Home Improvement and Consumer Protection Act – HICPA
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.
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.
HARSH PENALTIES
A contractor who fails to comply with key provisions of the Act may suffer the following:
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.
KEY EXCLUSIONS:
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).
FREE CONSULTATION
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.
