Remodeling
When you sign a contract for home improvements on your homestead, the contractor legally can place a lien on the homestead. If you sign a contract containing the language quoted above and you fail to make the payments, the company can take away your home. Therefore, it is extremely important that you understand exactly what your obligations will be under the contract and that you are confident you can meet those obligations. If you have any questions or doubts, consult an attorney before you sign the contract.

If there will be a lien on your home, make sure a notary is present to witness your signature. A notary other than the salesperson must be present to witness you sign the document creating the lien. It should be a warning to you if the salesperson does not have a notary present or if he says he will take care of the notarization later.

If your contractor fails to pay the subcontractors and suppliers, you are responsible even though you have not contracted directly with the subcontractor or supplier. Under California law, if a subcontractor or supplier who furnishes labor or materials for the construction of improvements on a property is not paid, the property may be subject to a lien for the unpaid amount.

If your homestead improvement exceeds $5,000 in cost, the contractor is required by law to deposit your payments in a construction account at a financial institution. Ask the contractor for written verification of the existence of the construction account. Monitor deposits and disbursements to subcontractors, laborers and vendors. Access to the account record should be included as a requirement in your written construction contract.

PAYING FOR THE WORK
It is normal for a contractor to ask for partial payment in advance and, provided that you have taken the precautions recommended above, you should expect to provide a part of the cost before the work begins. However, it is notorious that scammers involved in door-to-door rip-offs will ask for payment in full in advance then abscond without completing (sometimes without even starting) the job.

Even with a reputable business and a sound written contract in place, you should not pay in full until the work is complete and you have inspected it yourself and found it satisfactory. A partial-payment schedule usually will specify what part of the job has been done when a partial payment is due. Inspect the work and make sure the contractor has met the schedule before you make your payment.

If you are asked to sign a certificate of completion, do not do so until all the work is completely finished, the site is cleaned up and you are satisfied.

   
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