The Home Improvement Protection Act that took over Pennsylvania

In an effort to catch rogue contractors and stop their fraudulent actions, Pennsylvania has enacted the Home Improvement Consumer Protection Act. As of July 1, 2009, the Act requires all contractors who make $5,000 or more in home improvements annually to register with the Attorney General’s office. Registered contractors are now required to carry at least $50,000 of personal injury liability coverage and $50,000 of property damage coverage.

Registering with the Attorney General only costs $51, but the new law affects remodelers in other ways as well. For example, due to new consumer protection law requirements, construction contracts in Pennsylvania must be longer and more detailed. This has a downside for contractors, as a 17-page contract can seem very intimidating to a homeowner. Additional contract pages added to include additional and updated clauses in Pennsylvania law. For example, until now, contractors were required to provide a one-page right-to-opt clause in their contract. The new law identifies specific right-to-rescind language that must appear in 10-point bold type directly above the signature line. The arbitration clause does not apply if this notice of right to terminate does not appear in 10 points daring gentle.

The new law also requires a long list of disclosures to appear on each contract, such as the start and end date, subscriber names and addresses, insurance coverage, and even a phone number for the California Consumer Protection Bureau. Pennsylvania. Without these disclosures, a construction contract in Pennsylvania is null and void. Worse yet, if a home improvement contractor fails to comply with the Home Improvement Protection Act and a dispute ensues, the property owner is entitled to recover actual damages and attorney’s fees.

Home improvement contractors who break the law should be prepared to work for free if something goes wrong; the owner will have them on a barrel. And the fines are stiff: If the job is for more than $2,000, a violation can become a third-degree felony.

The Pennsylvania Home Improvement Protection Act can end up misleading remodeling customers who often choose their remodeling contractor based on bid price. Contractors who do not have insurance are unlikely to register with the state. These contractors will have less overhead and will appear attractive to bargain-hunting homeowners as they can easily be the highest bidder on many home improvement jobs. Registered contractors are required to carry property damage and liability insurance, which adds to the overall costs they must add to their bids.

Pennsylvania is unique in its strict homeowner protection requirements for remodelers and contractors. It represents a new burden for the contractor: not only does he have to carry at least $50,000 of personal injury liability coverage and $50,000 of property damage coverage, but now he has to hand a potential client a 17-page contract that can be a deal breaker. – even if required by Pennsylvania law. And for this contract he has to hire a lawyer who is well-versed in the changes in Pennsylvania contract law. The new law has made Pennsylvania lawyers very happy.

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