On July 1, 2009, the Home Improvement Consumer Protection Act (HICPA) went into effect in Pennsylvania. HICPA is intended to protect homeowners who hire contractors for home improvement projects.
After three years, only one Court has evaluated the scope and effect of HICPA. The decision in Gelack v. Lunz may be helpful in predicting how Pennsylvania Courts will interpret and effectuate the Act.
The dispute in Gelack arose between homeowners, Phillip and Linda Gelack, and their contractor, Mark Lunz. The homeowners hired Lunz to remodel parts of the residence and construct an addition for a total price of $118,805. The homeowner and contractor signed a written construction agreement which complied with HICPA – it identified the scope of work, the price and the time for completion.
During the course of the construction project, the contractor submitted invoices for $282,300.51. The homeowners paid all but the final invoice and then sued the contractor for breach of contract and violation of HICPA. The contractor challenged, claiming that HICPA did not apply to new construction, including additions.
The Court found that the HICPA applied and that the contractor violated HICPA. Specifically, the Court found that HICPA applied to the homeowner’s new addition under the definition of “home improvement”, which includes construction, replacement, installation, remodeling, demolition, repair and alteration of any portion of a private residence. The Court found that the only new construction which is excluded from HICPA is the construction of a new home.
The Court also found that the contractor violated HICPA under both arguments made by the contractor. If the additional work was considered change order work, the contractor violated HICPA by failing to provide the homeowners with written change orders which included the price, time for completion and other HICPA requirements. Oral change orders do not comply with HICPA.
The Court also rejected the contractor’s second argument that the original contract was converted into an oral time and materials contract. The Court found that an oral contract for home improvement is not legally enforceable under HICPA.
Decisions like Gelack, which provide a common sense interpretation of HICPA, give homeowners and contractors certainty in home improvement contracts.
