PRINTER'S NO. 1814
No. 1382 Session of 1998
INTRODUCED BY DELP, GERLACH, SALVATORE, MADIGAN AND LAVALLE,
MARCH 19, 1998
REFERRED TO URBAN AFFAIRS AND HOUSING, MARCH 19, 1998
AN ACT
1 Providing for the regulation of home improvement contracts and
2 for the registration of home improvement contractors and
3 salespersons; establishing the Home Improvement Guaranty
4 Fund; providing for fees and assessments; imposing additional
5 powers and duties on the Department of Labor and Industry and
6 the Bureau of Consumer Protection; defining certain criminal
7 activity; and providing penalties.
8 TABLE OF CONTENTS
9 Chapter 1. Preliminary Provisions
10 Section 101. Short title.
11 Section 102. Definitions.
12 Section 103. Exemptions.
13 Chapter 3. Certificate of Registration
14 Section 301. Registration required.
15 Section 302. Procedures for registration.
16 Section 303. Application fees.
17 Section 304. Issuance or denial of certificates of
18 registration.
19 Section 305. Expiration and renewal.
20 Section 306. Exhibition and advertisement of certificate.
1 Section 307. Prohibited acts relating to certificate of
2 registration.
3 Chapter 5. Home Improvement Contracts
4 Section 501. Required provisions for home improvement
5 contracts.
6 Section 502. Rescission of home improvement contract.
7 Section 503. Delivery of contract.
8 Section 504. Prohibited acts relating to home improvement
9 contracts.
10 Chapter 7. Home Improvement Guaranty Fund
11 Section 701. Home Improvement Guaranty Fund.
12 Section 702. Biennial fees for fund.
13 Section 703. Claims against fund.
14 Section 704. Limitation on recovery.
15 Section 705. Excluded claims.
16 Section 706. Procedure for submission of claims.
17 Section 707. Reimbursement of fund.
18 Section 708. Investigation to satisfy claims of fund.
19 Section 709. Revocation of certificate of registration by
20 department.
21 Chapter 9. Criminal Acts, Enforcement and Penalties
22 Section 901. Criminal acts.
23 Section 902. Jurisdiction.
24 Section 903. Unfair Trade Practices Act and Consumer Protection Law.
25 Section 904. Notice of suspension or revocation.
26 Chapter 11. Miscellaneous Provisions
27 Section 1101. Regulations.
28 Section 1102. Effective date.
29 The General Assembly of the Commonwealth of Pennsylvania
30 hereby enacts as follows:
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1 CHAPTER 1
2 PRELIMINARY PROVISIONS
3 Section 101. Short title.
4 This act shall be known and may be cited as the Home
5 Improvement Consumer Protection Act.
6 Section 102. Definitions.
7 The following words and phrases when used in this act shall
8 have the meanings given to them in this section unless the
9 context clearly indicates otherwise:
10 "Bureau." The Bureau of Consumer Protection in the Office of
11 Attorney General.
12 "Certificate." A certificate of registration issued under
13 this act.
14 "Contractor." Any person, including a subcontractor or
15 employee of another contractor, who owns and operates a home
16 improvement business or who undertakes, offers to undertake or
17 agrees to perform any home improvement. The term does not
18 include a person for whom the total cash value of all of that
19 person's home improvement business is less than $3,000 during
20 any period of 12 consecutive months.
21 "Department." The Department of Labor and Industry of the
22 Commonwealth.
23 "Fund." The Home Improvement Guaranty Fund established under
24 section 701.
25 "Home improvement." The term includes, but is not limited
26 to, the repair, replacement, remodeling, alteration, conversion,
27 modernization, improvement, rehabilitation or sandblasting of or
28 addition to any land or building, or that portion thereof, which
29 is used or designed to be used as a private residence or the
30 construction, replacement, installation or improvement of
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1 driveways, swimming pools, porches, garages, roofs, siding,
2 insulation, solar energy systems, security systems, flooring,
3 patios, fences, doors and windows and waterproofing in
4 connection with such land or building or that portion thereof
5 which is used or designed to be used as a private residence in
6 which the total cash price for all work agreed upon between the
7 contractor and owner exceeds $200. The term does not include:
8 (1) The construction of a new home.
9 (2) The sale of goods or materials by a seller who
10 neither arranges to perform nor performs, directly or
11 indirectly, any work or labor in connection with the
12 installation or application of the goods or materials.
13 (3) The sale of services furnished for commercial or
14 business use or for resale, provided commercial or business
15 service takes place somewhere other than at a private
16 residence.
17 (4) The sale of appliances, such as stoves,
18 refrigerators, freezers, room air conditioners and others
19 which are designed for and are easily removable from the
20 premises without material alteration thereof.
