In October 2008, the Pennsylvania Legislature approved the Home Improvement Consumer Protection Act (HICPA) which requires contractors to register with the Bureau of Consumer Protection. The law also mandates certain terms and language for home improvement contracts, and codifies penalties for contractor fraud. 

Who does the act apply to? 

HICPA requires anyone who either claims to be a contractor, or performs home improvement work, to register as a contractor. The regulations of HICPA apply to all contractors, and make it a crime to fail to register as a contractor. However, the regulations do not apply to people who do less than $5,000.00 worth of home improvement work in a year, or large home improvement retailers. 

What does the act apply to? 

HICPA regulates home improvement contracts, which are not enforceable against an owner unless the contract meets HICPA requirements. 

The act also applies to fraudulent actions by a contractor, and makes it a crime to, among other things: receive prepayment without completing the work for which payment was given, solicit work under a misleading name, or misrepresent the cost of material. 

What does the act require? 

For a contract to be enforceable under HICPA, a contract must, among other things: be written, signed, and contain the entire agreement between the contractor and owner. The entire agreement includes starting and ending dates, descriptions of the work, materials used, and price. However, even if a contract is not enforceable, courts may award contractors payment for the reasonable value of work they have done. 

The act also makes contracts voidable by the owner if they contain, among other clauses: a waiver of building code requirements, waiver of the right to a jury trial in a legal dispute, or agreements by the owner not to bring a claim against the contractor in the future. 

What are the penalties under HICPA? 

Violators of the fraud provisions can be charged with a third degree felony if the amount involved is more than $2,000.00, or a misdemeanor if the amount involved is less than $2,000.00. However, the penalties are higher if the victim is over 60 years old. 

Contractors who enter into contracts with owners which do not comply with the regulations, as outlined above, will not be able to enforce those contracts.