The Home Improvement Consumer Protection Act by gph47207


									The Home
Consumer Protection
    Steven A. Cotlar, Esq.
    Andrew D. Cotlar, Esq.
    Cotlar & Cotlar
    23 West. Court St.
    Doylestown, PA 18901
                              Tel: 215-345-7310
What We Will Talk About
    State registration
    Local registration
    Contract requirements
    Homeowner right of rescission
    Delivery of the contract
    Use of arbitration clauses
    Home improvement fraud
    Other prohibitions
    Penalties
Registration Required,
Effective July 1, 2009
  Internet or paper form being developed, Bureau of
   Consumer Protection, Office of Attorney General (717-
  Personal details and information re business over past
   10 years
  Criminal convictions
  Bankruptcy filings
  Civil judgments against applicant related to home
   improvement transactions
  Licenses suspended/ revoked in other jurisdictions by a
Registration Required,
Effective July 1, 2009, cont’d
  Suspensions or debarments from publicly
   funded programs (federal, state, local,
   nonprofit) related to home improvement
  Proof of liability insurance, $50K or greater
   (personal and property)
  Registrations in other states; must notify if
   there are any disciplinary actions
  $50 fee
  Renew every two years
Local Registration

  Not required anymore
  But municipalities can still require
   licensing for certain trades (e.g.
   electricians and plumbers, etc.)
General Requirements

  Include registration # in all
   advertisements, contracts, proposals,
  Use written, legible COMPLIANT contract
What Your Contract Must
    Registration number
    Owner and contractor signature
    Include all side agreements
    Include all notices
    Date of transaction
    Name, address and phone of
      contractor
      all subcontractors known at date of contract
      Not just a P.O. Box!!
What Your Contract Must
Include, cont’d
  Approximate start & end date
  Describe
    work to be performed
    materials to be used
    set of specifications that can’t be changed w/o
     written change order signed by owner and
  Total sales price due
  Amount of down-payment
  Amount advanced for purchase of special
   order materials (separate from above)
What Your Contract Must
Include, cont’d
  Agree to maintain $50K or more liability
   insurance (personal & property)
  Toll-Free number of Bureau of Consumer
   Protection 1-800-441-2555
  Notice of Right of Rescission
Right of Rescission

  Allows homeowner to cancel within 3
   business days after signing
Delivery of Contract

  Contract must be delivered to owner at
   time of execution with required notices
Arbitration Clause
  Generally, not recommended
    Expensive to enforce
    Not any quicker in some jurisdictions
    Discovery not allowed
Arbitration Clause
  Can be set aside for legal reasons (e.g. unconscionable,
   adhesion, etc.)
  Restrictions MUST be followed or clause is void
  Text in caps
  12 point bold
  On separate page from rest of contract
  Separate line for each party to assent
  Signature and date of all parties
  Date must be same as contract date!
  Must state whether binding or appealable
  Must state whether facts, documents and decision are confidential
Prohibited Clauses
(voidable by owner)
    Hold harmless
    Waiver of health, life, safety and building codes
    Confession of judgment
    Waiver of right to jury trial
    Assignment of or order for payment of wages or other
     compensation for services
    Waiver of claims or defenses
    Assessment of attorney fees and costs for the contractor
    Waiver of liability for collection or repossession of goods by
    Waiver of any rights provided by the act
    With exceptions, automatic renewal clauses
Home Improvement Fraud
Now a Crime!
  False and misleading statements
  Receive advance payment and fail to perform unless
  Misrepresent real name
  Damage property with intent to perform home
  Misrepresent yourself as agent of government
  Misrepresent an item as a special order item or the
   cost of a special order item
  Altering contract, mortgage or promissory notes without
   owner’s consent
  False or deceptive advertisements
Home Improvement Fraud,
  Criminalized as felony or misdemeanor
   depending on the amount
  Sentence is enhanced if owner is 60 or
  Penalties for repeated offenses
  Revocation or suspension of license
Other Prohibitions
  Failure to register
  Failure to refund amounts paid within 10 days of written
   notice (certified mail) if:
     No substantial work has been performed at time of refund
      request; AND
     More than 45 days have elapsed from the date work was to
      start (see contact)
  Accept or use occupancy certificate or proof of
   completion document if performance is incomplete
  Abandon a project without “justification,” unless the
   owner fails to pay or otherwise violates the contract
   [What if the GC doesn’t pay you as a sub? Is this
   justified? Probably.]
Other Prohibitions, cont’d
  Deviate from plans or specs without a written change order
      dated and signed by all parties
      must include price changes for each deviation
  Participate in home improvement contract where contract states
   higher $ obligation than actual price
  Advertise or offer to perform home improvements if you don’t
   intend to:
      accept a written contract
      make the improvements
      charge for the price
  Demand payment for home improvement before a contract is
  Receive a deposit in excess of 1/3 of the contract price (including
   special order items), unless total price is less than $1K
Other Prohibitions, cont’d

  Failure to credit owner’s payment
  After contract is made, changing the
    name of the business,
    insurance information,
    address or other identifying information
    in a fraudulent or deceptive manner likely to
     cause confusion or misunderstanding
    unless you provide notice in writing 10 days
What if you don’t comply?

  Any violations subject you to the Unfair
   Trade Practices and Consumer
   Protection Law
    Treble damages
    Attorney’s fees
Now What?

 ALWAYS use a written contract no
  matter how small the job
   Consult an attorney to make sure contract is
    compliant now– don’t wait
 NEVER work on a “handshake”
 Wait for registration to kick in on July 1,
Thank You
 Steven A. Cotlar, Esq.
 Andrew D. Cotlar, Esq.

 Law Office of Cotlar & Cotlar
 23 West Court St.
 Doylestown, PA 18901

 Tel: 215-345-7310

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