21 (5) Any work performed without compensation by the owner
22 on his own private residence or residential rental property.
23 "Home improvement contract." An agreement between a
24 contractor or salesperson and an owner for the performance of a
25 home improvement.
26 "Owner." A person who owns or resides in a private residence
27 and includes any agent thereof. An owner of a private residence
28 shall not be required to reside in such residence to be deemed
29 an owner under this act. A person who owns four or more private
30 residences is not an owner except with respect to the person's
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1 primary residence or the part of the building which houses the
2 primary residence of the owner.
3 "Person." An individual, partnership, limited partnership,
4 limited liability company, joint venture or corporation.
5 "Private residence." A single-family dwelling, a multifamily
6 dwelling consisting of not more than three units or a single
7 unit located within any multifamily dwelling, including, but not
8 limited to, condominiums and co-op units.
9 "Salesperson." Any individual who:
10 (1) negotiates or offers to negotiate a home improvement
11 contract with an owner; or
12 (2) solicits or otherwise endeavors to procure by any
13 means whatsoever, directly or indirectly, a home improvement
14 contract from an owner.
15 "Unfair Trade Practices and Consumer Protection Law." The
16 act of December 17, 1968 (P.L.1224, No.387), known as the Unfair
17 Trade Practices and Consumer Protection Law, and any subsequent
18 amendments thereto.
19 Section 103. Exemptions.
20 This act shall not apply to any of the following:
21 (1) The Commonwealth, political subdivisions within the
22 Commonwealth or any department or agency of the Commonwealth
23 or such political subdivisions.
24 (2) The Federal Government or any of its departments or
25 agencies.
26 (3) Any school, public or private, offering as part of a
27 vocational education program, courses and training in any
28 aspect of home improvement.
29 CHAPTER 3
30 CERTIFICATE OF REGISTRATION
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1 Section 301. Registration required.
2 (a) Contractor registration.--No person shall act as a home
3 improvement contractor, perform any work as a home improvement
4 contractor or represent that that person is a home improvement
5 contractor without first obtaining a certificate of registration
6 as a contractor from the department under the provisions of this
7 act. Any person registered as a contractor under the provisions
8 of this subsection shall not be required to register as a
9 salesperson under the provisions of subsection (b). An
10 individual who has provided personal information to the
11 department when registering on behalf of a partnership, limited
12 partnership, limited liability company, joint venture or
13 corporation shall not be required to file a separate
14 registration as an individual as long as that individual
15 performs home improvement work solely on behalf of the
16 registered entity.
17 (b) Salesperson registration.--No person shall act as a home
18 improvement salesperson or represent that that person is a home
19 improvement salesperson without first obtaining a certificate of
20 registration as a salesperson from the department under this
21 act.
22 (c) Responsibility for acts of others.--No person registered
23 under this act shall be relieved of responsibility under this
24 act for the conduct and acts of that person's agents, employees,
25 officers or directors. No individual shall be relieved of
26 responsibility under this act by reason of that individual's
27 employment or relationship with any person registered under this
28 act.
29 (d) Limitations.--No unregistered contractor or unregistered
30 salesperson shall:
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1 (1) Have standing to sue, countersue or raise a defense
2 of nonpayment in any dispute arising from a home improvement.
3 (2) Have standing to file any mechanic's lien arising
4 from any home improvement.
5 (e) Toll-free information.--The department shall maintain a
6 toll-free telephone number from which a caller can obtain
7 information as to whether a contractor or salesperson is
8 registered with the department under this act.
9 Section 302. Procedures for registration.
10 (a) Application and required information.--A person desiring
11 a certificate of registration as a contractor or salesperson
12 shall apply to the department in writing, on a form provided by
13 the department. The application shall include, but not be
14 limited to, the following information:
15 (1) For an individual applicant, the name, home address,
16 home telephone number and driver's license identification
17 number of the applicant, as well as the individual's business
18 name, address and telephone number if different.
19 (2) For a partnership applicant, the name, home address,
20 home telephone number and driver's license identification
21 number of each partner, as well as the partnership name,
22 address and telephone number.
23 (3) For a corporation, limited liability company or
24 limited partnership applicant, the name, home address, home
25 telephone number and driver's license identification number
26 of each officer, each director or each individual holding
27 greater than a 10% stake in the business, as well as the
28 entity's business name, address and telephone number. For an
29 out-of-State corporation, limited liability or limited
30 partnership, the name and address of the entity's resident
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1 agent or registered office provider within this Commonwealth.
2 (4) For a joint venture applicant, the name, address and
3 telephone number of the joint venture, as well as the name,
4 address and telephone number of each party to the joint
5 venture. When the parties to a joint venture include business
6 entities, the information required from such entities under
7 paragraphs (2) and (3) shall also be provided.
