Ohio home improvement contract requirements

Which Ohio law applies

Home solicitation sales

A home solicitation sale is one you solicit in person at the buyer's home, even when they invited you, with the agreement given there, or one signed anywhere other than your place of business. The exclusions matter for contractors. Ohio's act doesn't apply when the buyer contacted you to negotiate a purchase and you have a fixed business location in Ohio where you regularly offer those services (your advertising doesn't count as you initiating), when the final deal follows negotiations at your showroom, or in a bona fide emergency where the buyer gives you a handwritten, signed waiver. The FTC Cooling-Off Rule has no exclusion for buyer-initiated contact, so a home sale outside Ohio's act can still need the federal notice.

When the act applies, the written agreement must be in the language of your sales pitch, show your name and address and the date the buyer actually signs, and you leave the buyer a copy you've signed. Near the buyer's signature, in at least 10-point bold:

• The notice of cancellation form, in duplicate, easily detachable, in 10-point bold, completed with your name, your address, email address or fax number, the transaction date and the cancellation deadline. Using the FTC's form complies if it gives the buyer at least as much information.
• Cancellation by email counts. The buyer can cancel by certified mail, personal delivery, fax or email to the contact details in the agreement, and an emailed notice is effective when sent.
• No work during the three days. Where the sale requires you to provide services, you may not start them while the buyer can still cancel (R.C. 1345.22(B)). Home security systems have a narrow exception.

Failing any of these is a deceptive act under the Consumer Sales Practices Act (R.C. 1345.28). The buyer can rescind or recover actual economic damages plus up to $5,000 in noneconomic damages, and treble damages or $200, whichever is greater, where the practice was already declared deceptive by rule or court decision.

Contracts of $25,000 or more

Chapter 4722 applies to a supplier who carries at least $250,000 of general liability insurance and contracts with an owner for a home construction service: building a one-, two- or three-family dwelling, or repairing, improving, remodeling or renovating one. No home construction service of $25,000 or more may be performed without a written contract that includes:

1. Your name, physical business address, business phone number and taxpayer identification number.
2. The owner's name, address and phone number.
3. The address of the property.
4. A general description of the work, including the goods and services furnished.
5. The anticipated start and completion dates or periods.
6. The total estimated cost.
7. Any installation, delivery or other cost the estimate doesn't cover.
8. A copy of your insurance certificate showing general liability coverage of at least $250,000.
9. The dated signatures of the owner and you.

Unless the price is firm, the contract must also contain the statutory "EXCESS COSTS" statement and let the owner initial a choice of written or oral estimate. When unforeseen but necessary extra costs pass $5,000 over the life of the contract, you give that estimate before doing the related work, and you can't charge for excess costs the owner didn't approve.

• Down payment cap. Before your performance begins you may take no more than 10 percent of the contract price, plus up to 75 percent of the cost of special order items that can't be returned or reused (R.C. 4722.04). Construction loan draws are allowed.
• Cost-plus is different. Cost-plus contracts are exempt from the contract list, the excess-cost rules and the down payment cap.
• Other duties. Work in a workmanlike manner, refund for goods or services you didn't deliver, give the owner a copy of anything they sign, and never make the job contingent on waiving these rights.
• Remedies. The owner can rescind or recover actual economic damages plus up to $5,000 in noneconomic damages, and attorney's fees if you knowingly violated the chapter.

Licensing in Ohio

The Ohio Construction Industry Licensing Board licenses heating and air conditioning, refrigeration, electrical, plumbing and hydronics contractors, but chapter 4740 defines the projects it covers to exclude residential buildings. Licensing for remodelers and residential trades is left to cities and counties, so check with the building department where the job is.

Signing it electronically

Ohio's Uniform Electronic Transactions Act lets both sides sign electronically (see e-signature law in Ohio), and Ohio's cancellation rules already contemplate email. Leave the buyer a copy signed by you, which can be the completed PDF, and for notices the law requires in writing, get the consumer's consent to electronic records first (15 U.S.C. § 7001(c)).

Setting it up in SignMaster

1. 1

   Attach the notice to the contract

   In your template, put the bold cancellation statement beside the buyer's signature field and the notice of cancellation on its own page with your email address filled in.

2. 2

   Let the owner choose the estimate

   For $25,000-plus jobs, place a radio field with written and oral options beside the EXCESS COSTS statement, and add your insurance certificate as a second document.

3. 3

   Count before you mobilize

   The date signed field records the transaction date. Count three business days from it, and schedule the crew after the deadline.

4. 4

   Approve extras in writing

   Send excess-cost estimates as a change order the owner signs before the work, and the audit trail shows the approval came first.