Pennsylvania Enacts “Home Improvement Consumer Protection Act”

November 3, 2008

On October 17, 2008, Governor Edward G. Rendell signed into law the new Pennsylvania Home Improvement Consumer Protection Law (HICPL), effective as of July 1, 2009. According to a news release issued by the Attorney General of Pennsylvania, the new law is intended “to protect consumers from unscrupulous contractors, provide new protection for consumers who hire home improvement contractors and authorize criminal penalties for home improvement fraud.”

Pursuant to the new law, as of July 1, 2009, all home improvement contractors are required to:

  1. Register with the Bureau of Consumer Protection of the Pennsylvania Attorney General
  2. Disclose if contractor has been convicted of any crime, home improvement fraud, filed for bankruptcy or had a judgment entered against the contractor arising from a home improvement transaction in the past 10 years
  3. Maintain liability insurance in an amount not less than $50,000
  4. Disclose if the contractor has ever had its license revoked or suspended by any state or court, and the current status of all licenses from other states
  5. Include the contractor’s state registration number in every advertisement, estimate, proposal and contract
  6. A toll-free telephone number will be maintained by the Bureau of Consumer protection to check if a home improvement contractor is registered, as well as the department Web site
  7. No home improvement contract will be valid or enforceable unless it:
    • is in writing, legible and contains the contractor’s registration number
    • contains the approximate starting date and completion date for the work
    • 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 home owner
    • includes the total sales price due under the contract
    • includes the toll-free number of the Pennsylvania Bureau of Consumer Protection
    • includes the three-business-day notice of the right of rescission pursuant to the Pennsylvania Unfair Trade Practices and Consumer Protection Law. The new act creates criminal penalties for home improvement fraud, making a violation a potential felony or misdemeanor, and includes a penalty enhancement for home improvement fraud committed against persons 60 years or older
    • prohibits deposits in excess of one-third (1/3) of the contract price in home improvement contracts in excess of $1,000, plus any special order materials
  8. Any violation of the HICPL also constitutes a violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law, which provides for the potential recovery of three times the consumer’s actual damages and attorneys’ fees.

This new law provides greater protections to consumers and the elderly who may have been hurt by unscrupulous home improvement contractors.