8 (5) If the applicant is applying for a contractor
9 registration, a complete description of the nature of the
10 contracting business of the applicant.
11 (6) A statement whether the individual making
12 application, even if doing so as part of a business entity
13 application, has ever been convicted of a criminal offense
14 related to a home improvement transaction, fraud, theft, a
15 crime of deception or a crime involving fraudulent business
16 practices, as well as a statement whether the applicant has
17 ever had a civil judgment entered against the applicant or a
18 business in which the applicant held an interest that was
19 related to a home improvement transaction.
20 (7) Whether the applicant's certificate of registration
21 or the certificate of registration of a business with which
22 the individual making application held an interest, has ever
23 been revoked or suspended pursuant to an order issued by a
24 court of competent jurisdiction.
25 (8) Any financial information deemed appropriate by the
26 department or the bureau.
27 (9) Whether within the last ten years the applicant has
28 ever been suspended, debarred or prohibited from
29 participating in any Federal, State or local program through
30 which funding or other assistance is provided to consumers
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1 for home improvements.
2 (b) Limitation on certificate.--The department shall not
3 provide a certificate of registration to any applicant who has
4 had a certificate of registration revoked within five years
5 preceding the application or whose officer or principal has had
6 their registration revoked within five years preceding the
7 application.
8 (c) Contractual relationships.--In addition to the
9 information required in subsection (a), a contractor shall be
10 required to notify the department of any employment or other
11 contractual relationship between the contractor and any
12 salesperson. This information shall be updated by the
13 contractor, on a form provided by the department, on an as-
14 needed basis throughout the period of registration. A contractor
15 shall be required to submit this information within ten days of
16 entering into the relationship with a salesperson.
17 Section 303. Application fees.
18 (a) Contractor registration.--Each application for a
19 certificate of registration as a home improvement contractor or
20 renewal of a contractor's registration shall be accompanied by a
21 fee of $100.
22 (b) Salesperson registration.--Each application for a
23 certificate of registration as a salesperson or renewal of a
24 salesperson registration shall be accompanied by a fee of $25.
25 (c) Utilization of fees.--
26 (1) Fifty percent of the application and renewal fees
27 collected under this act shall be used by the department for
28 the purpose of implementing and administering the provisions
29 of this act.
30 (2) Fifty percent of the application and renewal fees
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1 collected under this act shall be transferred to the bureau
2 and shall be used by the bureau for the purpose of
3 implementing and administering the provisions of this act.
4 (3) The department and the bureau, in cooperation with
5 each other, shall promulgate regulations relating to the
6 payment, collection and distribution of the fees payable to
7 and received by the department under this act.
8 (d) Limitation on cumulation of fees.--Persons, other than
9 individuals, required to register under this act shall only pay
10 one application fee, one renewal fee and one assessment for the
11 fund as registered without regard to the number of individuals
12 who provide registration information under the provisions of
13 this act.
14 Section 304. Issuance or denial of certificate of registration.
15 (a) Issuance.--Upon receipt of a completed application and
16 fee, the department shall:
17 (1) issue and deliver to the applicant a certificate to
18 engage in the business for which the application was made; or
19 (2) refuse to issue the certificate pursuant to the
20 provisions of this act or an order of a court of competent
21 jurisdiction.
22 (b) Denial of registration.--The department shall deny
23 registration to any contractor or salesperson against whom a
24 civil judgment has been entered in favor of an owner that was
25 related to a home improvement transaction if the transaction
26 occurred after the effective date of this act and the judgment
27 remains unsatisfied. The department, with bureau approval, may
28 permit a contractor or salesperson to receive a new or renewed
29 certificate after the contractor has entered into a written
30 agreement whereby the contractor agrees to pay the judgment in
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1 full in the form of periodic payments over a specific period of
2 time. If the contractor or salesperson does not pay in
3 accordance with the terms of the agreement, the department shall
4 immediately revoke the contractor's or salesperson's certificate
5 of registration.
6 (c) Registration not transferable.--Certificates issued to
7 home improvement contractors or salespersons shall not be
8 transferable or assignable.
9 Section 305. Expiration and renewal.
10 (a) General rule.--All certificates issued under the
11 provisions of this act shall expire biennially. The expiration
12 date shall be placed upon the certificate.
13 (b) Renewal fee.--The fee for renewal of a certificate shall
14 be the same as the fee charged for an original application.
15 (c) Renewal information.--The information required under
16 section 302 will also be required for renewal of certification
17 as well as any additional information the department or bureau
18 deems appropriate.
