(a) It shall be unlawful to commence work under a home improvement contract, or deliver any property or perform any services other than obtaining building permits or other similar services preliminary to the commencement of work, and the home improvement contract shall be unenforceable, if both of the following occur:

(1) The property owner entered into the home improvement contract based on the reasonable belief that the work would be covered by the PACE program.

(2) The property owner applies for, accepts, and cancels the PACE financing within the right to cancel period set forth in subdivision (b) of Section 5898.16 or applies for but is not approved for PACE financing in the amount requested by the property owner.

(b) If work has commenced in violation of subdivision (a), then:

(1) The contractor is entitled to no compensation for that work.

(2) The contractor shall restore the property to its original condition at no cost to the property owner.

(3) The contractor shall immediately and without condition return all money, property, and other consideration given by the property owner. If the property owner gave any property as consideration and the contractor does not or cannot return it for whatever reason, the contractor shall immediately return the fair market value of the property or its value as designated in the contract, whichever is greater.

(c) (1) If the contractor has delivered any property to the property owner pursuant to a contract that is unenforceable under subdivision (a), the property owner shall make the property available to the contractor for return within 90 days of execution of the contract provided that:

(A) The provisions of subdivision (b) have been met.

(B) The property can be practically returned to the contractor and removed, at the contractor’s expense, without leaving any damage to the property owner’s property.

(2) Failure of the contractor to comply with this subdivision shall allow the property owner to retain without obligation in law or equity any property provided pursuant to the unenforceable contract.

(d) The property owner may waive the requirements in subdivision (a) if all the following are met:

(1) The contract is executed in connection with the making of emergency or immediately necessary repairs to protect persons or real or personal property.

(2) The property owner initiated the contract for the emergency repair or immediately necessary repair.

(3) The property owner provides a separate statement that is handwritten in ink by a property owner and dated and signed by each property owner, describing the situation that requires immediate remedy, and expressly acknowledges that the contractor has informed them of his or her right to cancel and that he or she waive the right to cancel the sale.

(e) If the property owner waives his or her right to cancel on the home improvement contract to allow the home improvement contractor to proceed with installation, and then cancels his or her PACE financing or is not approved for PACE financing in the amount requested by the property owner, it shall not invalidate the home improvement contract.

(f) This section does not authorize the commencement of work under a home improvement contract if the commencement of work is prohibited by Sections 22684, 22686, or 22687 of the Financial Code.

(Amended by Stats. 2018, Ch. 798, Sec. 15. (SB 1087) Effective January 1, 2019.)