Business and Professions Code section 7165

The requirements of this section may be substituted for the requirements of paragraphs (1), (2), and (3) of subdivision (a) of Section 7163 if a swimming pool contract is to be financed by a third-party lender and if all the following conditions are met:

(a)

The lender has agreed, in writing, to provide financing to the buyer for the maximum estimated construction cost of the swimming pool.

(b)

The lender has provided the buyer a written copy of the terms and conditions of the loan for the maximum estimated construction cost of the swimming pool, including the following terms disclosed in the manner required by the federal Truth in Lending Act and Regulation Z: the annual percentage rate, the finance charge, the amount financed, the total number of payments, the payment schedule, and a description of the security interest to be taken by the lender.

(c)

The lender has agreed in writing to the following:

(1)

To offer to loan the maximum estimated construction cost on the terms and conditions disclosed pursuant to subdivision (b).

(2)

If the construction cost of the swimming pool is determined after the completion of excavation to be less than the maximum estimated construction cost, to offer to loan the lesser amount needed to complete the construction of the swimming pool on the same security as, and at an annual percentage rate and monthly payment amount not to exceed, that disclosed in subdivision (b).
The lender’s written agreement shall state the duration of the offer, which shall not be less than 15 days following the completion of the excavation of the swimming pool.

(d)

The buyer acknowledges receipt of the writings required by subdivisions (a), (b), and (c) and, no sooner than three business days after receiving all of these writings, requests on the form prescribed in subdivision (e) that the contractor begin performance of the swimming pool contract prior to the expiration of any rescission period applicable to the loan.

(e)

The request of a buyer, described in subdivision (d), shall be set forth on a document separate and apart from the swimming pool contract and shall contain the following notice in at least 10-point type unless otherwise stated:
Under the law, this contract is not enforceable until:

(1)

A third party agrees to make a loan to finance the construction cost of the swimming pool;

(2)

You agree to accept the loan; and

(3)

You do not cancel the loan within the period prescribed for cancellation under the federal Truth in Lending Act or Regulation Z (usually three business days after the loan is consummated).
Until the cancellation period is over, the contractor cannot deliver any materials or perform any services except preliminary services for which no mechanic’s lien can be claimed.
However, as an alternative to the above, you can ask the contractor to start work and deliver materials before the cancellation period on the loan is over if all of the following have occurred:

(1)

The lender has agreed, in writing, to provide you with financing for up to the maximum estimated construction cost of the swimming pool.

(2)

The lender has provided you with a written copy of the terms and conditions of a loan for the maximum estimated cost, including the annual percentage rate, the finance charge, the amount financed, the total of payments, the payment schedule, and a description of the security interest to be taken by the lender.

(3)

The lender has agreed in writing to offer these terms and conditions for a period not less than 15 days following completion of the excavation of the swimming pool.

(4)

Three business days have passed since you received the writing mentioned in paragraphs (1), (2), and (3), and you then sign a copy of this form to request that the contractor begin construction of the swimming pool before the cancellation period on your loan is over.
The first day you can sign the request for the contractor to begin construction of the swimming pool is
.
(contractor to insert third business day after buyer receives writings described in subdivisions (a), (b), and (c))
If you sign this request, the contractor will be permitted to immediately begin performance of the contract, and if the contractor is not paid in accordance with the terms of the contract, he or she may file a lien against your property for the value of the labor and materials provided. [This paragraph shall be printed in 12-point type.]
I/we request that the contractor immediately start construction of the swimming pool. ______ Date __________ Buyer(s)”

(f)

The contractor shall provide the buyer a copy of the buyer’s signed request at the time of signature.

(g)

This section applies to each buyer who signs the swimming pool contract or the promissory note, other evidence of indebtedness, or security instrument incident to the loan for swimming pool construction.

(h)

For the purpose of this section, “business day” has the meaning provided in Section 9 of the Civil Code.

Source: Section 7165, https://leginfo.­legislature.­ca.­gov/faces/codes_displaySection.­xhtml?lawCode=BPC§ionNum=7165.­ (accessed Apr. 24, 2025).

Last Updated

Apr. 24, 2025

§ 7165’s source at ca​.gov