19 (d) Form for renewal.--The department shall provide a form
20 for renewal of registration.
21 (e) Obligation to renew not relieved.--Failure to receive a
22 notice of expiration or a renewal application shall not exempt a
23 contractor or salesperson from the obligation to renew.
24 Section 306. Exhibition and advertisement of certificate.
25 Each contractor or salesperson shall:
26 (1) exhibit the certificate of registration upon request
27 by any interested party;
28 (2) state in any advertisement the fact that the
29 advertiser is registered; and
30 (3) include the registration number in any
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1 advertisement.
2 Section 307. Prohibited acts relating to certificate of
3 registration.
4 No person shall:
5 (1) As a contractor, employ or use the services of any
6 salesperson to procure business from an owner unless the
7 salesperson is registered under this act.
8 (2) Act as a home improvement salesperson for an
9 unregistered contractor.
10 (3) Present or attempt to present, as that person's own,
11 the certificate of another.
12 (4) Knowingly give false information when applying for a
13 certificate or a renewal thereof.
14 (5) Represent that person falsely as or impersonate a
15 registered home improvement contractor or salesperson.
16 (6) Use or attempt to use a certificate which has
17 expired or which has been suspended or revoked.
18 (7) Offer to make or make any home improvement without
19 having a current certificate of registration under this act.
20 (8) Represent in any manner that the registration
21 constitutes an endorsement of the quality of workmanship or
22 of competency by the department or the bureau.
23 (9) Perform or sell a home improvement with or through
24 another person who is required to hold a certificate pursuant
25 to this act but does not hold the certificate.
26 (10) Act as a contractor or sell a home improvement
27 under a name other than that which the person has obtained a
28 certificate of registration.
29 (11) Fail to pay fees or assessments as required by this
30 act.
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1 (12) Be suspended or disbarred from a Federal, State or
2 local program as described in section 302(b).
3 CHAPTER 5
4 HOME IMPROVEMENT CONTRACTS
5 Section 501. Required provisions for home improvement
6 contracts.
7 No home improvement contract shall be valid or enforceable
8 against an owner unless it:
9 (1) Is in writing and legible.
10 (2) Is signed by the owner and the contractor or a
11 salesperson on behalf of a contractor.
12 (3) Contains the entire agreement between the owner and
13 the contractor.
14 (4) Contains the date of the transaction.
15 (5) Contains the name and address and certificate number
16 of the contractor.
17 (6) Contains the approximate starting date and
18 completion date.
19 (7) Is entered into by a registered contractor or a
20 registered salesperson.
21 (8) Provides a notice that gives the toll-free telephone
22 number of the department and states that:
23 (i) each contractor and salesperson must be
24 registered by the department; and
25 (ii) anyone may inquire of the department regarding
26 the status of a contractor or salesperson.
27 Section 502. Rescission of home improvement contract.
28 The provisions of section 7 of the Unfair Trade Practices and
29 Consumer Protection Law shall apply to any contract covered by
30 the provisions of this act.
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1 Section 503. Delivery of contract.
2 The contractor or salesperson shall provide and deliver to
3 the owner, without charge, a completed copy of the home
4 improvement contract at the time that contract is executed.
5 Section 504. Prohibited acts relating to home improvement
6 contracts.
7 No person subject to the provisions of this act shall:
8 (1) fail to refund the amount paid for a home
9 improvement within ten days of a written request mailed or
10 delivered to the contractor's last known address if no
11 substantial portion of the contracted work has been performed
12 at the time of the request and more than 30 days has elapsed
13 since the starting date specified in the written contract or
14 more than 30 days has elapsed since the date of the contract
15 if such contract does not specify a starting date;
16 (2) accept a completion certificate or other proof that
17 performance of a home improvement contract is complete or
18 satisfactorily concluded with knowledge that the document or
19 proof is false and the performance is incomplete;
20 (3) utter, offer or use a completion certificate or
21 other proof that a home improvement contract is complete or
22 satisfactorily concluded to make or accept an assignment or
23 negotiation of the right to receive payment under a home
24 improvement contract or get or grant credit or a loan on
25 security of the right to receive payment under a home
26 improvement contract when the person knows or has reason to
27 know that such document or proof is false;
28 (4) abandon or fail to perform, without justification, a
29 home improvement contract;
30 (5) deviate materially from the plans or specifications
19980S1382B1814 - 14 -
1 without the express, verifiable consent of the owner;
2 (6) prepare, arrange, accept or participate in arranging
3 a mortgage, promissory note or other evidence of debt for
4 performing or selling a home improvement with knowledge that
5 the evidence of debt states a greater monetary obligation
6 than the consideration, including a time sale price, for a
7 home improvement;
8 (7) advertise or offer by any means to perform a home
9 improvement if the person does not intend to accept a home
10 improvement contract, to do the home improvement or to do the
11 home improvement at the price advertised or offered;
12 (8) violate a building law or ordinance of this
13 Commonwealth or a political subdivision, a safety or labor
14 law of this Commonwealth or a political subdivision or the
15 act of June 2, 1915 (P.L.736, No.338), known as the Workers'
16 Compensation Act;
17 (9) fail to pay all taxes associated with home
18 improvement sales or contracting;
19 (10) demand or receive any payment for a home
20 improvement before the home improvement contract is signed;
21 (11) receive a deposit of more than one-third of the
22 home improvement contract price; or
23 (12) while acting as a salesperson, fail to account for
24 or remit to the contractor whom the salesperson represents a
25 payment received in connection with a home improvement.
