American House

Home Improvement Contracts.  

The Home Improvement Consumer Protection Act (“The  Act”) forever changed the relationship in Pennsylvania between home owners and those who agree to do home  improvement.  See 73 P.S. § 517.1, et seq. 



The Act took effect on July 1, 2009. Before that, there was no  requirement that an agreement for home improvement be in  writing. Contractors could get paid in full before commencing  any work. Contractors could also give rough estimates when  they might finish their work and they did not have to be  licensed or worry about any particular formalities. 



For any contract for home improvement between a home  owner and contractor entered into on or after July 1, 2009,  the agreement must be in writing and:

1. Include the start date, end date, contract price, description of the work, the name of the contractor,
his registration ID and numerous other items of information,  otherwise, the contract is not enforceable against the home  owner;

2. The writing must include a notice of rescission that  expressly allows the owner three business days to back out of  the agreement;

3. The contractor must give the home owner a copy of the  contract and notice of rescission before commencing the work;

4. Any modification must be in writing and expressly agreed  to be the home owner;

5. Refrain from including in the agreement an attorney fee  provision, arbitration clause (unless certain parameters exist),  or engage in other prohibited acts;

6. Accept more than 1/3 of the contract price (exclusive of  costs) upfront.

7. The contractor must carry liability policy and resulting  damage loss of at least $50,000 for the job.

The term “home owner” is broad enough to include double  unit properties and the owner of rents and does not occupy  the property.



A contractor who fails to comply with key provisions of the Act  may suffer the following:

1. A lost ability to enforce the contract, meaning, the  contractor can forget getting paid for any outstanding invoice  unless certain minimal compliance is shown;

2. Liability for the home owners damages times three (treble  damages) plus attorney fees, This is because, by statute, any  violation of the Act is, by definition, also a violation of  Pennsylvania’s Unfair Trade Practices and Consumer  Protection Law (“the UTPCPL”);

3. Criminal penalties and imprisonment, if the contractor  engages in misrepresentation or accepts more than one third  of the contract price upfront (exclusive of material costs).

4. The Act is a consumer protection law. The Commonwealth  of Pennsylvania maintains a database for every violation of  the act of non-compliance that results in a civil judgment. Plus,  the contractor can lose his license for failure to comply with  the Act.



All home contracts for home improvement between home  owners and contractors are covered under the Act, unless  expressly excluded, such as:

1. Emergency work (a big exception),
2. Contracts for less than $500.
3. New build jobs.
4. Certain types of plumbing.
5. Contracts entered into before July of 2009 (the Act took  effect on July 1, 2009, and thus it governs contracts entered  into on or after July 1, 2009).



Although the Home Improvement Consumer Protection Act  has been in effect since July 1 of 2009, relatively few home  improvement contracts comply with it. Contractors remain  vulnerable. Our firm focuses on this area and is monitoring  how the appellate courts interpret the Act. Our law office is  happy to provide a free consultation to both home owners to  fully protect your rights.


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