By Angela M. Ward, Attorney
When it comes to fraud, Pennsylvania homeowners are at risk. Unfortunately, home improvement fraud is so common that the Commonwealth has established a list of legal requirements for home improvement contracts and payments.
In fact, the PA Home Improvement Consumer Protection Act, or HICPA, provides protections and allows a homeowner to seek recovery of all costs, applicable interests, and even attorney’s fees. In some cases, the plaintiff can receive up to three times the actual damages. Under HICPA, home improvement fraud is defined as the intent to defraud or injure someone in several ways. Here are seven of the most common infractions.
More Than One-Third Down Payment
HIPCA restricts down payments to one-third of a project’s costs or one-third plus the cost of any special materials. Consider it a red flag if a Lancaster County homeowner is asked to pay more than one-third of the costs upfront.
A reputable contractor will usually request a down payment of one-third or less and then require installments for the remaining at pre-agreed stages. Homeowners should ask the builder to document payment schedules in a contract.
Unfortunately, one of the most common illegal practices is to ask for a down payment and not show up to complete the work.
Homeowners can protect themselves against no-shows by PA law requires most home improvement contractors to register with the Pennsylvania Attorney General’s office. To be listed on this register, contractors must be insured and operate in good standing. If your contractor is not registered, they are not complying with Pennsylvania state laws, which provides reason to doubt their honesty.
Unfinished Home Repairs
In another common homeowner scam, disreputable contractors show up, take the down payment, do a half day’s work, and then postpone the job indefinitely. Sometimes they stop returning calls or disappear altogether.
Again, homeowners can check the contractors’ credentials with the state Attorney General’s office. If the contractor is not listed, keep looking.
Some home improvement contractors will charge homeowners for a premium-priced item but use a cheaper option and pocket the difference. Sometimes builders charge a higher price for “special order items” that are not more expensive. Both practices are prohibited explicitly in HICPA.
Changes Not Specified on the Contract
Some contractors pad their projects by doing additional work without prior consent. They may say the unapproved work was necessary for safety, code reasons, or to stay on schedule. Even if these reasons are valid, it is still illegal for a contractor to change any part of an agreement without the client’s permission. When a contractor spots an issue that will increase costs, it is their legal responsibility to notify a homeowner before proceeding.
It is illegal for a home improvement contractor to work under a false name or identity. Unethical contractors sometimes use another contractor’s name or address to cover up past infractions. Sometimes a scammer poses as a government or public utility employee to manipulate a homeowner into paying for an unneeded home repair.
For this reason, it is unwise to hire any contractor who comes to the door. It’s also risky to use a contractor who calls or visits a homeowner to tell them about needed repairs. These scammers may offer deals for quick decisions, but this is often a ploy to avoid discovery.
Instead, call contractors at their offices. Use the numbers listed on their websites or phone listings. Beware of discounts for immediate work. And take the time needed to research any new contractor.
Sometimes contractors intentionally damage a homeowner’s property to create more work. For example, when a contractor remodels a bathroom, they may destroy wiring to create a need for more electrical work.
Homeowners who have been victimized by this practice can seek damages, including legal fees.
PA Law Protects Homeowners
Pennsylvania laws protect homeowners from a variety of unethical practices. In Pennsylvania, there are both criminal and civil consequences for home improvement fraud. Criminal damages depend on the project size. For example, the violation is charged as a misdemeanor when a contract or payment is less than $2,000. However, when the amount exceeds $2,000, the offense will be prosecuted as a felony. The severity of the charge will also depend on the nature of the fraud, the prior record of the accused contractor, and whether the homeowner is 60 years of age or older.
Pennsylvania law also allows homeowners to file a civil lawsuit to seek the recovery of all damages, costs, applicable interests, and attorney’s fees. In some cases, the homeowner can recoup up to three times the damages.
Remember that even cautious homeowners may fall victim to scams. If you suspect your contractor is acting unethically, contact the Law Offices of Going and Plank in downtown Lancaster. We will review cases of potential consumer fraud and work with you to secure the compensation you deserve.
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