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New Rules, Registration for PA Home Improvement Contractors

April 13, 2009

Home improvement contractors doing at least $5,000 in home-improvement work per year must begin registering with the state to comply with a law meant to reduce fraud cases, according to the Pennsylvania Office of Attorney General.

The Home Improvement Consumer Protection Act, which requires the registration, also makes home-improvement fraud connected to work worth at least $2,000 a third-degree felony. The penalty could be up to a maximum of seven years in prison.  Registration costs $50.00 plus a $1.25 government “processing” fee to register.

The new law goes into effect July 1, 2009.

It affects anyone who owns or operates a home improvement business or who offers, performs, or agrees to perform home improvements in Pennsylvania.  Those exempt include very small contractors (less than $5,000 of work in a calendar year) and large retailers (net worth or more than $50 million).  All other contractors, including self-employed contractors and sole proprietorships, subcontractors and independent contractors, and corporations, partnerships and all other types of business entities must be registered, unless they fall into the two exemptions above.

The purpose is to create a Pennsylvania registry of building contractors with a registration number for each one. Then, consumers can contact the office to verify that a contractor is registered.

In theory, registration allows consumers to “quickly weed out people who aren’t really contractors,” said Nils Frederiksen, spokesman for the attorney general’s office.  He said the vast majority of complaints the office receives are from people who were scammed by fraudulent operators looking to “make a quick buck, never intending to do the work.”  Registration allows the office to track someone down if there is a complaint.  Failure to register can result in prosecution and a fine of $1,000.

Pennsylvania Attorney General Tom Corbett said in a news release that the office’s Bureau of Consumer Protection received more than 2,100 such calls about possibly fraudulent contractors in 2008.   For more information, visit the attorney general’s website:  http://www.attorneygeneral.gov/hic.aspx

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