In Pennsylvania, a home improvement contract isn't enforceable against you unless it's written, signed and includes the contractor's registration number and the other terms the law requires. You can cancel within three business days of signing. On jobs over $5,000, the deposit can't be more than one third of the price, plus special order materials.

What has to be in the contract?

Section 7 of the Act lists it. The contract must:

• be written, legible and include the contractor's registration number;
• be signed by you and the contractor or its salesperson;
• contain the whole agreement, with all required notices attached;
• show the date;
• give the contractor's name, address and phone number, and a post office box alone doesn't count;
• give approximate start and completion dates;
• describe the work, the materials and the specifications, which can't change without a written change order signed by both of you;
• state the total price, or a time and materials arrangement with its own limits;
• list the down payment and any money for special order materials separately;
• name all subcontractors known at signing, with addresses and phone numbers;
• confirm the contractor carries at least $50,000 in personal injury and $50,000 in property damage liability insurance, and show the current amounts;
• include the Attorney General's toll-free number and a notice of your right to cancel.

The contractor has to give you a completed copy at signing, free.

How does the three-day cancel work?

You can rescind the contract without penalty within three business days of signing, no matter where you signed it. There's a narrow emergency exception under the state's consumer protection law.

Use it if you feel pressured. Send the cancellation in writing in a way you can prove, and keep a copy.

How much can a contractor take up front?

Two rules here.

• Nothing before signing. A contractor can't demand or take any payment before the contract is signed.
• The deposit cap. On contracts over $5,000, the deposit can't be more than one third of the contract price, or one third plus the cost of special order materials listed in the contract.

So on a $30,000 kitchen, the deposit tops out at $10,000 plus any special order cabinets or counters itemized in the contract. Some large retailers that post a letter of credit with the state are exempt from the cap.

What about cost overruns and changes?

Changes need paper. The law makes it a prohibited act to deviate from the plans or specifications in any material way without a written, dated change order signed by both of you that shows the price change for each deviation.

If the contract is time and materials, the contractor has to give you a written initial cost estimate before starting. The contract has to say the cost can't go more than 10% over that estimate without a signed change order, and show the total potential cost in dollars.

Which clauses can you void?

If a home improvement contract includes certain clauses, you can void the contract. The list includes:

• a hold harmless clause;
• a waiver of health, safety or building code requirements;
• a confession of judgment;
• a waiver of your right to a jury trial;
• a promise not to raise claims or defenses;
• a provision awarding the contractor attorney fees and costs;
• a waiver of your rights under the Act.

Arbitration clauses have strict format rules: capital letters, 12-point bold type, a separate page, and separate signature lines.

What if the contractor takes the money and disappears?

The law gives you a refund right in a specific situation. If no substantial part of the work has been done and more than 45 days have passed since the contract's start date, you can send a written refund request by certified mail. The contractor must refund what you paid within 10 days of accepting that letter or refusing it. Abandoning a job without justification is also a prohibited act.

Violations count under Pennsylvania's consumer protection law. Contact the Attorney General's HIC helpline at 1-888-520-6680.

First, make sure the contractor is registered. See how to check a contractor's registration.

What does a sensible payment schedule look like?

The law sets the deposit cap, but it doesn't set the rest of the schedule. That's up to you and the contractor, so negotiate it before you sign.

A schedule tied to finished stages of the work, rather than dates on a calendar, protects you best. Roof tear-off done, new roof on, final cleanup. Keep a meaningful final payment until the work is complete and any required final inspection has passed. If the job needs a permit, ask for a copy of the permit before work starts.

FAQ

Can I cancel a home improvement contract in Pennsylvania?

Yes, without penalty within three business days of signing, wherever you signed it.

How big a deposit can a Pennsylvania contractor ask for?

On contracts over $5,000, no more than one third of the price, or one third plus listed special order materials.

Does a home improvement contract have to be in writing?

Yes. Without the required written terms and the registration number, it isn't enforceable against the owner.

Can a contractor change the plans without asking?

Not in any material way without a written, dated change order signed by both of you with the price change.

What if the contractor never starts the job?

If no substantial work is done and 45 days have passed since the start date, send a certified refund request. The contractor must refund within 10 days.

Next step

Before you sign, ask a licensed local agent or an attorney to read the contract with you if the job is big, especially if you're making repairs for a sale or after an inspection.

Sources: Home Improvement Consumer Protection Act, Act 132 of 2008; PA Office of Attorney General, Home Improvement Contractor Verification.

Pennsylvania's Home Improvement Consumer Protection Act says contractors can't advertise or do home improvement work without first registering with the Attorney General's office, unless they did less than $5,000 of home improvements the previous tax year. You can look a contractor up on the Attorney General's online search, or call the HIC helpline at 1-888-520-6680.

