Contractor Registration

Under the new Pennsylvania Home Improvement Consumer Protection Act, signed into law by Governor Ed Rendell on October 17, 2008, all home improvement contractors in the state are required to register with the Bureau of Consumer Protection in the Attorney General's office by July 1, 2009. 

• Begins: March 23, 2009
• Deadline: July 1, 2009.
• Where: Online at www.attorneygeneral.gov, or by mail.
• How Much: $50 Biennial (once every two years). $1.25 processing fee.

 Who is required to register?

• Home improvement contractors making over $5000 or under $50,000,000 annually.
• Home improvement contractors performing any repair, replacement, remodeling, demolition, removal, renovation, installation, alteration, conversion, modernization, improvement, rehabilitation or sandblasting on a private residence.
• This includes construction, replacement, installation or improvement of: Driveways, swimming pools, pool houses, porches, garages, roofs, siding, insulation, solar energysystems, security systems, flooring, patios, fences, gazebos, sheds, cabanas, landscaping (some excluded), painting, doors, windows, waterproofing, central heating, air conditioning, storm windows and awnings.

 Who is NOT required to register?

• Home improvement contractors making under $5000 or over $50,000,000 annually.
• Contractors of new home or commercial construction.
• Owners performing uncompensated self-improvements on their own home.
• Vendors of goods or materials who do not partake in their installation or application.
• Vendors of appliances which are easily removable without material alternation.
• Vendors of services not performed on home improvement site.

Home Improvement Contracts

Aside from calling for the mandatory registration of contractors, the Pennsylvania Home Improvement Consumer Protection Act also establishes a code of conduct for all home improvement transactions in the state. This includes a list of acts prohibited, penalties for non-compliance and extensive requirements for the drafting of home improvement contracts.

 What's different from past contracts I've used in the past?

• Registration Number: All new contracts or documents pertaining to your business will require your contractor registration number listed with the Bureau's toll-free number for directing consumer inquiries about your business.
• Insurance: You are now required to furnish proof of accident and property insurance on all contracts and maintain coverage totaling no less than $50,000 for each.
• List of Sub-Contractors: Your contracts must list all sub-contractors you employ, along with their contact information.
• Right of Rescission: This clause gives owner three days to cancel after signing of contract. Work cannot begin during this period.
• Work Order: A complete description of the work order for a contracted job must now be included in all contracts. This must also include materials and special order materials, along with pricing information and specifications.
• Change Orders: You are now required to document all changes to any initial quotes or statements on your contract. This includes changes in dates, materials, pricing or specifications on the work to be done.
• Advance Payment: For jobs over $1000 you can no longer receive over 1/3 of the total payment prior to the completion of the rescission period. This must be refunded within ten days in event of rescission/cancellation.

 What are the penalties for non-compliance?

• Criminal Penalties: Most violations of this act constitute home improvement fraud and are also punishable under the Unfair Trade Practices and Consumer Protection Act of 1968. Infractions under the Home Improvement Act, or use of a non-compliant contract, can result in suspension of your registration for up to five years, or even revocation, making it illegal for you to work in the state. Criminal violations may result in charges ranging from misdemeanors to a second degree felony. In cases of fraud, home owners can seek restitutions of up to three times the actual damages.
• Civil Penalties: Contracts not in compliance are void and unenforceable against the owner. This means that home owners are not required to pay for work done under a non-compliant contract. It also means that any complaints you charge against an owner are only legal under a compliant contract.