In 2009, Pennsylvania enacted the Home Improvement Consumer Protection Act (“HICPA”) to protect consumers from unfair trade practices and fraudulent home improvement contractors. Prior to 2009, consumers could bring suit against home improvement contracts under several common law theories, including breach of contract or fraud. Nothing specifically dealt with the numerous so called home improvement contractors who misrepresented themselves as professionals or experts.
Anyone could call himself a contractor and claim to do a job better and cheaper then the next guy. I once hired contractor who I later discovered was a recently fired cook who was doing home improvement with his brothers without a license. While my cook/contractor did a fine job for the minor job I contracted him for, more often than not that is not the case. Many naïve and unsophisticated consumers have found themselves victims of poor workmanship, unconscionable contract requirements, or scams in which they paid thousands up front and received nothing in return.
HICPA altered the regulatory landscape within Pennsylvania for the home improvement industry. HICPA specifically required all contractors to register with the Bureau of Consumer Protection of the Pennsylvania Attorney General (Bureau).
HICPA defines contractors as, “Any person who owns and operates a home improvement business or who undertakes, offers to undertake or agrees to perform any home improvement. The term includes a subcontractor or independent contractor who has contracted with a home improvement retailer, regardless of the retailer’s net worth, to provide home improvement services to the retailer’s customers.”
The term contractor specifically excludes contractors who have not performed more than $5,000 in total cash value of home improvement work the previous year, and large home improvement retailers having a net worth of more than $50,000,00 and their employees that do not do home improvement work.
HICPA further defines home improvement as anything done to a private residence, building or land exceeding $500.00 including, but not limited to: 1) Repair, replacement, remodeling, demolition, removal, renovation, installation, alteration, conversion, modernization, improvement, rehabilitation or sandblasting; 2) construction, replacement, installation or improvement of driveways, swimming pools, pool houses, porches, garages, roofs, siding, insulation, solar energy systems, security systems, flooring, patios, fences, gazebos, sheds, cabanas, painting, doors and windows and waterproofing, 3) the installation of central heating, air conditioning, storm windows or awnings.
HICPA requires all home improvement contracts be in writing and provided in their entirety to the consumer at the time it is signed. Each home improvement contract must contain: 1) The registration number of the contractor; 2) Signature of the owner and the contractor or a salesperson of the contractor: 3) The date of the transaction; 4) Contact information of the contractor; 5) The total sales price and any down payments; 6 ) An approximate starting date and completion date; 7) A description of the work to be performed, the materials to be used and a set of specifications; 8) The names, addresses and telephone numbers of all subcontractors on the project; 9) A statement that the contractor agrees to maintain insurance and identifies the current amount of insurance; 10) The toll-free telephone number for the Bureau; and 11) A notice of a three day Right of Rescission.
Under HICPA, home improvement contracts may NOT contain certain provisions including: 1) A hold harmless clause; 2) A waiver of Federal, State or local health, life, safety or building code requirements; 3) A confession of judgment clause; 4) A waiver of any right to a jury trial in any action brought by or against the owner; 5) An assignment of or order for payment of wages or other compensation for services.; 7) A provision by which the owner agrees not to assert any claim or defense arising out of the contract; 8) A provision that the contractor shall be awarded attorney fees and costs; 9) A clause by which the owner relieves the contractor from liability for acts committed by the contractor or the contractor’s agents in the collection of any payments or in the repossession of any goods; and 10) A waiver of any rights provided under the HICPA.
Under HICPA, a home improvement contractor must register with Bureau. A contractor is required to fully refund any amount paid by a customer within 10 days after it receives a written request for refund, if 45 days have passed since the work was to begin, and no substantial portion of the work has been performed. A contractor may not materially deviate from plans or specifications without a written change order that contains the price change for the deviation. Any contract of more than $1,000, the contractor cannot accept a deposit in excess of 1/3 of the contract price, or 1/3 of the contract price plus the cost of special order materials.
Violation of HICPA can carry both criminal and civil penalties. Home Improvement Fraud is punishable as Felony of the Third degree if the amount exceeds $2,000.00 and as a Misdemeanor of the First Degree, if the amount involved is less than $2,000.00.
Civilly, violations of HICPA are deemed violations of the Uniform Trade Practices and Consumer Protection Law (“UTPCPL”). HICPA extends the prohibitions, remedies, and damages available under UTPCPL to home improvement contractors. Under the UTPCPL, penalties for contractors may include treble damages and attorney’s fees.
HICPA provides significant statutory protection and remedies for consumers where there was previously none.