Pennsylvania Builders Association knows how important Act 132 of 2008 (commonly known as the Home Improvement Contractor Registration act) is to our members and that there are questions about how the new law will affect individual businesses. So we took your questions to Attorney Gen. Tom Corbett, whose office will be in charge of enforcing the new legislation.

The attorney general began the question and answer session with the following comments:

“Last year, Pennsylvania’s General Assembly adopted the Home Improvement Consumer Protection Act (Act 132 of 2008) to protect consumers from unscrupulous contractors and provide new protections for consumers who hire home improvement contractors. For years, reputable contractors had to compete with fly-by-night contractors whose substandard work generated thousands of complaints with my office every year. This new law will level the playing field for the industry by requiring everyone performing home improvements to register with the Office of Attorney General and afford basic protections to their customers. My office worked closely with the building community during the passage of Act 132, and I look forward to working with you during its implementation and beyond.”

1. I operate one business using different names to market different types of projects. Do I need to register more than once?

   The Home Improvement Consumer Protection Act requires contractors and home improvement businesses to register with the Office of Attorney General. Although a separate registration is not required for each name used by a contractor or business, each of those names must be disclosed when you register. Also remember that fictitious or assumed names need to be registered with Pennsylvania’s Department of State.

2. This new registration law was supposed to eliminate nearly all municipal registration costs, but my local officials are telling me I must pay a fee and register because some projects will require township services for building code inspections. Must I still register locally and pay these fees?

   Municipalities are permitted to continue enforcing their own insurance requirements, however Section 12 of the act prohibits local licensing or registration of contractors with the exception of certain trades in very limited circumstances. I strongly encourage all local government offices to consult with their solicitors about any other fee, license, or registration that may be in conflict with Act 132.

3. City government requires a mercantile license for all businesses that “operate” within city limits, including contractors performing work for city residents or those with offices in the city. Do I still have to buy one of these licenses, or is this exempted?

   The law does not affect local authority to administer rules or ordinances that are general in nature and apply equally to all businesses.

4. I don't have any vehicles specially painted with the name of my business because it’s so small. Does the new law require me to get lettering for my truck with the name of my business and my state registration number?

   Act 132 does not mandate any special advertising, however, if contractors or businesses do promote themselves through signs or other ads, they must include their registration numbers in those advertisements. Contractors must also include their registration number in the contracts, estimates and proposals they use.

5. Are general contractors responsible to verify that all mechanical, drywall, painting and other subcontractors are legally registered in Pennsylvania?

   Act 132 is silent on this issue. However, home improvement contractors must advise consumers of the subcontractors that they know will be working on the project at the time the contract is signed. They must also give the consumer contact information for these subcontractors. Note that any subcontractor which is a “home improvement contractor,” as defined by Act 132, must be registered with the Office of Attorney General.

6. If I operate in a city with a technical licensing requirement that is not exempted by this law, am I required to also register with the state?

   Yes. You must register with the Office of Attorney General if you are a “home improvement contractor” as defined by Act 132, regardless of whether you are also required to be licensed by a local government.

7. Most of my work falls under the category of commercial building renovations. Am I required to register under this law?

   Commercial work and new home construction are both excluded under the law so those who do this work exclusively would not need to register. Keep in mind, though, that once the law takes effect, you will not be permitted to perform residential home improvements until you are registered; so if your work involves a combination of commercial and residential projects, you must register to continue working on private residences.

8. If new home builders complete repairs under a third-party warranty with a cumulative value of more the $5,000 threshold under this law, are they required to register for this “home improvement” work?

   As noted above, those exclusively engaged in new home construction and commercial building activity are not required to register. The response would depend, in part, upon the terms of the warranty contract itself, the parties to the contract and the work being done. To the extent contractors are performing home improvements, as defined under the law, they will need to register.

9. I understand changes are needed in the contracts signed with consumers. Do I need to change the contract I use with my subcontractors?

   The contract requirements of Act 132 apply to contracts entered between contractors and their customers. The law does not address commercial contracts entered into between contractors and other businesses or their subcontractors. It will require – and prohibit – certain contract provisions in consumer contracts for projects of $500 or more beginning July 1.

10. My current contract includes an escalation clause to protect my business if lumber or other materials costs increase significantly before the project is completed. Can I use an escalation clause under the new law?

    Act 132 is silent on this issue. The law does allow for contracts to be amended with the written agreement and acknowledgement of the consumer