CONTRACTOR DISCLOSURE REQUIREMENTS

Idaho law requires general contractors to provide certain disclosures to owners and purchasers of residential real property.  The Idaho Contractors Board provides the following guidance to registered contractors to facilitate compliance with Idaho law:

Initial Disclosure

Idaho Code § 45-525(2) requires a general contractor, prior to entering into a contract in excess of $2,000 with a homeowner or purchaser of residential real property to construct, alter or repair any improvements on residential real property, or for the purchase and sale of newly constructed property, to provide a disclosure statement.  The general contractor must also provide an acknowledgment of receipt to be executed by homeowner or purchaser, retain proof of receipt and provide a copy to the homeowner or purchaser.  The statement must include the following disclosures:

1. The homeowner or purchaser has the right, at their reasonable expense, to require the general contractor to obtain lien waivers from any subcontractors providing services or materials to the general contractor.

2. The homeowner or purchaser has the right to receive from the general contractor proof that the general contractor has in effect a general liability insurance policy including completed operations and workers compensation insurance for employees as required by Idaho law.

3. The homeowner or purchaser must be informed of the opportunity to purchase an extended policy of title insurance covering certain unfilled or unrecorded liens.

4. The homeowner or purchaser has the right to require, at their expense, a surety bond in an amount up to the value of the construction project.

Disclosure Upon Completion

Idaho Code § 45-525(3) requires a general contractor to provide to a homeowner or purchaser of residential real property an additional disclosure statement, within a reasonable time (1) prior to receipt of final payment from the homeowner or purchaser for construction, alteration, or repair of any improvement of residential real property or (2) prior to closing on a purchase and sales agreement with a prospective purchaser.  The following requirements apply: 

1. The general contractor must sign the disclosure statement.

2. The disclosure statement must list the business names, addresses and telephone numbers of all subcontractors, materialmen and rental equipment providers who have a direct contractual relationship with the general contractor and who supplied materials or performed work on the residential property of a value in excess of $500.  

3. Subcontractors, materialmen and rental equipment providers listed in the disclosure statement are authorized to disclose balances owed to the homeowner or purchaser and their agents.

4. The general contractor is not liable for any error, inaccuracy or omission of any information delivered pursuant to Idaho Code § 45-525(3) if the error, inaccuracy or omission was not within the general contractor’s personal knowledge.

Pursuant to Idaho Code § 45-525(4), failure to provide the disclosures required by Idaho Code §§ 45-525(2) and (3) constitutes an unlawful and deceptive act or practice in trade or commerce under the Idaho Consumer Protection Act, Chapter 6, Title 48, Idaho Code.  The Board may discipline a registered contractor for a violation of the Idaho Consumer Protection Act pursuant to Idaho Code § 54-5215(2)(b).

If you have questions concerning these requirements, the Board recommends that you consult your private attorney for additional counsel.

Last Modified - January 24, 2008