26 CHAPTER 7
27 HOME IMPROVEMENT GUARANTY FUND
28 Section 701. Home Improvement Guaranty Fund.
29 (a) Establishment.--There is hereby established in the State
30 Treasury a separate fund to be known as the Home Improvement
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1 Guaranty Fund. Moneys in the fund shall be used for the payment
2 of claims arising pursuant to this act. The State Treasurer
3 shall manage the fund in the same manner as funds in the State
4 Employees' Retirement System. All interest arising from
5 investments of fund money shall be credited to and be deposited
6 in the fund.
7 (b) Administration.--Except for management and investment of
8 fund moneys by the State Treasurer, all other matters affecting
9 the fund shall be the responsibility of the bureau.
10 (c) Source of money for fund.--Payments received under
11 section 702 shall be credited to the guaranty fund which shall
12 maintain a balance of at least $2,000,000. If the bureau finds
13 that, because of pending claims, the amount of the fund may fall
14 below $1,000,000, the bureau shall assess each contractor $25
15 and each salesperson $10. However, under this subsection, the
16 bureau may not make more than two such assessments in any
17 calendar year.
18 (d) Waiver of fee or assessment.--In the event that the
19 bureau finds that the fund is adequately funded, the bureau may,
20 during the first month of each fiscal year, adjust or waive any
21 biennial guaranty fund fee for that fiscal year.
22 Section 702. Biennial fees for fund.
23 (a) Amount of fee.--Each salesperson who applies for a
24 certificate or renewal thereof under this act shall, in addition
25 to any application or renewal fee, pay a fee of $50 biennially,
26 and each contractor who applies for a certificate or renewal
27 thereof under this act shall pay a fee of $100 biennially to the
28 guaranty fund. The fee shall be payable with the fee for an
29 application for a certificate or renewal thereof and shall be
30 refunded, in full, in the event the applicant is denied a
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1 certificate.
2 (b) Penalty for failure to pay fee for fund.--Failure to
3 make payments to the fund as required in this act shall result
4 in suspension of registration. Barring the existence of other
5 grounds for suspension or revocation of registration, the
6 contractor's or salesperson's certificate of registration shall
7 be reinstated upon full payment of all required fees for the
8 fund.
9 Section 703. Claims against fund.
10 (a) General rule.--Pursuant to the provisions of this
11 section, an owner may be compensated from the fund for an actual
12 loss that results from an act or omission or a violation of this
13 act by a registered contractor or registered salesperson as
14 found by a court of competent jurisdiction, upon the final
15 determination of or expiration of time for appeal in connection
16 with any such judgment.
17 (b) Voluntary compliance and restitution.--In the event the
18 bureau and a contractor or salesperson enter into an assurance
19 of voluntary compliance under section 5 of the Unfair Trade
20 Practices and Consumer Protection Law, which requires payment of
21 restitution to an owner and the contractor or salesperson fails
22 to pay as required by the terms of the assurance of voluntary
23 compliance, the bureau shall be authorized to issue an order of
24 payment from the guaranty fund to the owner. Any payment made
25 pursuant to an assurance of voluntary compliance shall be
26 considered a claim for purposes of reimbursement of the fund;
27 however, subsection (f) shall not be applicable.
28 (c) Acts of subcontractors, salespersons and employees.--For
29 purposes of recovery from the fund, the act or omission of a
30 registered contractor or registered salesperson includes the act
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1 or omission of a subcontractor, salesperson or employee of the
2 registered contractor or registered salesperson whether or not
3 any express agency relationship exists.
4 (d) Denial of claim.--The bureau may deny a claim if the
5 bureau finds that the claimant unreasonably rejected good faith
6 efforts by the contractor or salesperson to resolve the claim or
7 the claimant failed to make good faith efforts to collect the
8 amount due from the contractor or salesperson.
