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But on the other hand, a contractor who understands these requirements can ensure that his contracts are enforceable under HICPA. In the current hot real estate market, many homeowners looking to sell are conducting home improvement projects to increase the value of their homes. And with work-from-home culture becoming a permanent staple across many industries, people are improving their living and workspaces in their homes. Home improvement projects aren’t cheap, and neither are the potential consequences of a dispute between homeowner and contractor.
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. The HICPA also criminalizes “Home Improvement Fraud.” Included in the definition of home improvement fraud is the receipt of advance payment by a contractor and the contractor’s subsequent failure to perform or provide the services or materials specified in the contract.
Highlights of HICPA
These contracts must include certain notices about the contractor, including information about the contractor’s registration number and insurance levels. HICPA also requires the inclusion of several other provisions that do not ordinarily appear in home improvement contracts, such as a notice with the telephone number for the Office of the Attorney General where consumers can confirm the contractor’s registration. This is the homeowner’s potential sword against a home improvement contractor that violates one of HICPA’s prohibitions. In Pennsylvania, consumers are protected from being made the victim of a home contractor’s deceptive or fraudulent practices by the Home Improvement Consumer Protection Act .
I believe courts will come down on the side of contractors this time, and for a very practical reason. The threat of an award of attorney fees keeps most disputes out of court – freeing up court calendars for more productive work. When you bid the plans and specs, you're agreeing to complete work as defined in those plans and specs – even if your estimate omits something essential to the job. Bidding the plans is routine on the largest construction projects. PennDOT won't even look at a contractor's estimate.
Understanding the Home Improvement Consumer Protection Act
The GC sends us a Construction Change Directive. We provide a quote for the additional work but they will not approve the price, they demand the work to be done and only after that will they discuss price. That’s pretty much everything thatmust be included in a home improvement contract in Pennsylvania. But that’s not everything you need to know.
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.
Prince Law Offices, P.C.
That means you're free to follow your conscience when drafting home improvement contracts. Pennsylvania courts imply warranties of habitability and good construction. But your contract can limit the scope or duration of warranty or disclaim those warranties entirely. You'll need help drafting a disclaimer of warranty or putting limits on warranty claims. 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, certain types of landscaping , painting, doors and windows, and waterproofing.
Treat it as though it were item xxii in the list of unfair trade practices. UTPCPL allows a recovery for treble damages or $100 per violation, whichever is greater. Another remedy allowed by the UTPCPL is reasonable attorney’s fees, which may be awarded in addition to any other award, and which may be substantial. The Tri-County Area is no stranger to home improvement contract scams. Anyone who has paid attention to the local newspapers over the past few years will recall the scandals and prosecutions of home improvement contractors gone bad – of contracts not honored, and of unearned deposits not refunded.
Project details
The only exception to this right to rescind are contracts executed under the emergency provisions of Section 7 of the Unfair Trade Practices and Consumer Protection Law. The Act also requires a minimum amount of insurance coverage when working on home improvement projects. The contractor should carry, and the contract should reflect that the contractor has liability insurance covering personal injury of at least $50Kand property damage coverage in the same amount. There are a few provisions that every construction contract should have. However, when it comes to residential projects, many states like Pennsylvania provide additional requirements and protections for homeowners. Make the owner liable for surprises on the job.
Collect attorney fees if suit or arbitration is required. Using a contract that doesn't comply with HICPA is an "unfair or deceptive act or practice" under Pennsylvania's Unfair Trade Practices and Consumer Protection Law. Even a trivial omission gives an owner the right to seek triple damages plus costs and attorney fees. If you have to threaten suit or arbitration to collect, the owner's attorney is sure to scour every word in your contract looking for anything that doesn't comply with HICPA. NaN. Unfair Trade Practices and Consumer Protection Law . A violation of any of the provisions of HICPA is a violation of the UTPCPL.
We envision a world where no one in construction loses a night’s sleep over payment. Reprinted with permission from theWinter 2022 Edition of Network Magazine© 2022 All rights reserved. Further duplication without permission is prohibited.
Contact The Kim Law Firm today for a consultation. The names of any subcontractors working on the site. The following article is informational only and not intended as legal advice. Speak with a licensed attorney about your own specific situation. In Shafer Electric v. Mantia, 67 A.3d 8 (Pa. Super 2013) the Superior Court followed Durst and held that a reading of the wording of the statute led to an absurd result which violated general principles of PA law. In this case, this panel of the Superior Court based its decision on statutory construction.
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. This matter addressed the issue of whether a contractor who had failed to comply with the registration requirements of Pennsylvania’s Home Improvement Consumer Protection Act (“HICPA”) (73 P.S. § 517.1 et seq.) was precluded from recovering damages in quantum meruit. Following the completion of the work, the Owners failed to pay the Contractor, who subsequently filed a mechanics’ lien claim in the amount of $37,874.26 against the Property. In response, the Owners filed Preliminary Objections asserting that the contract was unenforceable due to the Contractor’s failure to register in Pennsylvania as required by HIPCA. Even including certain provisions in a contract can void the entire agreement. This includes any waivers of health, safety, and building codes, a hold harmless clause, a statement by the property owner agreeing not to assert a claim or defense, or a provision relieving the contractor from liability.
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