Pennsylvania Protects Homeowners From Being Victimized By Unscrupulous Contractors

Under HICPA, any contractor must register with the state. Among other things, the contractor must provide the names, home addresses, telephone numbers, driver’s license numbers, social security numbers, and all prior business names and addresses of the home improvement businesses operated by any individual maintaining an ownership interest in the company.

Disclosure Obligations for Contractors

Additionally, the contractor is obligated under HICPA to disclose if the company or its principals have ever been convicted of a criminal offense relating to a home improvement transaction, fraud, theft, deception or fraudulent business practices, have had any adverse judgments relating to a home improvement transaction, have ever sought bankruptcy protection, or have had a certificate or similar license issued by another state or governmental entity revoked or suspended.

How to Verify Contractor Registration

You can verify that a contractor registered under the HICPA online or by calling the state’s toll-free hotline,1-888-520-6680.

Insurance Requirements

HICPA also mandates that the contractor obtains and provides proof of liability insurance covering personal injury and insurance for property damage in a minimum amount of $50,000.

Contract Terms and Written Agreements

HICPA further places severe restrictions upon the terms and conditions of home improvement transactions. Such transaction must be memorialized in writing and contain the contact information for the contractor and all subcontractors that are known to the contractor as of the date of the signing of the contract, the total amount due for the work to be performed, the amount of any down payment to be advanced by the homeowner, the approximate starting date and completion date of the work, a description of the work to be performed and the materials to be used, the current amount of insurance maintained by the contractor at the time of signing the contract, the toll-free telephone number for the state agency in charge of enforcing HICPA, and a notice providing that the homeowner may rescind the contract within 3 business days of signing the contract.

Arbitration Clauses and Payment Limits

If the contractor includes an arbitration clause in the contract, that clause must be displayed in the contract in capital letters, 12-point, bold face type, on a separate piece of paper, contain a separate line for the homeowner to sign and date, and state whether the clause is binding or can be appealed.

HICPA also prohibits a contractor from including a contractual provision allowing for an award of attorney fees and costs or requiring the homeowner to pay a down payment in excess of 1/3 of the contract price to the contractor.

Refund and Change Order Rules

A contractor is required to fully refund any amount paid by a customer within 10 days after the contractor receives a written request for refund if 45 days have passed since the work was to begin and no substantial portion of the work has been performed.

During the course of the work, a contractor cannot materially deviate from work plans or specifications as agreed upon in the contract without a written change order that contains the price change for the deviation.

Final Thoughts for Homeowners

Before you enter into a home improvement project with a contractor, you should make sure the contractor has complied with each and every obligation set forth under HICPA.