The Pennsylvania Home Improvement Consumer Protection Act
With the overwhelming rash of repair work that will be needed to take care of the damage caused by
one of the worst winters on record, many people will be looking for contractors to do work on their
homes. But who should they hire? Will hiring a contractor registered under the state's recently
enacted Pennsylvania Home Improvement Consumer Protection Act allow them to move forward with
Pennsylvania begins its first full year with this new law that requires contractors who conduct any sort
of home improvement to register with the Bureau of Consumer Protection, which is part of the
Attorney General's Office. However, the question is how much does this new law really protect you,
the consumer? Unfortunately, there are many homeowners who thought that being registered meant
that the state had approved these contractors and the quality of the work they do. Many of these
homeowners have since found out that is not the case.
While the law represents a first step in the right direction, consumers should not allow it to give them
a false sense of security. Smart consumers still need to do their homework in order to protect
themselves. A quick look at what the law does and does not do will tell you why.
For years, it has been said that "all you need to be a contractor in Pennsylvania is a hammer and a
pick-up truck." Perhaps that has been one of the reasons that the majority of Pennsylvanians are not
pleased with the quality of the work done on their homes. A national survey found that fifty percent of
people would not recommend their contractor to another person. In Pennsylvania, the odds are even
worse because, until now, there was no registration, licensing or certification process.
Many states have licensing and certification requirements for contractors. Most require the contractor
to take some kind of written or physical test. Some require a contractor to be bonded with the state.
Until last July, Pennsylvania was one of the few that did not require anything. At least now,
Pennsylvania requires a contractor to be registered. What does registration mean, who needs to be
registered, and how does the registration system ensure accountability? Can a registered contractor
be trusted to treat you, your home and your property with the respect and care you expect and
Under the new law, essentially all improvements to your home and property must be done by a
registered contractor. With the exception of landscapers, anyone making more than $5,000 a year
doing construction, installation, or work dealing with non-decorative structures, must be registered
with the state.
To register with the state, a contractor must provide his name, address, phone number, date of birth,
driver's license number, and the address, name, and description of his business. He must also
provide the names of all his business partners. The State also requires a statement on whether the
individual applying has ever been convicted of a criminal offense related to home improvement, fraud,
theft, or a crime of deception.
Registration costs a contractor $50 every two years. In return, the state provides a unique contractor
ID number. This number must appear in all written material and advertisements that carry the name
of the business. Most importantly, the number must appear on all contracts the company prints. If you
are considering a contractor who does not display his number, there is a real possibility that he is not,
in fact, registered with the state of Pennsylvania.
To prove reliability, a contractor must state whether or not he has filed for bankruptcy, or was decided
against in court for a home improvement complaint within the past ten years, and whether or not he
has ever been suspended or debarred from participating in any Federal, State, local, or not-for-profit
Lastly, a contractor must provide proof that he possesses a $50,000 liability insurance to cover any
damage to the home he is working on or any personal injury to the homeowner. Although it is
required by Pennsylvania employment law, a contractor does not have to prove that he has
Workman's Compensation insurance to cover his people who might get injured while working on your
One critical side note about contractor insurance: make sure your contractor has it. Do not risk simply
taking the contractor's word on this. A reliable contractor needs proper and adequate insurance
coverage to protect you. While $50,000 of liability insurance may seem like a lot, it is only a drop in
the bucket compared to the value of most homes. If the contractor accidentally burns your home
down, the maximum you'll get, assuming there are no other claims against him is $50,000. A
reputable contractor will have at least one million dollars worth of liability insurance to protect
Workman's Compensation insurance covers any employee of the contractor who happens to get
injured while working on your home. The contractor does not need to have this insurance on himself,
but he must have it on anyone who works for him. Consequently, every person who is working on
your property must be covered by Workman's Compensation insurance or have their own individual
Liability insurance policy and State registration number. If they do not and they get injured, you, the
homeowner, could be liable for their injuries. Additionally, most Homeowners' insurance policies
exclude contractor caused damage or injury from their coverage. Because they cannot assess the
risk associated with the contractor you hire, they rely on you to determine whether or not your
contractor is adequately insured.
The law provides for an internet-accessible database which lets you know if a contractor is registered
and if he has any kind of criminal background. That is it! The database does not provide any
assessment of the reliability of the contractors. There is no way to tell if a contractor has left behind a
string of unsatisfied customers and shoddy workmanship. Being registered is no assurance of quality,
professionalism or honesty! Anyone can register today as a contractor with absolutely no training or
experience. On the state's database, there is no difference between that person and an established,
reputable company. So don't expect the state to protect you. It is still up to you to protect yourself.
The laws defining home improvement fraud are equally weak. Essentially, fraud is committed when a
contractor misrepresents the real cost of a job, fails to do the work he is paid to do, or deviates from
the written and signed contract's plans, specifications and costs without a written change order. When
a contractor misrepresents his skills or does a hackneyed job, he does not violate the definition of
home-improvement fraud outlined in the law.
The problem with many home improvements and repairs is you can't see the end result until the work
is done. In most cases, at that point it is too late to get any remedy without a lot of time and
aggravation. A smart consumer spends the time upfront to make sure they have a reliable, qualified
In summary, while the new HICPA law is a step in the right direction, it is not the type of law that is
going to cure the ills caused by incompetent contractors. Don't be lulled into a false sense of security
that it does; that responsibility still lies with you, the homeowner. To get the kind of job you need,
want and expect, you must take control. Do your homework, educate yourself, understand your
options, and check out references. As with any major investment, it always makes sense to be a
Pennsylvania Contractors Insurance Policy