Are you a home improvement contractor? Have you agreed to perform home improvement work? Are you certain that the agreement you have made with your customer is valid and enforceable?
What is HICPA?
HICPA, or Home Improvement Consumer Protection Act imposes requirements on home improvement contractors. Such requirements include contractors’ registering with Pennsylvania’s Office of Attorney General, obtaining a registration number, and paying the necessary registration fees. Additionally, HICPA sets forth what terms must be included in an agreement between home improvement contractor and the homeowner to ensure that agreement is valid and enforceable.
Contracts to conduct home improvement work must comply with HICPA. Pennsylvania passed this act to provide consumers with guaranteed protections against fraudulent contractors. If your agreements and ensuing home improvement work fail to comply with HICPA standards, then you may be exposed to civil and even criminal liability.
Should a homeowner initiate litigation against a home improvement contractor for failing to meet HICPA’s requirements, HICPA also details the possible penalties that can be levied on the contractor.
Does HICPA apply to me?
If you’re a contractor engaged in an agreement to perform home improvement work, then HICPA almost certainly applies to you. HICPA lists very broad definitions for what constitutes both a “contractor” and “home improvement work.” Specifically, under HICPA, a contractor not only means any person who owns or operates a home improvement business, but also includes any person who simply undertakes or agrees to perform home improvement work.
Virtually any job that can be performed on your home equates to home improvement work. HICPA considers any repair, replacement, remodeling, demolition, removal, renovation installation alteration conversion, modernization improvement, rehabilitation, or sandblasting to apply under the statute.
These tasks extend beyond a consumer’s primary residence, as HICPA also applies to work involving driveways, swimming pools, pool houses, porches, garages, roofs siding, insulation. Solar energy systems security systems, flooring, patios, fences gazebos, sheds, cabanas, painting, work on doors and windows, and waterproofing.
Are there any instances when HICPA would not apply to a home improvement job?
There are some narrow exceptions when HICPA does not apply to a home improvement contract. Despite the broad definition of a contractor under the statute, HICPA does not cover a contractor who failed to earn $5000.00 worth of home improvements the previous taxable year.
And, remember, HICPA applies to home improvements, and therefore does not apply to new construction of a home, or to the conversion of a commercial structure into residential or non-commercial structures. Also, HICPA explicitly excludes transactions regarding the sale of appliances.
OK, so HICPA applies to me. What am I required to do?
In addition to registering your contracting business with the Pennsylvania Office of the Attorney General as mentioned above, you must include several mandatory terms in every home improvement contract. In order for the home improvement contract to be valid and enforceable, the contract must include:
- Your registration number;
- Signatures of the homeowner his agent, or other contracted party;
- Your signature or the signature of a salesperson on your behalf;
- Attachments of copies of all required notices;
- Your name, address, and telephone number (no Post Office boxes!);
- Approximate starting date;
- Approximate end date;
- Description of work to be performed, the materials used, and a set of specifications that cannot be changed without a written change order signed by both you and the homeowner;
- Total sales price, or a relevant time and materials provision;
- Amount of any down payment;
- Names, addresses, and telephone numbers of all subcontractors known on the date of signing the agreement; and
- Notification that the homeowner can rescind the contract, without penalty, within three days after signing.
This list is not meant to be exhaustive, and you should contact a Contractor Lawyer for a more comprehensive review of your home improvement contracts.
Is there any language I should avoid including in my home improvement contract?
Yes! Certain clauses will void an entire home improvement contract even if the remainder of the agreement is enforceable. These voidable clauses include:
- Hold harmless clause;
- Waiver of federal, state, or local health, life, safety or building code requirements;
- Confessions of judgment;
- Waiver of any right to a jury trial in any action brought by or against owner;
- A provision by which the owner agrees not to assert any claim or defense arising out of the contract;
- A provision that the contractor shall be awarded attorneys’ fees and costs;
- A clause that relieves the contractor from liability based on acts committed by the contractor or its agents;
- Waiver of any other rights guaranteed elsewhere in HICPA; and
- A provision providing or the automatic or recurring renewal of any provisions of the home improvement contract, save for some very narrow exceptions.
Again, the above list is not exhaustive, and you should contact a legal professional to better ensure that your home improvement contract is HICPA compliant.
Besides including the proper language in a home improvement contract, what other concerns should I have?
HICPA also details conduct that constitutes consumer fraud. Fraudulent conduct, such as providing misleading statements to induce a homeowner to enter into a contract or pay more than a previously agreed upon price is specifically prohibited. HICPA further bars the damaging of a homeowner’s property as a means of engaging in further home improvement work, and similarly forbids a contractor from purposefully concealing his or her name, as well as the name of any salespersons, the contractor’s business, or other identifying information. If a contractor changes any identifying information after signing a home improvement contract, including changing insurance information, the contractor must provide notice of the change to the homeowner within 10 days after making the change.
HICPA also explicitly disallows a contractor from accepting advance payment for services and then failing to perform the work specified in the agreement in the absence of some extreme circumstances or failure to mutually agree to extend the time frame of the agreement In fact, HICPA bars a contractor from demanding any payment before the home improvement contract is signed.
A contractor cannot abandon or otherwise fail to perform a home improvement contract he or she has undertaken without justification. If a contractor fails to start a home improvement job for any reason, then the homeowner can demand full repayment of any amounts paid when 45 days from the contractual start date has passed.
Any deviation from the specifications in a home improvement contract without a written change order signed and dated by both parties is also prohibited. HICPA requires such a change order to include the price changes for each variation.
What are the consequences of HICPA violations?
Violating many of HICPA’s provisions amounts to a third degree felony if the amount involved exceeds $2000.00. If the victim is 60 years or older, HICPA requires advanced criminal grading. Subsequent HICPA violations will be a second degree felony regardless of the amount involved. Further, HICPA’s sentencing guidelines also allow a court to revoke a contractor’s certificate of registration.
How do I remedy what may be a HICPA violation?
Typically, you will need to identify what, exactly, is missing in a home improvement contract, and then address the noncompliance with the homeowner. A written change order, signed and dated by both you and the homeowner, may be the most efficient means of curing defects. However, change orders are not always the answer. There is no one-size-fits-all solution to HICPA violations, and you should contact a lawyer to obtain the safest and most complete outcome.