9 (e) Limitations period.--A claim shall be made against the
10 fund within two years after the claimant obtains an entry of
11 final judgment or decree against the contractor or salesperson
12 and all appeal rights have expired or been exhausted or, in the
13 case of an assurance of voluntary compliance, within the later
14 of two years of entry into such assurance or one year after
15 nonpayment according to the terms of the assurance.
16 (f) Execution on judgment required.--In order to recover
17 from the fund, the claimant shall also offer proof to the bureau
18 that he has caused to be issued a writ of execution upon a
19 judgment obtained against the contractor or salesperson and the
20 officer executing the same has made a return showing that no
21 bank accounts or real property of the contractor liable to be
22 levied upon in satisfaction of the judgment could be found, or
23 that the amount realized on the sale of the accounts or real
24 property or of such of the accounts or real property as were
25 found, under the execution, was insufficient to satisfy the
26 judgment or stating the amount realized and the balance
27 remaining due on the judgment after application thereon of the
28 amount realized. A true and attest copy of the executing
29 officer's return shall be attached to an application for fund
30 reimbursement.
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1 (g) Partial payments.--In order to preserve the integrity of
2 the guaranty fund, the bureau may order payment out of the fund
3 of an amount less than the order issued by the court. The
4 balance remaining due to the claimant shall be paid from the
5 fund pursuant to subsection (h).
6 (h) Payment of outstanding balance.--If the money deposited
7 in the guaranty fund is insufficient to satisfy any duly
8 authorized claim or portion thereof, the bureau shall, when
9 sufficient money has been deposited in the fund, satisfy such
10 unpaid claims or portions thereof in the order that such claims
11 or portions thereof were originally determined.
12 Section 704. Limitation on recovery.
13 The bureau shall not provide from the fund:
14 (1) more than $10,000 to one claimant for acts or
15 omissions of one contractor or salesperson;
16 (2) more than $50,000 to all claimants for acts or
17 omissions of one contractor or salesperson unless, after the
18 bureau has paid out $50,000 on account of acts or omissions
19 of the contractor or salesperson, the contractor or
20 salesperson reimburses the amount paid from the fund to the
21 fund. In no case shall any one contractor or salesperson be
22 indebted, at any one time, to the fund for more than $50,000;
23 (3) any amount for attorney fees, consequential damages,
24 court costs, interest, personal injury damages or punitive
25 damages; or
26 (4) an amount as a result of a default judgment in
27 court.
28 (5) Additionally, a claimant shall not recover more than
29 the claimant's actual loss, to a maximum of $10,000, for a
30 claim made on one contract. A court may, however, allocate
19980S1382B1814 - 19 -
1 responsibility on one contract between contractors and
2 salespeople to a maximum combined responsibility of $10,000.
3 Section 705. Excluded claims.
4 (a) General rule.--A claim against the fund based on the act
5 or omission of a particular contractor or salesperson shall not
6 be made by:
7 (1) a spouse or other immediate relative of the
8 contractor or salesperson, or of a party which holds a
9 financial stake in the business of the contractor or
10 salesperson;
11 (2) an employee, officer, director, partner or other
12 party which holds a financial stake in the business of the
13 contractor or salesperson; or
14 (3) an immediate relative of an employee, officer,
15 director, partner or other party which holds a financial
16 stake in the business of the contractor or salesperson.
17 (b) Owners.--An owner may make a claim against the fund only
18 if the owner resides in the residence as to which the claim is
19 made or does not own more than three dwelling places, unless the
20 dwelling place as to which the claim is made is the primary
21 residence of the owner or the part of the building which houses
22 the primary residence of the owner.
23 Section 706. Procedure for submission of claims.
24 (a) Initiation of claim.--To begin a proceeding to recover
25 from the fund, a claimant shall submit to the bureau the
26 documentation required pursuant to section 703(f), if
27 applicable, and the following information on a form provided by
28 the bureau:
29 (1) The amount claimed based on the actual loss.
30 (2) The facts giving rise to the claim.
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1 (3) Any other evidence that supports the claim.
2 (4) Any other information that the bureau requires.
3 (b) Receipt of claim.--On receipt of a claim under this
4 section, the bureau shall send a copy of the claim to the
5 contractor alleged to be responsible for the actual loss.
6 (c) Order of payment.--Except as otherwise provided in this
7 act, the bureau shall pay from the fund approved claims in the
8 order submitted.
9 Section 707. Reimbursement of fund.
10 (a) General rule.--After the bureau pays a claim from the
11 fund:
12 (1) The bureau is subrogated to all rights of the
13 claimant in the claim up to the amount paid.
14 (2) The claimant shall assign to the bureau all rights
15 of the claimant in the claim up to the amount paid.
