House Committee Endorses Home Improvement Consumer Protection Law Changes

The House Consumer Affairs Committee yesterday approved a bill sponsored by Senator Tommy Tomlinson (R-Bucks) that would make several changes and improvements to the state’s new Home Improvement Consumer Protection Act of 2008, which he sponsored.

Tomlinson, who chairs the Senate Consumer Protection and Professional Licensure Committee, said the law will more strictly oversee home improvement contractors and give consumers more information before they hire a home repair operator.

The Home Improvement Consumer Protection Act allows homeowners to search a complete list of contractors online or by calling a toll-free number.  The law requires that all contractors who perform at least $5,000 worth of home improvements per year register with the Attorney General’s Office.

“Senate Bill 973 will make improvements to a strong consumer protection law that will give homeowners more information and more resources when making home repairs,” he said.  “This law will ensure 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 or she is registered.  Under present law, applicants must show proof of insurance.  It 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.  All fees and penalties collected under this act prior to the implementation of this bill would be deposited into this account.

The bill would also raise the amount of the contract level, for which the contractor may only collect one third of the contract price from $1,000 to $5,000.

A new provision would be added for home improvement retailers to permit them to collect the total amount of the contract.  Home improvement retailers would be permitted to post an irrevocable letter of credit payable to the bureau in the amount of $100,000 per store location, but may not exceed $1,000,000 for a home improvement retailer that has multiple stores. These retailers must verify that their contractors are registered under this act and have proof of liability insurance.

Under this provision, a home owner who has a dispute with a home improvement retailer or its contractor may file a complaint with the bureau.  If the bureau finds that the home improvement retailer is in default of the contract, the bureau may draw upon the letter of credit.



Fran Cleaver
(717) 787-5072