How Does HICPA Protect Home Improvement Clients?
How Does HICPA Protect Home Improvement Clients?
Stories of others dealing with fraud, usually when someone steals credit card information, can be scary. But imagine trusting your home to a contractor, only to have them breach the contract and not finish the work that they were hired to complete. That’s fraud, too.
The Pennsylvania state government established the HICPA to deter contractors from taking advantage of clients.
What Is HICPA?
The Home Improvement Consumer Protection Act (HICPA) sets out to provide certain protections to home owners who hire home improvement contractors to work on their homes. Sometimes, contractors try to take advantage of home improvement contracts and charge without ever finishing the contracted work. The law has given home owners teeth to fight back when home improvement fraud occurs.
What Does HICPA Consider “Home Improvement?”
The HICPA defines “home improvement” broadly. But the basic parameters of “home improvement” come down to a few things.
The HICPA Home Improvement is work done on land with a private residence in which the total cash price of the work between a contractor and owner is more than $5,000.
Once that basic definition is met, home improvement is also more specifically explained as being any of the following.
- Repair, replacement, remodeling, demolition, removal, renovation, installation, alteration, conversion, modernization, improvement, rehabilitation, or sandblasting.
- Construction, replacement, installation or improvement of driveways, swimming pools, pool houses, porches, garages, roofs, siding, insulation, solar energy systems, security systems, flooring, patios, fences, gazebos, sheds, cabanas, certain types of landscaping (subject to the exceptions described below), painting, doors and windows, and waterproofing.
- Without regard to affixation, the installation of central heating, air conditioning, storm windows, or awnings.
Of course, there are exceptions to “home improvement” according to HICPA. Construction of a new home does not receive the HICPA protections and the purchase of items from a seller who does not perform the work to install them is also an exception.
Who Is A Contractor According to HICPA?
A contractor is anyone who owns a home improvement business and agrees to make any type of home improvement. HICPA applies to all contractors, even those who had home improvement businesses before HICPA was established. Subcontractors and independent contractors are also considered to be “contractors” according to HICPA.
However, HICPA explains that anyone who did less than $5,000 worth of home improvements in the previous taxable year or a retailer with a net worth higher than $50 million are not considered contractors under the law.
Does HICPA Apply To Out of State Contractors?
Absolutely. Any contractor who provides home improvement services in Pennsylvania is required to comply with HICPA.
How Can I Recognize A Registered Contractor?
The HICPA obligates contractors to register with the Pennsylvania Office of the Attorney General. If they meet the requirements of the law, they must register or be subject to penalties. A registered contractor must display its registration number on every advertisement, contract, or proposal offered to their client. With this registration number, possible clients can verify the registration by calling the Office of the Attorney General.
HICPA Fights Contractor Fraud
The Home Improvement Consumer Protection Act prohibits certain acts from the contractor when working with clients. Moreover, in disobeying HICPA, contractors could face criminal penalties. HICPA requires contractors to finish home improvement jobs for which they’ve been hired.
HICPA Protections for Home Owners
1. Contractors may not supply false statements with the intention of coercing a client to accept a contract at an increased price.
2. Misrepresentations of a contractor’s identity is against the law.
3. A contractor who fails to return advance payments when home improvement services are not completed is committing fraud.
4. Clients can demand that a contractor repays advance payment for home improvement services if no work has been done after 45 days have passed since the contractual start date.
5. Contractors are obligated by law to finish complete their home improvement contract and cannot abandon the work without justification.
6. HICPA sometimes considers a contractor violation as a violation not only of HICPA but also of the Unfair Trade Practices and Consumer Protection Law, meaning that a contractor might be liable for triple the damages along with attorney fees.
HICPA has no patience for home improvement fraud and criminalizes any type of behavior that could be fraud. For example, if a contractor required an advance payment of something over $2,000 and fails to provide the home improvement services, HICPA deems this act as a third degree felony. In the event that the homeowner is over 60 years old, this act immediately becomes a second degree felony. HICPA sees contractor fraud as no joke and strives to protect consumers of home improvement services.
Home Improvement Fraud Examples
Home improvement fraud is awful to experience, causing a whole litany of problems that weren’t a part of the original plan. After all, a home improvement client only wishes to see the project completed correctly in a timely manner. When that doesn’t happen, the client might need to pursue legal action. Here are a few contractor fraud cases.
The Hit-and-Run Contractor Fraud
Amelia paid a contractor $200,000, through her insurance company, to begin home improvements to her house. After a week of partial demolition, the contractor stopped showing up. When Amelia called to ask why they had not come back, the contractor informed her that he needed her to pay more money towards the final price. At this point, Amelia should contact a lawyer.
I.O.U. Contractor Fraud
Lewis hired a contractor to renovate his home and paid them the first half of the total cost of $40,000 when they signed the contract, detailing the work to be done. A month later, Lewis still hadn’t seen any work done on the home. He called his contractor, but he never heard back. A month and a half later when work still hadn’t been started, Lewis suspected fraud and contacted a lawyer to look into this I-owe-you contractor.
The Famous Contractor Misrepresentation
Bonnie loves watching home improvement celebrities, Drew and Jonathan Scott, on television. When she discovered a contractor who claimed to be affiliated with her favorite home improvement celebrities, she hired the contractor. Over three months, the contractor extricated over $60,000 from Bonnie and never got past demolition on her home improvements. That’s when she found out that her contractor had no connections with Drew and Jonathan Scott. Bonnie might have a lawsuit for misrepresentation.
Naturally, some of these examples might be extreme. However, home owners have been burned by contractor fraud of many different types. It’s important that home owners be aware of the HICPA rights available to them.
Report Violations of HICPA
When home improvement fraud might be occurring, home owners must consider their options for reporting HICPA violations. In many situations, victims are often encouraged to try to rectify the problem before seeking legal aid. However, when it comes to contractor fraud, contact a lawyer immediately. A lawyer knows what your legal options are and can direct you to the right course of action.
If you have experienced or recognize home improvement fraud, contact a lawyer who will know how to navigate your case and your rights under the law.