Senate Approves Bill to Improve Home Consumer Protection Act

Harrisburg – On July 7, 2009, the State Senate unanimously approved legislation sponsored by Senator Tommy Tomlinson (R-Bucks) that would make several changes and improvements to the state’s new Home Consumer Protection Act of 2008.

Tomlinson, who chairs the Senate Consumer Protection and Professional Licensure Committee, said “Senate Bill 973 will make improvements to a strong consumer protection law that gives homeowners more information and more resources when making home repairs.”  This law already enacted ensures that consumers are protected from scam artists and have recourse if they are not happy with the work performed.”

Tomlinson said Senate Bill 973 would define a “home improvement retailer,” as a person, who sells materials for use in home improvement contracts, regardless of whether he is registered.  In order for these large stores to collect 100% of the contract price at signing, home improvement retailers would be required to post an irrevocable letter of credit payable to the Attorney General in the amount of $100,000 per store location, but may not exceed $2,000,000 for a home improvement retailer that has multiple stores. More importantly, these retailers must verify that their contractors are registered under this act and have proof of liability insurance.  Under this provision, a homeowner who has a dispute with a home improvement retailer or its contractor may file a complaint with the Attorney General.  If the Attorney General finds that the home improvement retailer is in default of the contract, the Attorney General may draw upon the letter of credit to satisfy the consumer’s complaint.

Under present law, applicants must show proof of insurance.  The legislation would amend the law to permit proof of insurance to include information indicating that the applicant is self insured.

The legislation would also create a restricted revenue account known as the Home Improvement Account in the State Treasury.  This would insure that the Attorney General had the necessary resources to administer this important law.

The bill would also raise the amount of the contract price, for which the contractor may only collect one third of the contract price from $1,000 to $5,000, plus the cost of any special order materials as designated in the written contract.

Senate Bill 973 was referred to the House Consumer Affairs Committee where is awaits consideration.



Fran Cleaver
(717) 787-5072