of cancellation and the required cancellation form in your form construction contract. Minn. Stat. § 325G.08.

Residential Roofing Contract

A residential roofing or siding contractor who will be paid from the proceeds of a property or casualty insurance policy must provide notice that the insured has the right to cancel the contract within 72 hours after being notified that the insurer has denied the insured’s claim. Minn. Stat. §326B.811.

Make sure and review your current construction contract and if it is missing any of these provisions, or if you think it might be time to have an attorney review your contract, contact Patrick Noaker at (612) 839-1080 or Patrick@noakerlaw.com.

About the Writer:

Patrick Noaker is an attorney with the Noaker Law Firm LLC who aggressively represents construction contractors and remodelers in the courtroom, mediation and arbitration. Patrick has presented cases to judges, juries, arbitrators and mediators across the U.S. for the past 23 years. Patrick can be reached at his office: 333 Washington Avenue N. # 300, Minneapolis, Minnesota 55401, (612) 839-1080, patrick@noakerlaw.com.

 

 

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