OVERVIEW OF THE PENNSYLVANIA HOME IMPROVEMENT CONSUMER PROTECTION ACT, 73 P.S. §§ 517.1-517.19
Who is a Contractor?
Any person who owns and operates a home improvement business or who undertakes, offers to undertake or agrees to perform any home improvement.
The term includes a subcontractor or independent contractor who has contracted with a home improvement retailer, regardless of the retailer’s net worth, to provide home improvement services to the retailer’s customers.
The term does not include a person for whom the total cash value of all of that person’s home improvements is less than $5,000 during the previous taxable year or a home improvement retailer having a net worth of more than $50,000,000 or an employee of that retailer that does not perform home improvements.
What is Home Improvement?
The term includes all of the following done 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:
(1) Repair, replacement, remodeling, demolition, removal, renovation, installation, alteration, conversion, modernization, improvement, rehabilitation or sandblasting.
(2) 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, landscaping of a type that is not excluded under section 6 below, painting, doors and windows and waterproofing.
(3) Without regard to affixation, the installation of central heating, air conditioning, storm windows or awnings.
The term does not include:
(1) The construction of a new home.
(2) The sale of goods or materials by a seller who neither arranges to nor performs, directly or indirectly, any work or labor in connection with the installation or application of the goods or materials.
(3) The sale of services furnished for commercial or business use or for resale, if the service takes place somewhere other than at a private residence.
(4) The sale of appliances, including stoves, refrigerators, freezers, room air conditioners and others which are designed for and are easily removable from the premises without material alteration.
(5) Any work performed without compensation by the owner of the owner’s private residence or residential rental property.
(6) Any work performed by a landscaper certified by the Department of Agriculture under the act of December 16, 1992 (P.L. 1228, No. 162), known as the Plant Pest Act, except to the extent that the work involves any of the following at a private residence:
(A) 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.
(B) The placement of retaining walls, fountains or drainage systems.
(7) Emergency work pursuant to section 7 of the act of December 17, 1968 (P.L.
1224, No. 387), known as the Unfair Trade Practices and Consumer Protection Law. Pursuant thereto, there must be a bona fide immediate personal emergency of the buyer and the buyer must furnish the contractor with a separate dated and signed personal statement in the buyer’s handwriting describing the situation and expressly acknowledging and waiving the right to cancel the sale within three (3) business days; and
(8) The conversion of existing commercial structures into residential or noncommercial structures.
Requirements for Contractor
No person shall hold himself out as a contractor, nor shall a person perform any home improvement without first registering with the Bureau of Consumer Protection. You can go to www.attorneygeneral.gov/hic.aspx?=4340 to register.
A contractor must include its registration number in all advertisements distributed within the Commonwealth of Pennsylvania, as well as on all contracts, estimates and proposals with owners. This applies to all advertisements, contracts, estimates and proposals created by a contractor after July 1, 2009.
Home Improvement Contracts
I. Contract Requirements. NO Home Improvement shall be valid or enforceable against an owner unless it:
(1) Is in writing and legible and contains the home improvement contractor registration number of the performing contractor.
(2) Is signed by all of the following:
(i) The owner, his agent or other contracted party.
(ii) The contractor or a salesperson on behalf of a contractor.
(3) Contains the entire agreement between the owner and the contractor, including attached copies of all required notices.
(4) Contains the date of the transaction.
(5) Contains the name, address and telephone number of the contractor. (A post office box number alone shall not be considered an address.)
(6) Contains the approximate starting date and completion date.
(7) Includes 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.
(8) Includes the total sales price due under the contract.
(9) Includes the amount of any down payment plus any amount advanced for the purchase of special order materials. The amount of the down payment and the cost of the special order materials must be listed separately.
(10) Includes the names, addresses and telephone numbers of all subcontractors on the project known at the date of signing the contract. (A post office box number alone shall not be considered an address.)
(11) Agrees 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.
(12) Includes the toll-free telephone number of the Bureau of Consumer Protection. 1-888-520-6680.
(13) Includes a notice of the right of rescission. (See below.)
II. Right of Rescission. The contract must provide notice that the individual signing the home improvement contract, except as provided in the emergency situation as described above, is permitted to rescind the contract without penalty regardless of where the contract was signed, within THREE business days of the date of signing.
III. Copy to be provided. A contractor or salesperson must provide and deliver to the owner, without charge, a completed copy of the home improvement contract at the time the contract is executed which must contain all required notices.
IV. Arbitration Clause Requirements. If the contract contains an arbitration clause, it must meet the following requirements or be deemed void by the court upon motion of either party, filed prior to the commencement of arbitration:
(1) The text of the clause must be in capital letters.
(2) The text shall be printed in 12-point boldface type and the arbitration clause must appear on a separate page from the rest of the contract.
(3) The clause shall contain a separate line for each of the parties to indicate their assent to be bound thereby.
(4) The clause shall not be effective unless both parties have assented as evidenced by signature and date, which shall be the date on which the contract was executed.
(5) The clause shall state clearly whether the decision of the arbitration is binding on the parties or may be appealed to the court of common pleas.
(6) The clause shall state whether the facts of the dispute, related documents and the decision are confidential.
V. Provisions that cannot be in the Contract. If a home improvement contract contains any of the following clauses, the home improvement shall be voidable by the owner:
(1) A hold harmless clause.
(2) A waiver of Federal, State or local health, life, safety or building code requirements.
(3) A confession of judgment clause.
(4) A waiver of any right to a jury trial in any action brought by or against the owner.
(5) An assignment of or order for payment of wages or other compensation for services.
(6) A provision by which the owner agrees not to assert any claim or defense arising out of the contract.
(7) A provision that the contractor shall be awarded attorney fees and costs.
(8) A clause by which the owner relieves the contractor from liability for acts committed by the contractor or the contractor’s agents in the collection of any payments or in the repossession of any goods.
(9) A waiver of any rights provided under this act.
(10) A provision providing for the automatic or recurring renewal of any provisions of the agreement, unless:
(i) the contract establishes a procedure by which the owner can choose not to renew the provision or provisions, thereby avoiding any new fees or charges, by providing written notice to the contractor via first class mail postmarked no later than three business days prior to any renewal;
(ii) such procedure is clearly and conspicuously disclosed in the agreement; and
(iii) the contract includes a provision requiring the contractor to notify the owner of any automatic or recurring renewal, and the owner’s option to cancel such renewal, by mail, not earlier than 20 days and not later than ten days prior to the date of any such renewal.
For more information and to access a list of all registered contractors, please go to the Pennsylvania Attorney General’s website at: www.attorneygeneral.gov/hiccon.aspx?id=4502.