Who has to register?

The law defines a contractor broadly. It's anyone who owns and runs a home improvement business, or who offers or agrees to do home improvement work. That includes subcontractors who work for big-box retailers' installation programs.

Home improvement covers work on a private residence or the land next to it where the total price is more than $500, including:

• repair, remodeling, demolition, renovation and installation;
• driveways, pools, porches, garages, roofs, siding, insulation and solar;
• flooring, patios, fences, sheds, painting, doors, windows and waterproofing;
• central heating, air conditioning, storm windows and awnings.

A few things fall outside it, like building a brand new home or just selling materials without installing them.

Who's exempt from registering:

• people whose total home improvement work came to less than $5,000 in the previous tax year;
• home improvement retailers worth more than $50 million, and their employees who don't do the work.

Here's the practical problem. You usually can't tell whether a small contractor is under $5,000 a year. If someone quoting a $20,000 roof says they don't need to register, that should make you nervous.

How do you look a contractor up?

Three ways:

• The online search. The Attorney General runs a Home Improvement Contractor Search where you can enter a registration number or name. It shows active registrations.
• The contract. The law requires the contractor's registration number on every home improvement contract. Look it up before you sign.
• The helpline. Call 1-888-520-6680 if you can't find the contractor online or want to report one that isn't registered. You can also email HIC@attorneygeneral.gov.

Match the business name, address and phone on the contract to the registration. The law says a post office box alone doesn't count as an address on the contract.

What does registration actually prove?

Less than people assume. The Attorney General is direct about it: registration isn't an endorsement of a contractor's honesty or quality of work, and it isn't a judgment of skill.

What it does mean is that the contractor gave the state some information. Applicants disclose their business details and history, and they have to show liability insurance of at least $50,000 for personal injury and $50,000 for property damage. Every contract must also list the insurance the contractor carries when it's signed.

So registration is a floor, not a recommendation. The Attorney General suggests you also:

• check references carefully;
• get more than one bid;
• look for complaints with the Better Business Bureau.

I'd add: ask for a copy of the insurance certificate, and call the insurer to confirm it's current.

Do electricians and plumbers need something else?

Possibly. HICPA generally stops cities and towns from requiring their own home improvement contractor registration or fees. But the law says it doesn't affect existing local licensing for electricians, plumbers and other trades where licensing depends on testing or specific training. Building permits and local code enforcement also still apply.

So for electrical or plumbing work, ask your municipality what license and permits it requires, and ask the contractor who pulls the permit.

What happens if a contractor isn't registered?

Failing to register is a prohibited act under the law, and violations of HICPA count as violations of Pennsylvania's Unfair Trade Practices and Consumer Protection Law. Report unregistered contractors to the helpline.

For the rules on the contract itself, deposits and cancellation, see Pennsylvania home improvement contract rules.

What should you ask before you hire?

A short list covers most of the risk. Ask every contractor you're considering:

• What's your registration number? Then look it up yourself.
• Can you send a current certificate of insurance? Call the insurer listed to confirm it's active.
• Who will be doing the work, your crew or subcontractors? The contract has to name known subcontractors, so get names now.
• Who pulls the building permit, and when?
• Can I talk to two or three recent customers with similar jobs?
• What's your payment schedule? On jobs over $5,000, the deposit is capped by law.

Pay attention to how they answer, not just what they say. A contractor who gets vague about the registration number or insurance is telling you something.

Be extra careful after storms. Out-of-town crews often show up knocking on doors after hail or high winds, and the pitch usually involves urgency. Check registration before anyone climbs on your roof, and don't sign on the spot. You'd have three business days to cancel anyway, but it's easier not to sign at all.

FAQ

Do home improvement contractors need to register in Pennsylvania?

Yes, with the Attorney General's office, unless their total home improvement work was under $5,000 in the previous tax year.

How do I look up a contractor's registration?

Use the Attorney General's Home Improvement Contractor Search, or call 1-888-520-6680.

Does registration mean the contractor is good?

No. The Attorney General says registration isn't an endorsement of honesty, quality or skill.

What insurance must a registered contractor carry?

At least $50,000 for personal injury and $50,000 for property damage.

Does the contract have to show the registration number?

Yes. A home improvement contract isn't valid or enforceable against the owner without it.

Next step

If you're fixing up a house to sell or just bought one, ask a licensed local agent which contractors past clients have used, then check each one's registration and insurance before you get bids.

Sources: Home Improvement Consumer Protection Act, Act 132 of 2008; PA Office of Attorney General, Home Improvement Contractor Verification; Attorney General Home Improvement Contractor Search.