Recently, Pennsylvania laws regulating home improvement construction contractors changed dramatically with the passage of the Home Improvement Consumer Protection Act. The Act goes into effect on July 1, 2009. Any person or business involved in home improvement work must learn more about the Act.
The Act requires that any person or business that provides home improvement services and that earns $5,000 or more a year from those home improvement services must register with the Commonwealth of Pennsylvania and must provide proof of insurance. “Home improvement” is very broadly defined in the Act to include all repairs and demolition performed on private land and at private residences. The Act does not apply to any new home construction. The Act includes some narrow exclusions for certified landscapers and for emergency work.
By July 1, 2009, home improvement construction contractors must register with the Bureau of Consumer Protection section of the Office of the Attorney General. Go to www.attorneygeneral.gov to register. The registration process requires that a contractor disclose his or her name, home and business addresses, age, driver’s license number, Social Security number, and all prior business names under which the contractor ever operated. Partnerships and corporations engaged in home improvements must also register and must disclose the identities of the major partners and shareholders. All individuals, partnerships, and corporations must disclose criminal histories and previous license revocations. All home improvement construction contractors now must maintain $50,000 in insurance.
The Act also provides that all home improvement construction contracts in Pennsylvania must include the approximate start and finish dates, full contact information for the contractor, a complete description of the work to be done, including the materials to be used and a set of specifications, and the identities of any subcontractors that the contractor intends to use. Contracts must include the Bureau’s toll‑free telephone number and a three‑day right of rescission.
Home improvement construction contracts that require arbitration of claims must set out the arbitration clause terms in 12‑point, bold‑face type, in capital letters, on a separate page. The arbitration clause must be separately signed by the contractor and the homeowner. If certain terms are included in a home improvement construction contract, the contract is completely “voidable” by the owner, meaning that the owner can, at any time, reject the contract as void. Clauses that make such construction contracts voidable by homeowners include those that (1) waive building codes, (2) award attorney’s fees to contractors, (3) waive rights under the Act, and (4) waive a jury trial.
The Act establishes the crime of “home improvement fraud.” Contractors who violate the Act, or make false promises, or misuse down payments can be charged criminally and, if convicted, may be fined and imprisoned. Jurisdiction for criminal prosecution lies with the local county district attorney.
A contractor may be liable to a homeowner for triple damages and attorney’s fees incurred by the homeowner if the contractor engages in any “prohibited acts.” The long list of prohibited acts includes failing to refund down payments when properly requested to do so by the homeowner, requiring excessive down payments, securing false certificates of occupancy from local code officers, abandoning a job, and/or deviating from plans or specifications.
The Pennsylvania Home Improvement Consumer Protection Act now joins the previously enacted Unfair Trade Practices and Consumer Protection Law and the Contractor and Subcontractor Payment Act to regulate the business of home construction and home improvement in Pennsylvania. Before entering into a home improvement contract, make sure that you know your rights and responsibilities under these laws.