Thinking about a Home Improvement?  Things you should know about Home Improvement Contracts.

Dean E. Reynosa Saidis, Flower & Lindsay (high resolution photo)

In order to provide greater protection to consumers who will be investing in home improvements, the Pennsylvania Legislature enacted the Pennsylvania Home Improvement Consumer Act.  The Act became effective July 1, 2009.

As of July 1, 2009, the vast majority of contractors who own a home improvement business or who perform home improvement work must register with the Office of Attorney General in Pennsylvania.  Only contractors who perform less than $5,000 in home improvement work a year and the large home improvement retailers, such as Home Depot, are not required to register.  The Pennsylvania Office of Attorney General maintains a website, http://www.attorneygeneral.gov/hicsearch/, which allows consumers to review the credentials of home improvement contractors in your area.  It is advised that every consumer review this website prior to choosing a contractor.

This legislation only governs home improvement contracts; therefore, contracts for the construction of new homes are not governed by this legislation.  However, the term “home improvement” is broadly defined.  Home improvement contracts consist of any work in or around a private residence or a building used as a private residence, which costs more than $500.  This includes any work completed in the house such as renovations, repair work, remodeling, installation, and any other types of alterations or improvements.  Additionally, home improvement contracts include the construction, installation, replacement, or improvements outside the house such as work to drive ways, garages, fences, swimming pools and other work around the house.  Most forms of landscaping are also considered a home improvement.  Unless it is a contract for the construction of a new home, it is most likely considered a home improvement.

Most importantly, the Act provides certain rights to the consumer.  The following list highlights consumers’ rights and the information that each contract must contain:

1. Right of Rescission:  Every consumer has the right to change their mind within three business days and to cancel the agreement.  If a consumer cancels an agreement within three business days, the consumer will not suffer any penalties.
2. Description of Work:  The contract must specifically describe the work to be performed, the materials to be used and provide a set of specifications.  Neither the materials nor the work to be performed may be changed without a written change order signed by all parties.
3. Total Sales Price and Payment Terms:  The contract must separately list any down payments, any payments advanced for the purchase of special order materials, and the total sales price.  The contract should contain a list of the individual costs for each special order item.  Lastly, it is important to understand that no contractor can require you to make any sort of payment prior to signing the contract.
4. Work Performance Dates:  Every home improvement contract should contain the approximate starting date and completion date of the project.  These dates are not set in stone; however, these dates resemble an approximation of the expected time of completion.

Additionally, certain clauses are not considered valid if contained in a home improvement contract.  Some home improvement contracts may still contain these voidable clauses; therefore, consumers should be aware of these clauses.  The following clauses are the most likely to be found in a home improvement contract, which are now considered not valid:  Hold Harmless Clause; Waiver of Building Code Requirements; Confession of Judgment; Waiver of Right to a Jury Trial; Assignment of or Order for Payment of Wages; Agreement not to Assert any Claim or Defense; Attorney Fees and Costs; and Waiver of Any Rights; Automatic Renewal (unless this clause provides for proper notice to the Consumer).

What happens if a consumer enters into a home improvement contract that does not contain all of the required information or contains a voidable clause?  If the contract contains a voidable clause, that clause would be unenforceable against you.  If the contractor fails to include any required information such as the approximate starting date and completion date, then the home improvement contract will not be valid or enforceable against the consumer and the consumer would want to consult an attorney.  However, if the consumer waits until the contract is complete and refuses to pay, the contractor may have other legal remedies to recover for the completed work. 

This article is not intended as legal advice, but rather as an informative tool to those who are considering home improvements.

For more information regarding this news release, please contact Jason Kelso, Esquire at 717-243-6222 or jkelso@sfl-law.com, or visit our web site at www.sfl-law.com