Contract Requirements for Home Improvements

December 3, 2018 Posted in Articles Share

Whether you are a Homeowner planning to have work conducted on your home or a Home Improvement Contractor, the Home Improvement Consumer Protection Act (HICPA) contract requirements are something you should be familiar with. The HICPA was enacted in 2008 in an effort to prevent, among other things, Contractor’s Home Improvement Fraud. The HICPA required all contractors to register with the Bureau of Consumer Protection of the Pennsylvania Attorney General. HIPCA further requires any Home Improvement Contract meet the following, in order to be enforceable against a Home Owner:

1. Contract be in writing and contain the home improvement contractor registration of the performing contractor
2. Be signed by the owner (or their agent) and the contractor or a salesperson on behalf of a contractor
3. Contains the entire agreement between the owner and the contractor, including attached copies of all required notices.
4. Contains the date of the transaction.
5. Contains the name, address and telephone number of the contractor. For the purposes of this paragraph, a post office box number alone shall not be considered an address.
6. Contains the approximate starting date and completion date.
7. 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 owner and the contractor.
8. Includes the total sales price due under the contract or includes a time and materials provision wherein the contractor and owner agree in writing to the performance of the home improvement by the contractor and payment for the home improvement by the owner, based on time and materials. If the contract includes a time and materials provision:
   1. The contractor shall provide an initial cost estimate in writing to the owner before any performance of the home improvement commences.
   2. The contract shall state:
      1. The dollar value of the initial cost estimate for the services to be performed under the time and materials provision.
      2. That the cost of the services to be performed under the time and materials provision may not exceed 10% above the dollar value indicated in the initial cost estimate.
      3. The total potential cost of the services to be performed under the time and materials provision, including the initial cost estimate and the 10% referenced in clause (B), expressed in actual dollars.
      4. A statement that the cost of the services to be performed under the time and materials provision shall not be increased over the initial cost estimate plus a 10% increase without a written change order signed by the owner and contractor.

9. Includes the amount of any down payment plus any amount advanced for the purchase of special order materials. The amount of the down payment and the cost of the special order materials must be listed separately.
10. Includes the names, addresses and telephone numbers of all subcontractors on the project known at the date of signing the contract. For the purposes of this paragraph, a post office box number alone shall not be considered an address.
11. Agrees to maintain liability insurance covering personal injury in an amount not less than $50,000 and insurance covering property damage caused by the work of a home improvement contractor in an amount not less than $50,000 and identifies the current amount of insurance coverage maintained at the time of signing the contract.
12. Includes the toll-free telephone number.
13. Includes a notice of the right of rescission.

If any of these requirements are not included in a Home Improvement Contract, the contract will not be enforceable against the Home Owner. This could be a major turning point if any dispute arises between the Contractor and the Home Owner. In most cases it will act to preclude a Contractor from being able to file a Mechanics’ Lien, if they allege they are owed money on a home improvement project.

If you are a Homeowner and believe that there was a violation of the Home Improvement Consumer Protection Act or a Home Improvement Contractor who wishes to make sure they are in compliance with the Home Improvement Consumer Protection Act, please contact the Lawyers at The Law Offices of Edward J. McKarski for a free consultation.