The Pennsylvania Home Improvement Consumer Protection Act – A Contractor’s Scare and the Consumer’s Prayer

CHRISTOPHER J. KALBFELL, ESQ., FITZPATRICK LENTZ & BUBBA, P.C.

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. However, home improvement contracts are given special treatment under Pennsylvania’s Home Improvement Consumer Protection Act (HICPA).

True to its name, HICPA aims to protect homeowners from various fraudulent and deceptive practices by home improvement contractors. HICPA imposes strict requirements on home improvement contracts, and contractors provide additional protections to consumer homeowners and impose potentially steep penalties against home improvement contractors who fail to comply. HICPA can be both a sword and a shield for the consumer homeowner hiring someone to conduct a home improvement. While HICPA aims to protect consumer homeowners from badacting contractors, contractors who are well-versed in HICPA's requirements can avoid its pitfalls, avoid harsh penalties, and go into projects with confidence knowing their contracts are compliant.

Anyone who owns or operates a home improvement business or offers performs or agrees to perform home improvements in Pennsylvania is considered a "home improvement contractor" covered by HICPA. There are two significant exceptions: small contractors (those who perform less than $5,000 of work in the previous taxable year) and large retailers (with a net worth of more than $50 million) are expressly excluded. All home improvement contractors must register with the Office of Attorney General and be assigned a home improvement contractor registration number.

HICPA imposes a monetary threshold and only governs contracts for which the total cash price of all work agreed upon between the contractor and owner is more than $500. Further, the services must fall within HICPA's definition of "home improvement," which includes several categories of services such as repairs, replacements, demolition, removal, renovation, and modernization. Further, home improvements extend beyond the home itself, such as the construction improvement of swimming pools, porches, decks, driveways, and fences. Notably, HICPA does not cover other types of contracts, such as those for the construction of new homes or the sale of goods or materials in connection with a home improvement contract.

Home improvement contracts must strictly adhere to the following specific requirements and include the following information to be valid and enforceable against homeowners:

» Must be in writing, legible, and contain the entire agreement between the parties. » Must be signed by the homeowner or his agent and the contractor or salesperson on behalf of the contractor. » The home improvement contractor must agree to maintain liability insurance covering personal injury in an amount not less than $50,000 and insurance covering property damage caused by the work of a home improvement contractor in an amount not less than $50,000 and identifies the current amount of insurance coverage maintained at the time of signing the contract.

» Must include the following items: • The home improvement contractor's name, address, telephone number, and registration number. • The names, addresses, and telephone numbers of all subcontractors on the project known at the date of signing the contract.

• The date of the transaction.

• The approximate start and completion date of the home improvement project. • A description of the work to be performed, the materials to be used, and a set of specifications that cannot be changed without a written change order signed by the owner and the contractor.

• The total sales price due under the contract or includes a time and materials provision wherein the contractor and owner agree in writing to the performance of the home improvement by the contractor and payment for the home improvement