Pennsylvania Construction Law: What Contractors and Homeowners Must Know About HICPA

Whether you are a contractor building your business in Southeastern Pennsylvania or a homeowner planning a kitchen remodel, roof replacement, or addition, one statute shapes nearly every residential project in the Commonwealth: the Pennsylvania Home Improvement Consumer Protection Act (HICPA), Act 132 of 2008, 73 P.S. § 517.1 et seq. Understanding HICPA can protect a homeowner's investment and a contractor's right to get paid.

HICPA at a Glance

• Contractor registration: Contractors who perform $5,000 or more in home improvements per year must register with the Pennsylvania Office of Attorney General. Registration costs $100 every two years, and the registration number must appear on all contracts, estimates, proposals, and advertisements.
• Insurance: Registered contractors must carry at least $50,000 in personal injury liability insurance and $50,000 in property damage insurance (73 P.S. § 517.4).
• Written contracts: For home improvement work over $500, a contract is not valid or enforceable against the homeowner unless it is in writing, legible, and contains the information HICPA requires, including the registration number, total price, a description of the work and materials, approximate start and completion dates, and the contractor's insurance information (73 P.S. § 517.7).
• Three-day right to cancel: Homeowners may rescind a home improvement contract without penalty within three business days of signing.
• Deposit limits: On contracts over $1,000, a contractor generally may not accept a deposit greater than one-third of the contract price, plus the cost of special order materials (73 P.S. § 517.9).
• Penalties: Home improvement fraud is a crime, a third-degree felony where the amount involved exceeds $2,000 (73 P.S. § 517.8). Other violations are treated as violations of Pennsylvania's Unfair Trade Practices and Consumer Protection Law (UTPCPL), which can expose a contractor to damages and attorney's fees (73 P.S. § 517.10).

What HICPA Means for Contractors

A noncompliant contract can make it difficult to enforce payment terms against a homeowner. In Shafer Electric & Construction v. Mantia, 96 A.3d 989 (Pa. 2014), the Pennsylvania Supreme Court held that HICPA does not bar a contractor from seeking recovery under quantum meruit when there is no valid contract under the Act, but relying on that remedy is costly and uncertain. The better approach is prevention: keep your registration current, use HICPA-compliant contract templates, document change orders in writing, and stay within the deposit limits.

What HICPA Means for Homeowners

Before you sign, verify the contractor's registration through the Attorney General's online search or by calling 1-888-520-6680. Never pay before the contract is signed, confirm the contract includes every required term, and keep a complete copy. If a contractor takes your money without performing, misrepresents materials, or abandons the job, HICPA and the UTPCPL may give you meaningful remedies.

How CDM Law Can Help

CDM Law represents contractors, business owners, and property owners in construction and contract disputes throughout Southeastern Pennsylvania. Our attorneys can help:

• Contractors draft and review HICPA-compliant contracts, change orders, and payment terms; respond to consumer complaints; and pursue payment for completed work.
• Homeowners review a contract before signing, evaluate HICPA and UTPCPL claims, and pursue recovery when a project goes wrong.

Contact CDM Law at (610) 994-0281 or cdm@cdmattorneys.com, or visit our office at 815 Fayette Street, Suite 200, Conshohocken, PA 19428, to discuss your Pennsylvania construction law or home improvement contract matter.

Sources

• Pennsylvania Office of Attorney General: Home Improvement Contractor Registration
• Pennsylvania Office of Attorney General: Home Improvement Consumer Protection Brochure (PDF)
• Home Improvement Consumer Protection Act, Act 132 of 2008, 73 P.S. § 517.1 et seq.
• Shafer Electric & Construction v. Mantia, 96 A.3d 989 (Pa. 2014) (Justia)

Legal Disclaimer: This article is provided by CDM Law for general informational purposes only and does not constitute legal advice. Reading this article or contacting CDM Law does not create an attorney-client relationship. Laws change and their application depends on the specific facts of each matter; you should consult a licensed Pennsylvania attorney about your situation. This post may be considered attorney advertising. Prior results do not guarantee a similar outcome.