Pennsylvania Recently Enacted the Home Improvement Consumer Protection Act (HICPA), Which

NEW REGULATIONS FOR HOME IMPROVEMENTS

In October 2008 Pennsylvania legislature approved the Home Improvement Consumer Protection Act (HICPA) requiring contractors to register with the Bureau General of Consumer Protection of the Pennsylvania Attorney General (Attorney General). The new law also requires that certain terms and language be used in contracts. Contractors will be required to bring their contracts into compliance and to register with the Attorney General by July 1, 2009.

At the time of this publication, the Attorney General had not set up the toll-free number or web site for consumers to check the registration number of a contractor. Check back to this site for additional information as the July 1, 2009 deadline draws near.

Contractor Registration

The law applies to contractors who do more than $500 worth of work for a consumer on their home or land adjacent to a private residence, and do over $5,000 of home improvement business annually. A contractor is defined as:

 Companies who are involved with the construction, replacement, installation or improvement of: driveways, swimming pools, solar energy systems, pool houses, garages, roofs, siding, insulation, security systems, flooring, patios, fences, gazebos, sheds, cabanas, painting, doors, windows, waterproofing, retaining walls, installation of central heating or air conditioning, and installation of storm windows or awnings.  Exemptions include: new home construction, commercial services, sale of appliances, a home improvement retailer having a net worth of more than $50,000,000 and other work as defined by the law.

To register, a contractor must provide: names, home addresses, telephone numbers, driver's licenses numbers, social security numbers, and all prior business names and addresses of the home improvement businesses operated by the individual, partner, officer and manager; a complete description of the nature of the business; and provide a statement which lists whether he or the company has ever been convicted of a criminal offense relating to a home improvement transaction, fraud, theft, deception or fraudulent business practices.

In addition, they must disclose any final civil judgments entered against it relating to a home improvement transaction in the last 10 years, or whether it has ever filed for bankruptcy. An applicant must inform the Attorney General whether they are registered in another state, and if any disciplinary action has occurred in that state, and whether a certificate or similar license issued by another state or township was revoked or suspended by a court extending to any other business in which the applicant does work.

All contractors must obtain and provide proof of liability insurance covering personal injury and insurance for property damage in a minimum amount of $50,000. You have the right to get a current certificate of insurance from the contractor’s insurance agent – always request a copy before hiring a contractor.

Contract Requirements

The new law requires that contracts: be legible, in writing, and include the registration number of the contractor; be signed by the owner and the contractor or a salesperson of the contractor; comprise of the entire agreement; include the date of the transaction; contain contact information of the contractor; consist of the total sales price and any down payments.

The contract must also include: approximate starting date and completion date; description of the work to be performed, the materials to be used and a set of specifications; names, addresses and telephone numbers of all subcontractors on the project on the project known at the date of signing the contract; state that the contractor agrees to maintain insurance and identifies the current amount of insurance; the toll-free telephone number for the Attorney General; and, a notice of the Right of Rescission.

A copy of the contract shall be provided to the consumer at the time it is signed by the owner or other contracted party and the contractor or a salesperson on behalf of a contractor.

If a home improvement contract contains any of the following clauses, the home improvement contract shall be voidable: a hold harmless clause; a waiver of Federal, State or local code requirements; a confession of judgment clause; a waiver of any right to a jury trial in any action brought by or against the owner; an assignment order for payment of wages or other compensation for services; a provision by which the owner agrees not to assert any claim or defense arising out of the contract; a provision that the contractor shall be awarded attorney fees and costs; 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, a waiver of any rights provided under HICPA.

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 is also in violation of the Unfair Trade Practices and Consumer Protection Law if it materially deviates from plans or specifications without a written change order that contains the price change for the deviation. If a contract is more than $1,000, the contractor cannot accept a deposit greater 1/3 of the contract price, or 1/3 of the contract price plus the cost of special order materials.

The law requires a contractor to include its registration number in all advertisements and on all contracts, estimates and proposals.

To view the entire new law, go to Home Improvement Consumer Protection Act.

Finding a good contractor may take some effort, but your hard work will pay off. Always check with the BBB for a current reliability report on a company. Make your home the best it can be by hiring a reputable, quality contractor.