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Contractors: make sure you do this before performing ANY construction work in PA

by | Jun 5, 2024 | Firm News

Too many skilled contractors have come to me asking for help getting paid on excellent work they performed for customers who ultimately stopped or refused to pay them.  When I ask to see their Contract, they either did not make the customer sign on because “my word is good enough”, or the Contract is a basic form they made up or found online that does not follow the law in Pennsylvania.  Save yourself the time, trouble, and legal fees by doing the following on EVERY job:

  1. Registered as a Pennsylvania Home Improvement Contractor.

Pennsylvania has a Home Improvement Consumer Protection Act (also known as “HICPA”) which requires any contractor making at least $5,000 a year from home improvements to register with the Attorney General’s Office.  Performing any home improvement work without being registered leads to fines and allows the homeowner to recover 100% of anything paid for the work.  It also has very specific parameters for information that is required to be contained within the written contract for work, and failure to abide by the terms of the Act can also lead to fines and recovery of money paid (i.e. a minimum of insurance coverage for you for the work, and completion date specified within the contract).

You can register with the Commonwealth of PA here: Home Improvement Contractor Registration (attorneygeneral.gov)

  1. Make sure your contract terms follow the Home Improvement Consumer Protection Act.

Everything you tell the customer about the job should be placed in writing and signed by the customer BEFORE work begins.  It should all be documented on a contract that contains at least the following information:

  1. Your HICPA registration number, name, address and telephone number (no PO box)
  2. Date of work to be performed and date expected to be completed
  • Description of the work to be performed and requirement of a written change order for any changes in the work being performed
  1. Dollar value of the initial cost estimate
  2. That the cost of the work will not exceed 10% above the dollar value of the initial cost estimate (and do the math and show the amount)
  3. Identity of any subcontractors used by name, address and phone number
  • That you have liability insurance of at least $50,000
  • Toll free number of the PA Consumer Protection
  1. Includes right of recission of the contract within 3 business days

There are other requirements explained within the statute of the Home Improvement Consumer Protection Act so best to get a construction business attorney like ViKing Law familiar with the Home Improvement Consumer Protection Act and your needs to draft your contracts for residential home improvement work.

  1. Make sure you AND your subcontractors have insurance coverage.

If your subcontractor screws up on the job, you could be left paying for their costly mistakes.  It gets even worse if their mistakes cause injuries to someone else.  Always make sure they not only have the required insurance, but that it covers them and you for their work on the job.  Hiring a business lawyer like ViKing Law to write your subcontractor agreements will help prevent their ability to shift their liability to you.

  1. Always pull permits. Never agree to skip permits to save costs.

Never allow a homeowner or anyone else to convince you to save them or you money by not pulling the require permits.  Too many times I have seen townships walk into someone’s home, ask for a permit for the work obviously being performed, and when it cannot be produced, the entire project gets shut down, violations issued, and permit costs doubled.  If anything goes wrong with not just the work itself, but injuries or damages caused or related to the work, and it is discovered you did not pull permits, you as the contractor could get in serious trouble, including fines and even losing your license to operate.  Do not risk it, get the permits, always.

You might not always be able to avoid lawsuits, but following the above basic guidelines will give you the best chance at succeeding in Court.