California home improvement contracts and the right to cancel

When the home improvement contract rules apply

In California, Business and Professions Code section 7159 sets out what a home improvement contract must contain. It applies when the total price for labor, services and materials is more than $500, whether you contract with an owner or a tenant. The contract, and any change to it, must be in writing and signed by both sides before the work it covers starts.

Home improvement is a broad term. Section 7151 covers repairing, remodeling, altering, converting, modernizing or adding to residential property. It names driveways, pools and spas, patios, fences, landscaping, garages and solar systems, among others. It also covers goods and services bought to improve a home, such as carpeting, heating or air conditioning equipment, and termite extermination.

This isn’t legal advice. We read the current code text on October 4, 2026, and cite it under each rule. Confirm the details for your own jobs with the Contractors State License Board (CSLB) or a lawyer.

One common exception is a service and repair contract under section 7159.10, which has shorter rules of its own. It only counts as one when all four of these are true. If you write a job up as a service and repair contract and miss one, the full home improvement rules apply, whatever the price:

• The price is $750 or less.
• The homeowner contacted you to ask for the work.
• You don’t sell anything beyond what’s reasonably needed to fix the problem they called about.
• No payment is due, and you accept none, until the work is done.

References: California Legislative Information: Business and Professions Code section 7159 (opens in a new tab) · California Legislative Information: Business and Professions Code section 7151 (opens in a new tab) · California Legislative Information: Business and Professions Code section 7159.10 (opens in a new tab)

What page one has to show since January 1, 2026

AB 1327 changed the first page of every home improvement contract from January 1, 2026. The right-to-cancel notice already mentioned email. Now the Notice of Cancellation form lists email too, and a cancellation counts once it’s given to you at the email address in the contract. So page one has to give that email address and someone to call for help. CSLB’s December 2025 bulletin on new laws flagged the change. It noted that a homeowner can complain to CSLB if the Notice of Cancellation is missing.

Contract forms, templates and addenda written before 2026 will be missing the email address and the phone number. CSLB’s own contractor guide, Contracting for Success, still shows a Notice of Cancellation that lists mail or hand delivery but not email. It has no five-day notice for buyers 65 or older either. So check whatever form you use against the current text of section 7159.

On page one, in type no smaller than the body of the contract, you need these three items. The email address and the phone number are the 2026 additions:

• The date the homeowner signed the contract.
• Your name, address and email address for the Notice of Cancellation. Right before them goes a statement that the notice may be sent to that address or email address.
• A phone number for you or your representative, to help the homeowner find and fill in the Notice of Cancellation.

References: California Legislative Information: Business and Professions Code section 7159 (opens in a new tab) · California Legislative Information: Civil Code section 1689.6 (opens in a new tab) · California Legislative Information: AB 1327 (2025), Home improvement and home solicitation: right to cancel contracts: notice (opens in a new tab) · CSLB: New Laws Affecting Contractors Starting in 2026 (bulletin #25-04) (opens in a new tab) · CSLB: Contracting for Success, A Contractor’s Guide to Home Improvement Contracts (opens in a new tab)

Home improvement contract checklist: what else it must include

Page one is only the start. Section 7159 lists headings, statements and notices the contract must contain, some in set type sizes. Leaving any of them out is cause for discipline by CSLB. Here is the list in short form. The code gives the exact wording, so copy from it, not from this summary:

• Your name, business address and license number, plus the salesperson’s name and registration number if one sold the job. See your CSLB license number on quotes and contracts.
• The heading “Home Improvement”, plus the statement that the homeowner is entitled to a completely filled-in copy, signed by both of you, before work starts.
• The contract price in dollars and cents, any finance charge shown separately, and a description of the project and the significant materials and equipment.
• Any down payment (at most $1,000 or 10% of the price, whichever is less) and schedule of progress payments, with the required warnings. See down payments and progress payments in California.
• What counts as substantial commencement of work, an approximate start date and an approximate completion date.
• If plans or other documents are part of the deal, the heading “List of Documents to be Incorporated into the Contract”, followed by the list.
• The note about extra work and change orders, which become part of the contract only when signed before that work starts. There’s also a notice telling the homeowner that extra work isn’t enforceable unless the change order lists the scope, the price change and the effect on payments or completion date in writing first. More in change orders signed before the extra work starts.
• A yes or no checkbox on whether you’ll use subcontractors. If yes, a statement that you’ll provide their names, contact details, license numbers and classifications on request; see subcontractor license details on file.
• Notices on commercial general liability insurance and workers’ compensation, the Mechanics Lien Warning, and the CSLB information notice.
• A notice near the signatures that the homeowner can require you to have a performance and payment bond. Also a statement that once each part of the work is paid, you’ll give a full lien release for it before the next payment.
• The right-to-cancel notice and the Notice of Cancellation form, covered next.

