Pennsylvania has enacted the Home Improvement Consumer Protection Act (“HICPA”). This Act establishes a mandatory registration program for contractors who offer or perform home improvements in Pennsylvania. While designed to protect consumers from unscrupulous contractors, the Act also places significant burdens, costs and restrictions on almost every contractor which may lead to additional costs to the same consumer the Act is trying to protect.
HICPA applies to any contractors who do over $5,000.00 and under $50 million of home improvement business annually. “Home improvement” is defined very broadly to include almost any type of improvement on land which is used or designed to be used as a private residence. Home improvement may include landscapers, architects and engineers if these individuals/businesses perform home improvements as part of their responsibilities.
HICPA requires that any contractor must register initially by July 1, 2009 to receive a registration number in Pennsylvania. Thereafter, contractors must renew the registration every two years. Further, for any contract over $500.00, HICPA provides very specific requirements for agreements with consumers, including the requirement that all contracts be in writing. If the requirements of HICPA are not followed by a contractor, any contract could become unenforceable or void resulting in the inability of the contractor to collect under the terms of the contract and potentially subjecting a contractor to civil and criminal penalties for his/her failure to comply with the requirements of HICPA. HICPA also sets forth specific contract terms which are now void and unenforceable. Accordingly, in addition to having an attorney review the registration to ensure that all requirements are followed, all contractors should have an attorney review their existing contracts to ensure that the new Act is complied with.
In addition to setting forth the requirements for registration and written contracts, HICPA also provides for both criminal and civil penalties for the failure to comply with the new Act. Home improvement fraud can be prosecuted as a misdemeanor or third degree felony and can result in the revocation or suspension of a contractor’s certificate. In addition, any lawsuits and judgments against a contractor must be set forth in the application for registration or re-registration for a contractor’s certificate number. Further, any violation of HICPA is now a violation of the Pennsylvania Unfair Trade Practices Consumer Protection Law.
Moving forward, all contractors should immediately register with the State Attorney General’s Office and every contractor must ensure that its form contracts comply with the specific requirements of HICPA. Due to the harsh penalties imposed by HICPA, contractors will want to have their contracts reviewed by an experienced attorney. DBYD is a full-service law firm whose attorneys stand ready to ensure compliance with HICPA. Further, any consumers will want to ensure that their written contracts for home improvements comply with the requirements of HICPA and if a violation of HICPA occurs that all potential means of collecting from a contractor are utilized.
If you have any questions or concerns regarding HICPA, please contact Eric C. Frey, Esquire.
*This article was published by Dischell Bartle Yanoff & Dooley, P.C. It does not, and is not intended to, constitute legal advice. Your receipt of this publication does not create or constitute an attorney-client relationship. You should not consider this publication to be an invitation for an attorney-client relationship, you should not rely on the information provided in this publication without first obtaining separate legal advice, and you should always seek the advice of competent legal counsel in your own state. This publication should not be viewed as an offer to perform legal services in any jurisdiction other than those in which DBYD's attorneys are licensed to practice. DO NOT send DBYD any information concerning a potential legal representation until you have spoken with one of DBYD’s attorneys and obtained authorization to send that information.