The Home Improvement Consumer Protection Act passed by the Pennsylvania Legislature in 2008, takes effect on July 1, 2009. The act requires all contractors who (i) perform at least $5,000 worth of "home improvements" per year and (ii) are not large retailers with a net worth of at least $50 million, to register with the Attorney General's Office, as well as meet the other requirements of the Act applicable to their consumer contracts and advertising materials.

These requirements include, but are not limited to, having a written contract signed by both the consumer and the contractor, meeting minimum insurance requirements, including a description of work, approximate start and end dates, total price of the contract and notice of the consumer's right to cancel the contract, providing contractor's registration number on contracts, estimates, proposals and advertisements (which can include contractor vehicles), and prohibitions on certain provisions including "hold harmless" clauses and awards to the contractor of attorneys fees and costs and business practices such as abandoning a home improvement project or failing to complete work. The act also limits the amount of allowable down payments or deposits for home improvement projects over $1,000, and creates a criminal penalty for home improvement fraud.

The act applies to any person (including subcontractors and independent contractors) who owns and operates a home improvement business or who agrees to perform any home improvement. "Home improvement" is defined by the act as the following work performed on a private residence or a building or a portion of the building that is used or designed to be used as a private residence, or in connection with land or a portion of land adjacent to a private residence or a building or a portion of the building that is used or designed to be used as a private residence for which the total cash price of all work agreed upon between the contractor and owner is more than $500:
  • Repair, replacement, remodeling, demolition, removal, renovation, installation, alteration, conversion, modernization, improvement, rehabilitation or sandblasting.
  • Construction, replacement, installation or improvement of driveways, swimming pools, pool houses, porches, garages, roofs, siding, insulation, solar energy systems, security systems, flooring, patios, fences, gazebos, sheds, cabanas, landscaping work (other than work performed under the Plant Pest Act), painting, doors and windows and waterproofing.
  • Without regard to affixation, the installation of central heating, air conditioning, storm windows or awnings.
The definition of home improvement excludes certain items, including, but not limited to, construction of a new home.

According to the attorney general's website, if a home improvement contractor fails to register by July 1, 2009, he or she is prohibited from offering or performing home improvements, and may face legal action, including civil penalties of $1,000 or more.

It is important for all home improvement contractors to register with the Attorney General's Office and review and update all of their contracts in order to remain in compliance with the act, while continuing to limit their liability and ensure they receive compensation for their services.