Reference: California Legislative Information: Business and Professions Code section 7159 (opens in a new tab)

The right to cancel: three, five or seven business days

Unless you negotiated the contract at your place of business, the homeowner must get a written three-day or five-day right-to-cancel notice with it. For disaster repairs, section 7159 requires a seven-day notice and lists no such exception. The notice goes in at least 12-point bold type, next to a space for the owner’s signature, and the owner signs and dates it. It must be in the same language as your sales presentation, Spanish for example. If a job is quoted at the home and signed at your office, ask a lawyer which rule applies. Giving the notice when you didn’t need to means a few days’ wait. Leaving it out when you did need it can keep the window open.

Which notice you give depends on the buyer and the job:

• Three business days: the default.
• Five business days: when the buyer is 65 or older. This applies to contracts entered into on or after January 1, 2021.
• Seven business days: for repairing or restoring a home damaged by a sudden or catastrophic event. It applies when the President or the Governor has declared a state of emergency, or a city or county has declared a local emergency.

References: California Legislative Information: Business and Professions Code section 7159 (opens in a new tab) · California Legislative Information: Civil Code section 1689.5 (opens in a new tab) · CSLB: Home Improvement Contracts, Step 2: Warnings and Exceptions (opens in a new tab)

How to count the cancellation deadline

For the three- and five-day windows, Civil Code section 1689.6 and section 7159 both start the clock on the day the homeowner receives a copy signed and dated by both of you. For a seven-day disaster repair, section 1689.6 counts from the day the homeowner signs and dates the contract, while the 7159 notice counts from receiving the copy. Hand over the signed copy at signing, so every count starts on the same day. The homeowner can then cancel until midnight of the third (or fifth, or seventh) business day after that day. Under Civil Code section 1689.5, a business day is every day except Sundays and nine listed holidays. Those are New Year’s Day, Washington’s Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans’ Day, Thanksgiving and Christmas. Saturdays count.

For example, a homeowner signs and gets the signed copy on Tuesday, November 24, 2026. Wednesday is day one. Thanksgiving doesn’t count, so Friday is day two and Saturday is day three: the deadline is midnight of Saturday, November 28. If the buyer is 65 or older, skip Sunday. Monday is day four and Tuesday, December 1, is day five. For a seven-day disaster repair, day seven is Thursday, December 3.

The homeowner can cancel by email, mail, fax or hand delivery. Cancellation happens when written notice is given to you at the address or email address in the contract. A mailed notice counts from the moment it’s mailed, so a letter can arrive after the deadline and still be on time. The homeowner doesn’t have to use your form, either. Any written message that shows they don’t want to be bound counts.

If they cancel, return anything they paid within 10 days of getting the notice. The homeowner must make any goods you delivered available for you to collect. If you don’t pick them up within 20 days, they may keep them. Work done before a cancellation earns you nothing. If that work changed the property, you must restore it to substantially as good condition as it was. That is the real cost of starting early.

References: California Legislative Information: Business and Professions Code section 7159 (opens in a new tab) · California Legislative Information: Civil Code section 1689.5 (opens in a new tab) · California Legislative Information: Civil Code section 1689.6 (opens in a new tab) · California Legislative Information: Civil Code section 1689.10 (opens in a new tab) · California Legislative Information: Civil Code section 1689.11 (opens in a new tab)

When the window stays open, and the exceptions

Get the paperwork wrong, and the window may not close at all. When the contract is signed, Civil Code section 1689.7 requires you to give the buyer a copy with the attached Notice of Cancellation. You must also tell them out loud that they can cancel and that a cancellation has to be in writing. The same section says the buyer may cancel until you have complied with it.

The Notice of Cancellation is a completed form, in duplicate, attached to the contract and easy to tear off. It shows the date of the transaction, your name and business address, and the deadline date. The right-to-cancel notice can sit on a separate page only if the contract has a checkbox the homeowner initials to confirm they got it.

A few situations work differently. Read the code text before you rely on any of them:

• Emergency repairs. Say the homeowner, their agent or their insurance representative came to you for repairs needed right away to protect people or property. Then the homeowner can waive the right to cancel. They must give you a separate statement, signed and dated, that describes the emergency and waives the right.
• Service and repair contracts. With all four conditions from the first section met, the right to cancel ends once work starts and the homeowner has a signed, dated copy.
• Disaster repairs. A repair contract signed away from your business within seven business days after a disaster damages the home is void. The exception is when the homeowner, their agent or their insurance representative asked you for the work. A phone call from the homeowner to your business counts as asking.

