Home Improvement and Consumer Protection Act
What is the Home Improvement Consumer Protection Act?
Pennsylvania’s Home Improvement Consumer Protection Act (“HICPA”) seeks to level the playing field for homeowners in relation to contractors and home improvement contracts. In the past few years, contractors who specialize in home improvement have seen a tremendous increase in business and activity. However, home improvement contractors can be anyone – no specialized training is required to hold yourself out as a “home improvement” contractor. I have seen a great deal of small businesses pop up, in recent years, which purport to offer home improvement contracting services.
HICPA is a Pennsylvania statute designed to protect consumers from fraudulent and deceptive practices by home improvement contractors. Enacted in 2009, the Act requires home improvement contractors to register with the Bureau of Consumer Protection of the Pennsylvania Attorney General's Office and mandates specific requirements for home improvement contracts. After registration, the contractor will receive a registration number which must be included and stated on all ads, contracts, and estimates involving the contractor.
“Home Improvement” per the HICPA generally includes repair or construction on the property. Landscapers are typically not subject to the HICPA unless their work involves the construction, replacement, installation, or improvement of buildings, driveways, swimming pools, porches, garages, roofs, flooring, patios, fences, doors, lighting systems, windows, and concrete walkways. The Act excludes certain entities, such as home improvement retailers with a net worth exceeding $50 million, from some of its requirements. § 517.7. Home improvement contracts.
Under HICPA, a home improvement contract must be in writing, signed by both the owner and the contractor, and include detailed information such as the total sales price, the approximate starting and completion dates, a description of the work to be performed, the materials to be used, and the names, addresses, and telephone numbers of all subcontractors involved. See § 517.7. Home improvement contracts.
You should be aware of important legal rights and remedies you have as a consumer involved in a home improvement contract. Firstly, the Act also provides consumers with a right of rescission, allowing them to cancel the contract within three business days of signing without penalty. § 517.7. Home improvement contracts. An arbitration clause within a contract can be set aside by a court, and generally is not valid unless it is typed in capital letters, on 12-point bold font, a separate line for signature, and it must state whether any potential arbitration award is binding.
Secondly, certain clauses in home improvement contracts can render the entire contract voidable by the homeowner. Specifically:
(1) A hold harmless clause;
(2) Waiver of government code requirements;
(3) Confession of judgment clause;
(4) Waiver of a right to a jury trial;
(5) Agreement to waive any claim or defense;
(6) A provision that says contractor shall be awarded attorneys fees and costs in the litigation; or
(7) A waiver of any rights provided under this act
HICPA also criminalizes home improvement fraud and lists prohibited acts, such as making false or misleading statements to induce a contract or failing to perform services after receiving advance payment § 517.8. Home improvement fraud. The Pennsylvania Attorney General’s Office is particularly proactive in prosecuting home improvement fraud, as is the Pennsylvania State Police.
Lastly, and very importantly, violations of HICPA are also considered violations of the Unfair Trade Practices and Consumer Protection Law. § 517.10. Unfair Trade Practices and Consumer Protection Law. A violation of HICPA, therefore, may allow a court to award triple damages.
Overall, HICPA aims to create a centralized database of registered contractors, ensure transparency in home improvement contracts, and provide legal recourse for consumers against unscrupulous and shady contractors. Mid-Atlantic Sys. of WPA v. Tax Office of Monroeville, 204 A.3d 579.
