Word To The Wise For Contractors: Don’T Forget Required Disclosure Statements

Construction Law Attorneys Serving Contractors in the Tacoma, WA Area

Most Washington State residential and commercial contractors take great pride in their level of service and workmanship. They work with the best materials available and, in doing so, add real value to many real estate projects around the state. Successful contractors pay attention to details at the job site. Failure to be attentive to required lien paperwork, however, can sink a business just as quickly as performing shoddy work.

Hidden within the Contractor Registration Act (Chapter 18.27 RCW) are important provisions that, if not followed to the letter, can sink any chance you may have to be paid if the owner gets into financial difficulty or refuses to pay.

Disclosure Statement Requirements

RCW 18.27.114 requires that contractors working on limited scope residential projects or commercial projects furnish their customers with a Notice to Customers Disclosure Statement (“the Disclosure Statement”) prior to commencing work. The Disclosure Statement provides the customer with advance notice of his or her rights and responsibilities. It details the contractor’s registration and bonding requirements, and – most importantly – it warns the customer of the contractor’s right to file a lien claim in the event of nonpayment.

When Must the Disclosure Statement Be Utilized?

The Disclosure Statement is mandatory with regard to any project:

  • For the for the repair, alteration, or construction of four or fewer residential units or accessory structures on such residential property when the bid or contract price totals $1,000 or more; or
  • For the repair, alteration, or construction of a commercial building when the bid or contract price totals at least $1,000 but less than $60,000.

The Contractor Registration Act acknowledges that the contractor need not blindly follow the form found on Washington Department of Labor & Industries (“L & I”) website. Legal experts caution, however, that when it comes to notices and lien forms, being “inventive” generally doesn’t pay.

Furnishing & Maintaining Copies

The contractor must do more than just hand a copy of the Disclosure Statement to the owner or customer. The contractor must have it signed, provide a signed copy for the owner/customer, and keep a signed copy in the contractor’s files for a minimum of three years. Failure to do results in:

  • The loss of any mechanics (contractor’s) lien on the project; and
  • A potential fine levied by L & I

Contractors who ignore the Disclosure Statement rules may also be determined to have violated various Consumer Protection laws. Bottom line: If you deal directly with property owners (the requirement does not apply to contractors contracting with other contractors), make sure you use the form and deliver it properly to the owner/customer at the beginning of every project and obtain signatures on the same.

Bolan Law Group.: Experienced Construction Law Experts

The law regarding Disclosure Statements shows that in Washington State, the “devil is in the details.” Attention to detail is important to your business. One of those details should be the retention of an experienced legal team to help you manage the maze of rules and regulations that are all part of the modern commercial landscape. Bolan Law Group. has provided general contractors, business owners, developers, subcontractors, and others in the construction industry with comprehensive legal services for over 30 years.

We have provided legal counsel in small and large projects alike. We work with clients closely to resolve matters as quickly and economically as possible. We work collaboratively – sharing strategies, ideas, and experience. Our team of attorneys and staff is big enough to handle your matter, yet we are small enough to provide you with the most personal legal service possible. We pride ourselves on designing the simplest, most effective solution for your legal issue. For assistance with any sort of real estate issue, contact us on the web, or call our office at (253) 470-2356.

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