16 (3) The bureau has a right to reimbursement of the fund
17 by the contractor or salesperson for the amount paid from the
18 fund and interest on the amount at an annual rate of at least
19 10%, as set by the bureau.
20 All money that the bureau recovers on a claim shall be deposited
21 in the fund.
22 (b) Suit for nonpayment.--If, within 30 days after the
23 bureau gives notice, a contractor or salesperson on whose
24 account a claim was paid does not reimburse the fund in full,
25 the bureau may sue the contractor or salesperson in a court of
26 competent jurisdiction for the unreimbursed amount.
27 (c) Judgment.--The bureau is entitled to a judgment for the
28 unreimbursed amount if the bureau proves that:
29 (1) A claim was paid from the fund on account of the
30 contractor or salesperson.
19980S1382B1814 - 21 -
1 (2) The contractor or salesperson has not reimbursed the
2 fund in full.
3 (3) The bureau directed payment based on a final
4 judgment of a court of competent jurisdiction or an assurance
5 of voluntary compliance.
6 (d) Withholding of tax refund.--The bureau may refer to the
7 Department of Revenue for collection a debt owed to the bureau
8 by an individual or business on whose account or under whose
9 business a claim was paid from the fund and who is at least one
10 year behind in reimbursement payments to the fund.
11 (e) Bankruptcy proceedings.--For the purpose of excepting to
12 a discharge of an individual or business under Federal
13 bankruptcy law, the bureau is a creditor of the individual or
14 business for the amount paid from the fund.
15 Section 708. Investigation to satisfy claims of fund.
16 If the bureau pays any amount from the fund as a result of a
17 claim against a contractor or salesperson, the bureau may
18 conduct an investigation to determine if the contractor or
19 salesperson is possessed of assets liable to be sold or applied
20 in satisfaction of the claim on the fund. If the bureau
21 discovers any such assets, the bureau may take any action
22 necessary for the reimbursement of the fund.
23 Section 709. Revocation of certificate of registration by
24 department.
25 (a) General rule.--Subject to subsection (b), if the bureau
26 makes a payment of an amount as a result of a claim against a
27 contractor or salesperson, the department shall revoke the
28 certificate of the contractor or salesperson, and the contractor
29 or salesperson shall not be eligible to receive a new or renewed
30 certificate until that contractor or salesperson has repaid such
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1 amount in full, plus interest, from the time the payment is made
2 from the guaranty fund.
3 (b) Exception to revocation.--The department, with bureau
4 approval, may permit a contractor or salesperson to receive a
5 new or renewed certificate after that contractor or salesperson
6 has entered into an agreement with the bureau whereby the
7 contractor or salesperson agrees to repay the fund in full in
8 the form of periodic payments over a set period of time. If the
9 contractor or salesperson does not pay in accordance with the
10 terms of the agreement, suspension of the contractor or
11 salesperson's certificate of registration will be automatic.
12 CHAPTER 9
13 CRIMINAL ACTS, ENFORCEMENT AND PENALTIES
14 Section 901. Criminal acts.
15 (a) Offense defined.--A person commits home repair fraud if,
16 with intent to defraud or injure anyone or with knowledge that
17 he is facilitating a fraud or injury to be perpetrated by
18 anyone, the actor:
19 (1) makes a false or misleading statement for the
20 purpose of inducing, encouraging or soliciting a person to
21 enter into any written or oral contract or agreement for home
22 repair or purchase of home repair materials;
23 (2) performs services or uses materials which cause the
24 cost of the home repair to exceed any previously agreed-to
25 price without the permission of the consumer;
26 (3) misrepresents or conceals, while soliciting for a
27 home repair or purchasing home repair materials, the
28 contractor's or salesperson's real name, the name of the
29 contractor's business, the contractor's business address or
30 any other identifying information;
19980S1382B1814 - 23 -
1 (4) damages the property of a person with the intent of
2 having that person enter into a written or oral agreement or
3 contract for home repair or purchase of home repair
4 materials;
5 (5) misrepresents himself or another to be an employee
6 or agent of any unit of the Federal, Commonwealth or
7 municipal government or any other governmental unit or an
8 employee or agent of any public utility, with the intent to
9 cause a person to enter into, with himself, or another, any
10 contract or agreement for home repair or purchase of home
11 repair materials;
12 (6) executes or materially alters a home improvement
13 contract, mortgage, promissory note or other document
14 incident to performing or selling a home improvement; or
15 (7) directly or indirectly publishes a false, deceptive
16 or misleading advertisement about home improvement.
