Starting January 1, 2026, California law added new disclosure requirements to home improvement contracts under Business and Professions Code § 7159. These changes come primarily from Senate Bill 517 (SB 517) and Assembly Bill 1327 (AB 1327) and apply to residential projects over $500, which includes most homeowner fence, gate, and automatic opener installations.
While these laws do not radically rewrite contract requirements, they do impose new transparency and notice obligations that contractors must incorporate into their contract templates to avoid CSLB discipline and contract enforceability issues.
What Changed in 2026 (And What Did Not)
1. Disclosure of Subcontractor Use (SB 517)
Home improvement contracts must now disclose whether subcontractors will be used on the project.
The statute does not prescribe a specific format, but the disclosure must be clear and affirmative. Many contractors satisfy this by using a simple “Yes / No” indication in the contract, which is considered best practice — though not expressly mandated by statute.
Key point:
The homeowner must be informed whether subcontractors will perform any portion of the work.
2. Obligation to Provide Subcontractor Information Upon Request
If subcontractors are used, the contractor must be prepared to provide — upon the homeowner’s request — a list including:
- Subcontractor name
- Contact information
- CSLB license number
- License classification
The statute does not require that subcontractors be listed in the contract upfront in all cases. Instead, it requires transparency and availability of that information if the homeowner asks for it.
Many updated contract templates include a written acknowledgment that such information will be provided upon request. While commonly recommended by attorneys, this exact wording is not dictated verbatim by statute.
No “50% Subcontractor Rule” in the Final Law
Earlier bill drafts and secondary summaries referenced a potential requirement to name subcontractors performing more than 50% of the project. That provision does not appear in the chaptered version of SB 517 and is not currently law.
Fence contractors are not required to disclose a subcontractor’s identity upfront based solely on percentage of work performed.
3. Prime Contractor Responsibility Remains Unchanged
SB 517 clarifies — but does not materially change — that the prime contractor remains fully responsible for completing the project in accordance with the contract, plans, and specifications, even when subcontractors are used.
This is especially relevant on fencing projects involving gate automation technicians, concrete subs, or specialty installers.
Digital Contract Updates (AB 1327)
AB 1327 updates the Right to Cancel provisions of § 7159 to reflect modern communication methods.
What Is Now Required
Home improvement contracts must now include:
- The contractor’s email address
- A telephone number for assistance with cancellation
- Notice that the homeowner may deliver the Notice of Cancellation by email
This applies only to cancellation rights, not to all contract communications.
What Is Not Required
- There is no requirement to list your general liability insurance carrier’s phone number.
- There is no requirement to accept change orders, payments, or other notices by email unless otherwise agreed.
Change Orders: What Still Applies
All existing home improvement change order rules remain in effect:
- Must be in writing
- Must be signed before performing the changed work
- Must clearly describe the added or modified scope and price
SB 517 and AB 1327 do not add a separate requirement that subcontractor disclosure language be repeated in every change order, though contractors should update disclosures if the use of subcontractors materially changes.
Enforcement & Risk
Failing to include statutorily required contract disclosures under § 7159 is grounds for:
- CSLB administrative citations
- Fines or corrective orders
- License discipline in serious or repeated cases
In disputes, homeowners may also argue that a non-compliant home improvement contract is unenforceable, which can put payment at risk even when work was properly performed.
Practical Compliance Checklist for Fence Contractors
- ☐ Update home improvement contract templates to disclose whether subcontractors will be used
- ☐ Ensure your process allows you to provide subcontractor license and contact info upon request
- ☐ Add your business email address to the contract
- ☐ Update the Right-to-Cancel notice to allow email delivery
- ☐ Train anyone who prepares or signs contracts on the new requirements
Bottom Line
For California fence contractors doing residential work:
- Transparency about subcontractors is now required
- Email cancellation is now permitted
- Exact wording and checkboxes are not mandated — clarity is
- Over-disclosure is safer than omission
- Some commonly repeated “rules” (like the 50% threshold) are not law
Updating your contracts carefully — without adding requirements that don’t exist — is the best way to stay compliant and protect your right to get paid in 2026 and beyond.