Professions and vocations: contractors: home improvement contracts: prohibited business practices.

Assembly Member Berman's proposal to modify California's home improvement contract regulations expands oversight of accessory dwelling unit construction while establishing stricter penalties for payment violations by contractors. The legislation amends the state's Business and Professions Code to explicitly include ADUs within the definition of home improvement projects on residential properties.

The bill maintains existing limitations on contractor down payments to $1,000 or 10% of the contract amount, whichever is less, but introduces new consequences for violations. Contractors who collect excessive down payments or request payment beyond the value of completed work now face license revocation and minimum civil penalties of $10,000 if the violation results in consumer losses exceeding 10% of the contract amount. Unlicensed contractors face equivalent civil penalties through citation. The legislation preserves exemptions for contractors who furnish performance bonds or approved joint controls.

For violations occurring in state or federally declared disaster areas, the bill requires courts to impose maximum criminal fines, which range from $100 to $5,000. The amendments also specify a four-year statute of limitations for prosecuting unlicensed contractors and two years for licensed contractors, measured from either the contract date or first payment date.