17 (b) Grading of offense.--
18 (1) A violation of subsection (a)(1), (3), (4), (5) or
19 (6) constitutes:
20 (i) a felony of the third degree if the amount of
21 the contract or agreement solicited or the amount of the
22 damage pursuant to subsection (a)(4) exceeds $1,000;
23 (ii) a misdemeanor of the first degree if the amount
24 of the contract or agreement solicited or the amount of
25 the damage pursuant to subsection (a)(4) is $1,000 or
26 less; or
27 (iii) a misdemeanor of the first degree if the
28 amount involved cannot be satisfactorily ascertained.
29 (2) A violation of subsection (a)(2) constitutes:
30 (i) a felony of the third degree if the amount of
19980S1382B1814 - 24 -
1 the overcharge is greater than 25% over the previously
2 agreed-to price;
3 (ii) a misdemeanor of the first degree if the amount
4 of the overcharge is 25% or less of the previously
5 agreed-to price; or
6 (iii) a misdemeanor of the first degree if the
7 amount of the overcharge cannot be satisfactorily
8 ascertained.
9 (3) A violation of subsection (a)(7) constitutes a
10 misdemeanor of the first degree.
11 (4) Amounts involved pursuant to one scheme or course of
12 conduct, whether involving one or more victims, may be
13 aggregated in determining the grade of the offense pursuant
14 to paragraphs (1) and (2).
15 (5) Where the person commits an offense under subsection
16 (a) and the victim of the offense is 60 years of age or
17 older, the grading of the offense shall be one grade higher
18 than specified in paragraphs (1), (2) and (3).
19 (6) Notwithstanding any other provisions of this
20 section, where the person commits a second or subsequent
21 offense described in subsection (a), the offense shall
22 constitute a felony of the second degree regardless of the
23 amount of money involved. For this paragraph to be
24 applicable, each element of the second or subsequent offense
25 shall have occurred after the first conviction. Paragraph (5)
26 shall not be applicable to individuals convicted pursuant to
27 this paragraph.
28 (7) In addition to any other penalty imposed by the
29 court, the court may revoke or suspend the certificate of
30 registration. At the time of sentencing, the court shall
19980S1382B1814 - 25 -
1 state the reasons for such revocation or suspension.
2 Section 902. Jurisdiction.
3 (a) District attorneys.--The district attorneys of the
4 several counties shall have the authority to investigate and to
5 institute criminal proceedings for any violation of this
6 section.
7 (b) Attorney General.--In addition to the authority
8 conferred upon the Attorney General by the act of October 15,
9 1980 (P.L.950, No.164), known as the Commonwealth Attorneys Act,
10 the Attorney General shall have the authority to investigate and
11 institute criminal proceedings for any violation of this section
12 or any series of such violations involving more than one county
13 of this Commonwealth or involving any county of this
14 Commonwealth and another state. No person charged with a
15 violation of this section by the Attorney General shall have
16 standing to challenge the authority of the Attorney General to
17 investigate or prosecute the case, and, if any such challenge is
18 made, the challenge shall be dismissed, and no relief shall be
19 available in the courts of this Commonwealth to the person
20 making the challenge.
21 Section 903. Unfair Trade Practices Act and Consumer Protection
22 Law.
23 (a) General rule.--A violation of any of the provisions of
24 this act shall be deemed a violation of the Unfair Trade
25 Practices and Consumer Protection Law. A court may suspend or
26 revoke a contractor's or salesperson's certificate of
27 registration for a violation of this act or a violation of the
28 Unfair Trade Practices Act and Consumer Protection Law.
29 (b) Court imposed suspension or revocation.--Upon the
30 request of the Attorney General or a district attorney, a court
19980S1382B1814 - 26 -
1 may suspend or revoke a certificate of registration for
2 violations of this act. The court may suspend or revoke a
3 certificate of registration as follows:
4 (1) For the first violation, up to one year.
5 (2) For the second violation, up to two years.
6 (3) For the third, and subsequent, violations, the court
7 may impose any term of suspension or revocation greater than
8 two years.
9 Section 904. Notice of suspension or revocation.
10 The Administrative Office of Pennsylvania Courts shall report
11 to the department and the bureau any suspension or revocation of
12 a certificate of registration ordered by a court.
13 CHAPTER 11
14 MISCELLANEOUS PROVISIONS.
15 Section 1101. Regulations.
16 (a) Departmental regulations.--The department shall
17 promulgate rules and regulations necessary to implement,
18 administer and enforce the provisions of Chapters 3, 5 and 7.
19 (b) Bureau regulations.--The bureau shall promulgate rules
20 and regulations necessary to implement, administer and enforce
21 the provisions of Chapter 7 and for the distribution of fees
22 payable to the fund.
23 Section 1102. Effective date.
24 This act shall take effect in 180 days.
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