Door-to-door Promotion
Door-to-door contractor sales is starting. Spring — the peak time for home repairs — is nearly here! Contractors beware! There are two Pennsylvania statutes — the Home Improvement and Construction Law (HICPA) and Unfair Trade Practices and PA’s Unfair Trade Practices and Consumer Protection Law (discussed below) that expose you to liability for certain door-to-door practices, promoting home improvement contracts. If you hire a salesperson to go door-to-door, you can be liable for what they say on behalf of your company.
The Customer’s Perspective
Be wary of any tradespeople or alleged tradesperson who comes to your home unrequested. A person might say he’s “in your neighborhood” doing work for a “neighbor” — and –“I noticed that your roof could use some work. But you have to act quickly.” Here’s the hook: “because once we leave the neighborhood, the promotion will be over,” etc.
Some are legitimate tradespeople looking for work. Other door-to-door “contractors” are part-time contractors at best with many complaints about them in the past. Still others are total frauds — not affiliated with a legitimate construction or home improvement company. Many issues can arise from hiring a “door-to-door” salesman of construction and home improvement services. For more, click Here.
Home Owners (and Contractors) Should Know…
Pennsylvania’s Attorney General’s office has attempted to reduce shoddy and/or fraudulent home improvement practices in Pennsylvania by (1) regulating home improvement contractor activity and (2) making information available to the public about certain contractors, in particular.
PA’s Regulation of Home Improvement
In Pennsylvania, all home improvement contractors are required to be licensed by the state and to carry liability insurance for any jobs over $1,000. The contract must be in writing and the contractor cannot receive over 1/3 of the price of the job upfront. (An exception exists when expensive materials need to be ordered upfront). Click here to read more about the requirements of contractors. Pennsylvania’s Attorney General also lists on its website the entirety of PA’s Home Improvement and Consumer Protection Act (HICPA). For the link and text, click Here. Note the following:
- definition of “home improvement contractor” (§ 517.2)
- things that must be included in home improvement contracts(§ 517.7(a))
- voidable clauses in a contract (§ 517.7(e)), and
- home improvement fraud (§ 517.8).
The office of the Attorney General of Pennsylvania has additional information on the Home Improvement Consumer Protection Act, or you can find the Act at 73 Pa.C.S. §517.1, et seq.
Unfair Trade Practices and Consumer Protection Law
Pennsylvania also has an additional statute protecting consumers relative to door-to-door sales: the Unfair Trade Practices and Consumer Protection Law (UTPCPL). This contains a three (3) day right of cancellation and recision. That is to say, In PA customers have three business days to void purchases of $25 or more for goods or services sold as a result of a business solicitation at one’s residence, either in person or over the phone.
The above act also allows the homeowner to obtain an award against the contractor for treble (triple) damages for any false or misleading statement made to a consumer in regard to a consumer transaction, plus attorney fees. This includes home improvement contracts. This does not involve construction disputes involving property used commercially, such as a home or building one rents out.
Don’t Assume You’ll Prevail Against a Contractor!
As we mentioned, the law imposes special duties on home improvement contractors especially those soliciting work from door-to-door sales pitches. However, the homeowner must remain vigilant. Enforcing the law can prove problematic, especially after the contractor has been paid money for work not yet performed. It’s not like the police sitting by the phone waiting for you to report a home improvement contractor. Far from it. The police will likely deem the matter a “civil matter” and do nothing, unless a criminal statute has been triggered.
A civil lawyer can help, but we can’t simply call the contractor’s bank and have it wire your money back to you. We wish we could! Rather, a lawyer must follow the laws and due process. He must file a lawsuit and hope the contractor has assets to satisfy a judgment. It can be months or years before your home improvement dispute resolves without any guarantee of any particular result.
Therefore, one should always request proof of both before allowing someone to perform work on your home.
Learn About a Particular Contractor Before Paying That Person!
The homeowner can request from the PA Attorney General information about particular contractors, It is always better to avoid dealing with a shoddy contractor than to contact a construction law attorney, because there are limits on how much money can be collected from a contractor, especially one who has more debts than assets. In other words, for homeowners, as we’ve said, just because the law is on your side, that does not mean the contractor will follow it, or simply fold up shop in PA (to avoid a PA judgment) and start doing business in another state.
The Pennsylvania Attorney General stores information about how contractors have answered questions about their business and practices. Here is the main page. Then, simply click off the the right: Verify Contractor Registration Form. Importantly, this will show you how individual contractors answered questions regarding crimes, bankruptcy and civil judgment can be requested by calling the attorney general’s office and requesting a business report with that information.
The Better Business Bureau, at www.bbb.org/us can also provide information on whether complaints have been filed against a contractor.
The Written Contract
Before any work is started, procure a written contract that delineates not only the work to be performed but delineates the particular products to be installed, for example, a specified brand and style of windows to be replaced, to avoid cheaper products being installed. The contract should specify all work to be performed, when the project will commence and when it will be finished (start date and end date), and whether your project may take far longer, and financial penalties for delays.
PA’s Attorney General’s website has information in its Frequently Asked Questions section regarding home improvement contracts. Homeowners can negotiate the terms of the contract, including price and payment terms before signing the contract.
Right of Cancellation
The homeowner has the right to cancel the contract within three (3) days of signing, most particularly if the contract was generated by door-to-door sales, under the Pennsylvania Unfair Trade Practices and Consumer Protection Law. If the contractor chooses to cancel a contract, he must provide written notice of cancellation, and if the homeowner is not notified of his rights, the entire contract may be voidable, even if the three-day period has already passed.
Door-to-Door Sales – Sales Tax
You should not pay sales tax on these home improvement services, solicited door-to-door or otherwise. Sales tax only applies to the sale of goods. Sales tax can be charged if, for example, the contractor is only selling you materials, such as roofing materials, or plumbing, or concrete, or wood. That said, materials-only are governed by Pennsylvania’s Unfair Trade Practices Consumer Protection Law, above. Plus, the sale of materials, only, is also governed by:
§ 111.9. Door-to-door sales.
(a) A supplier and its agents shall comply with local ordinances regarding door-to-door marketing and sales activities. A supplier shall limit door-to-door marketing or sales activities to the hours between 9 a.m. and 7 p.m. during the 6 months beginning October 1 and ending March 31, and to the hours between 9 a.m. and 8 p.m. during the months beginning April 1 and ending September 30. When a local ordinance has stricter limitations, a supplier shall comply with the local ordinance.
Do You Already Have an Issues with a Home Improvement Contractor?
A homeowner should report to Pennsylvania’s Attorney General any issue with a contractor. Did the contractor who procured a contract by calling you or coming to your home in person (door-to-door):
- make a false statement,
- fail to provide a start date and end date for the work,
- cause resulting damage to the property (or a mess), failed to complete the work,
- charge a higher fee than quoted,
- fail to complete the work on time, or
- improperly asserted a mechanic’s lien, or one of his subcontractors did so, even after you paid the general contractor?
You can submit a Complaint to the Attorney General for free. Click here. However, PA’s AG’s office receives 50,000 complaints annually. Plus, the AG does not provide legal representation, typically, unless you are part of a class action, The AG will, however, assign someone (eventually) to help with your claim by reaching out to the contractor. This rarely ends the dispute, from a door-to-door generated contract or otherwise. You will likely need to retain your own lawyer, as the contractor will likely offer some contrived reason for his conduct. Just remember, anything you say can be used against you, so you should talk to a lawyer before putting anything in writing to the contractor or the AG’s office.
Our Pittsburgh lawyers focus on construction law and related disputes in Pennsylvania. We represent both contractors and homeowners relative to any construction dispute.
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