Plain English Breakdown
The bill passed both chambers but was ordered to inactive file before becoming law; therefore, these rules are not currently in effect.
AB-559: New Rules for Home Improvement Contracts
This proposal adds accessory dwelling units to the definition of home improvement and sets stricter penalties, including license revocation and fines, for contractors who take payments without doing work.
What This Bill Does
- Adds construction, erection, installation, replacement, or improvement of accessory dwelling units on residentially zoned property to the legal definition of 'home improvement'.
- Keeps existing rules requiring written contracts that list the total price and limits downpayments to $1,000 or 10% of the cost.
- Prohibits contractors from asking for payments larger than the value of work done or materials delivered.
- Subjects licensees who take payments causing financial loss over 10% of the contract price to license revocation and a civil penalty of at least $10,000.
Who It Names or Affects
- Licensed contractors (licensees) who sign home improvement contracts.
- Unlicensed people who perform work on homes or accessory dwelling units.
- Consumers hiring workers for construction, installation, or repair projects involving financial loss over 10% of the contract price.
Terms To Know
- Accessory Dwelling Unit
- A separate living space built on residentially zoned property that is included in the definition of home improvement under this bill.
- Downpayment
- Money paid at the start of a contract, which existing law limits to $1,000 or 10% of the total cost.
- Civil Penalty
- A fine of at least $10,000 ordered against licensees or unlicensed persons who violate payment rules causing significant financial loss.
Limits and Unknowns
- The bill was placed in an inactive file at the request of Senator Niello on September 3, 2025.
- No effective date is listed because the bill did not proceed to final enactment after being filed.