Many of us know someone with a nightmare home improvement story: contractors who fail to show up or fail to finish a job, cost overruns that break the budget, shoddy work not completed in compliance with building codes or professional standards. As of 2009, Pennsylvania provides extra protection for consumers victimized by home improvement fraud, in the form of the Home Improvement Consumer Protection Act (“HICPA”).
Broadly, the HICPA requires home improvement contractors to register with the state Attorney General’s Bureau of Consumer Protection, and establishes strict rules for the content of contracts for home improvement projects. It further goes on to criminalize, and to allow a right of recovery for, specific acts that are defined as home improvement fraud. This article examines the act’s provisions regarding registration and contracts.
Who must register?
Any person who owns or operates a home improvement business that earns more than five thousand dollars a year, or who offers or agrees to perform any home improvement project, must register as a contractor with the Bureau of Consumer Protection. This includes any subcontractor or independent contractor who contracts with a home improvement retailer (such as Home Depot or Lowe’s) to provide home improvement services to that retailer’s customers. However, it does not include a home improvement retailer with a net worth of more than fifty million dollars, or a retailer’s employees who do not perform home improvement. The Attorney General’s website explains that you as a homeowner can contact the Bureau to check the registration status of a contractor you contemplate hiring, as well as to obtain other information about that contractor.
What must be in a home improvement contract?
Under the HICPA, a home improvement contract must:
- Be in writing and legible;
- Contain the contractor’s registration number, as well as the contractor’s name, address and telephone number;
- Be signed by the homeowner and the contractor;
- Contain the entire agreement between the homeowner and the contractor;
- Set out the date of the transaction, as well as approximate dates that work is expected to be begun and completed;
- Describe the work to be done, including the materials to be used and specifications which cannot be changed without a written change order signed by the homeowner and the contractor;
- Include the total price to be charged for the work;
- Include the amount of any down payment as well as any amount advanced for purchasing special order materials;
- List the names, addresses and phone numbers of any subcontractors on the project who are known as of the contract date;
- Contain an agreement that the contractor will maintain specified amounts of liability insurance covering personal injury and property damage;
- Include the toll-free number of the Consumer Protection Bureau; and
- Include notice that the owner has the right to rescind the contract within three days of the date the contract was signed.
A contract that omits any of these provisions cannot be enforced against a consumer. Additionally, while the contract may contain an arbitration clause, that clause must satisfy further statutory requirements, including, among others, that it be printed in twelve-point, bold-faced type and appear on a separate page.
What cannot be included in a home improvement contract?
Finally, the statute sets out certain clauses which, if incorporated into the contract, make the entire thing voidable by the consumer. Some of these are:
- A hold harmless clause;
- A clause waiving federal, state, or local health, life, safety, or building codes;
- A confession of judgment clause;
- A clause waiving the right to a jury trial or any of the rights provided under the HICPA;
- A wage assignment provision; and
- A clause in which the owner agrees not to assert any claim or defense that arises out of the contract.
Consult a Philadelphia attorney
If you have concerns or questions about your experiences with a home improvement contractor, the experienced attorneys of The Kim Law Firm, LLC, can help. Contact The Kim Law Firm today for a consultation.