Home Improvement Consumer Protection Act - …

1 home Improvement Consumer Protection Act By: Bryan W. Shook, Esquire 2132 Market Street Camp Hill, Pennsylvania 17011 1-800-287-1202 On October 17, 2008, Governor Ed Rendell, signed into law the Pennsylvania home Improvement Consumer Protection Act (HICPA 73 et seq.) will forever effect to the way contractors in Pennsylvania conduct business. Under the law all home Improvement contractors in Pennsylvania must be registered through the Pennsylvania Attorney General s Office and be fully in compliant as of July 1, 2009. The law defines home Improvement contractors as anyone who owns and operates a home Improvement business which does any of the following examples in connection with land or a portion of the land adjacent to a private residence or a building or a portion of the building which is used or designed to be used as a private residence for which the total cash price of all work agreed upon between the contractor and owner is more than $500: i.

2 Repair, replacement, remodeling, demolition, removal, renovation, installation, alteration, conversion, modernization, Improvement , rehabilitation or sandblasting. ii. 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. iii. Without regard to affixation, the installation of central heating, air conditioning, storm windows or awnings. iv. The construction, replacement, installation or Improvement of buildings, driveways, swimming pools, porches, garages, roofs, siding, insulation, solar energy systems, security systems, flooring, patios, nondecorative fences, doors, lighting systems, concrete walkways and windows.

3 73 The bottom line under the new law is that all home Improvement contractors must register with the Attorney General s office at Fee for registering is $ Registrations must be renewed every two years. Compliance Once you have registered, you must ensure that you are complying with the law. Your contractor s registration number must be used on all advertisements, contracts, estimates, proposals after July 1, 2009. Biggest changes Three Business Day right to rescission o Assuming no holidays intervene, here is how this works: Contract signed Monday, the first day after the rescission period is Friday Contract signed Tuesday, the first day after the rescission period is Saturday Contract signed Wednesday, the first day after the rescission period is Tuesday Contract signed Thursday, the first day after the rescission period is Wednesday Contract signed Friday, the first day after the rescission period is Thursday Contracts signed on Saturday or Sunday, the first day after the rescission period is Friday.

4 Liability Insurance You must carry insurance covering personal injury in an amount not less than $50, and insurance covering property damaged in an amount not less than $50, Your Contracts Historically, home Improvement contracts in Pennsylvania have been enter into on the handshake principal with generally a short one or two page contract that follows. This is forever changed. Under the new law, any contract that does not meet the requirements of the law will be invalid and unenforceable against the owner. In real-world terms, if you want paid you ll need a new contract drawn up. The new law requires that a contract include certain specific information such as: o The phone number of the Pennsylvania Bureau of Consumer Protection in the Office of the Attorney General o Scope of work including specifications o Notice of Right of Rescission o Start/Completion date o Change Order notice o Contractor s registration number o Full address of Contractor (not just PO Box) o Notice of Insurance Deposits/Down Payments o Under the new law, you will only be able to accept 1/3 of the total contract amount as a deposit/down payment if the total contract sales prices is $ or more.

5 This must be clearly outlined in your contract as well. What if I don t comply? Criminal Offense o home Improvement Fraud This is a real offense, which carries the very real risk of jail time. Grading It can be graded, depending on the circumstances as either a misdemeanor or up to a second degree felony. Civil Penalties o Any violation of the Act by a home Improvement contractor will also constitute a violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law. As a result, consumers have the potential to recover treble damages (or three times the amount of the Consumer s actual damages) and attorneys fees from a contractor found to be in violation of the Act. o This means that regardless of the quality of work performed, a contractor could find himself liable for a violating the Act for failing to have a compliant agreement.

6 Even a small violation could make a contractor liable under the Act. This primer on the new Contractor s Law was written by Bryan W. Shook, Esquire. Attorney Bryan Shook has thoroughly researched this new law and is available to make sure you and your colleagues become compliant BEFORE July 1, 2009. On February 2, 2009, Attorney Shook became the first person, in Pennsylvania to copyright a contract that will help you operate legally and comply with the new Pennsylvania home Improvement Consumer Protection Act. Attorney Shook charges a flat rate of $ which covers the cost of the contract form as well as the telephone conversations necessary to ensure that your form includes all of the information specific to your company. This is a one time fee and you will have this contract as a Microsoft Word document on your computer and will be able to simply fill-in the details for every job you do.

7 The advantages are that you ll have a very professional contract that WILL set you apart from your competition and a contract form template that will facilitate your compliance with this law. Finally, although this is a Consumer Protection law, the contract form which Attorney Shook has developed employs basic legal principles that work to benefit the contractor while still complying with the law. This contract was drafted, from scratch, with contractors in mind, from the beginning, not vice-versa. More information can be found at Attorney Shook can be reached by email at or by telephone at (717) 975-9446 or toll-free at 1-800-287-1202. Don t be left behind or find yourself not getting paid for jobs because your contract was invalid or you did not register at