References: California Legislative Information: Civil Code section 1689.7 (opens in a new tab) · California Legislative Information: Civil Code section 1689.13 (opens in a new tab) · California Legislative Information: Civil Code section 1689.14 (opens in a new tab) · California Legislative Information: Civil Code section 1689.15 (opens in a new tab) · California Legislative Information: Business and Professions Code section 7159 (opens in a new tab)

What to keep with each job, and for how long

Under section 7111, failing to make and keep records of all your contracts, documents, receipts and disbursements (money you pay out) is cause for discipline. Those records must be available to CSLB for at least five years after each project is finished.

For the contract and the right to cancel, a useful job record holds:

• The final contract, signed and dated by both of you, saved as a PDF nobody can edit, with the homeowner’s signing date on page one.
• Where the contract was negotiated: at your place of business, or at the home. That decides whether a notice is required.
• Which notice you gave, three, five or seven-day, and why. Record “buyer is 65 or older: yes” rather than a birth date. You need the answer, not the birthday.
• The language of the sales presentation and of the notice.
• The date the homeowner signed, the date they received the signed copy, and how they got it. Hand over the copy at signing so both dates match.
• The signed and dated right-to-cancel notice, and the completed Notice of Cancellation with the deadline filled in.
• The deadline itself, and a status: open, passed or cancelled.
• Any cancellation: when and how it arrived, and the envelope if it came by mail, since the mailing date counts. Then the refund date and amount, and when you collected any goods.
• An emergency waiver statement, if you used one, plus every signed change order and each lien release you gave.

References: California Legislative Information: Business and Professions Code section 7111 (opens in a new tab) · California Legislative Information: Business and Professions Code section 7159 (opens in a new tab) · California Legislative Information: Civil Code section 1689.6 (opens in a new tab)

Setting up your system so the deadline takes care of itself

Most cancellation trouble is about timing. The crew shows up on day two, materials get ordered before the deadline, or a cancel email lands in an inbox nobody reads. A few made-up examples show where a job system helps.

A 6-truck HVAC company sells a system replacement at a 72-year-old homeowner’s kitchen table. That calls for the five-day notice. Their job system holds the install date and the equipment order until the deadline passes. It waits a couple more days in case a mailed notice is on its way.

A kitchen remodeler negotiates most jobs in the showroom, where no right-to-cancel notice is required, so the job record says where each contract was negotiated. A roofer repairing storm damage in a declared emergency area gives the seven-day notice. The record also notes whether the job began with the homeowner’s own call.

Whatever you use, an e-signature app, the quote feature in a field service app, or a system built for you, check it against the list below. If the tool you have already does all of it, keep it. One caution: California’s electronic transactions law (Civil Code section 1633.3) leaves out the transactions described in sections 1689.6, 1689.7 and 1689.13. That doesn’t ban electronic contracts, but that law doesn’t settle the question for these. If you sign or send contracts electronically, have a lawyer confirm that process meets these rules before you rely on it.

• Fills in page one from the job: the signing date, your email and phone, and the right notice for the buyer.
• Records when the signed copy reached the homeowner, not only when they signed.
• Works out the deadline with the Civil Code’s business days, holidays included.
• Holds scheduling and material orders for that job until the deadline passes, unless someone records a reason.
• Sends cancellations to a shared inbox that someone checks every day, and files each one with its job.
• Keeps the signed PDF and every later change with the job for at least five years, and lets you export all of it.
• Lets you update the contract template when the law changes, without touching contracts already signed.

Reference: California Legislative Information: Civil Code section 1633.3 (opens in a new tab)

If you want these records built into your own system

This isn’t legal advice. Have a lawyer check your contract form against the current text of section 7159 and Civil Code sections 1689.5 to 1689.15. Ask CSLB about anything unclear.

If the apps you use can’t hold these dates, we build custom business software for contractors. Contracts fill in from the job, the deadline is worked out for you, and the schedule waits for it. It can connect to QuickBooks Online, Google Calendar, and Gmail or Outlook; anything else, we check before we quote.

A focused fix, like one new contract form with its deadline, is typically $750–$3,000 over 1–⁠2 weeks. One business system is $6,000–$18,000 over 6–⁠10 weeks. These are our prices as of October 4, 2026. Every launch includes 30 days of fixes.

Our first call is free, and you get a fixed price in writing within 48 hours of it. Whoever you talk to, bring a page of notes:

• How many contracts you sign a month, and where: at homes, in a showroom, or both.
• The contract form you use today, and when it was last updated.
• Where signed contracts, cancellations and change orders live now, and who reads the email address on the contract.
• Every app you use for quotes, scheduling and invoices, and which ones have to connect.