Home Improvement Contract Litigation

Under the Pennsylvania Home Improvement Consumer Protection Act, effective July 1, 2009 (the “Act”), every contractor engaged in home improvement work in Pennsylvania must register with the Bureau of Consumer Protection in the Office of the Pennsylvania Attorney General. A list of registered contractors can be found at here.. The license is renewable on a biennial basis. 73 P.S. § 517.5.

A “Contractor” is defined as including “[a]ny 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 any of the following:

• (1) 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.
• (2) 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.” After July 1, 2009, a contractor must include its registration number in all advertisements, contracts, estimates and proposals. 73 P.S. 517.6.

Homeowners have a limited right to cancel home improvement contracts under this Act. Except for “emergency” contracts (see 73 P.S. § 201-7), an individual signing a home improvement contract will be permitted to rescind the contract without penalty within three business days of the date of signing. NOTE: Landlords can be included as a “Homeowner.” A owner of a private residence “shall not be required to reside in the residence,” but cannot own “three or more private residences in this Commonwealth….” 73 P.S. § 517.2

“Home Improvement Fraud” is strictly prohibited. The Act defines “Home Improvement Fraud” as an act done with the “intent to defraud or injure anyone or with knowledge that he is facilitating a fraud or injury to be perpetrated by anyone….” See 73 P.S. § 517.8 for examples.

The Act renders some “arbitration” clauses set forth in home improvement contacts “void and unenforceable.” Arbitration clauses may be enforceable only if certain requirements specified in the Act are met. Additionally, the Act provides that certain clauses typically drafted by a contractor into a Home Improvement Contract such as a waiver of jury trial are now “voidable” by a Homeowner.

The information above is only a partial summary of some of the many important features of the Act. If you are a contractor in need of assistance to comply with the Act, or if you are a homeowner who has questions about a home improvement contract, please contact us for an appointment to discuss your concerns.