This post will update you as to a recent development in Pennsylvania law which will impact most kitchen and bath companies.
Last fall Gov. Ed Rendell of Pennsylvania signed into law a bill known as the Pennsylvania Home Improvement Contract act which will serve to regulate home improvement contractors and which requires that all home improvement contractors be registered with the state. All registrations must be completed by July 1, 2009 which is the date that the law goes into effect.
The bill defines "home improvement contractor" as any person who owns and operates a home-improvement business or who undertakes, offers to undertake or agrees to perform any home-improvement.
In relevant part, "Home improvement" is defined as any repair, replacement, remodeling, demolition, removal, renovation, installation, alteration, conversion, modernization, or improvement in connection with land or a portion of land that is adjacent to a private residence for which the total cash price for all work agreed upon his more than $500.
The bill excludes new construction, the sale of appliances, home improvement retailer having a net worth of more than $50 million and the sale of goods by a seller who neither arranges to nor performs directly or indirectly any work or labor in connection with the installation or application of the goods or materials.
Clearly, the bill is liberally constructed for the purpose of protecting Pennsylvania residents from unscrupulous business practices by contractors, etc. The general definition of both "home improvement contractor" and "home improvement" certainly applies to most kitchen and bath companies doing business within the state. Kitchen and bath companies will have to comply with the registration law prior to the July 1, 2009 deadline. If you do not register with the state, it will not recognize as valid or enforceable any improvement contract entered into between your company and Pennsylvania residents.
In addition to the registration requirement the bill also contains requirements about deposits on the job. For any contract exceeding $1000 in value you may never receive a deposit in excess of (A.) one third of the home-improvement contract price; or (B.) one third of the home-improvement contract price plus the cost of special order materials that have been ordered.
Finally, the law imposes new criminal penalties for home-improvement fraud.
—Peter J. Lamont, Esq., is a commercial litigation attorney with offices in Hawthorne, NJ, as well as Massapequa, NY. His practice focuses on the representation of small- to large-size companies in the building and design industry, as well as individual designers and architects. To contact him with questions and suggestions on topics for future articles, please email him at plamont@peterlamontesq.com or call him at (973) 949-3770.
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