Two major statutes can impact residential contractors and their interactions with their customers: the Consumer Sales Practices Act (“CSPA”) and the Home Construction Services Suppliers Act (“HCSSA”). Historically, Ohio courts have applied the HCSSA inconsistently leading to uncertainty for residential contractors. For example, previously Ohio courts held that the HCSSA was intended to apply only to new home construction, thereby excluding home remodeling jobs. Under this interpretation, remodeling jobs would then fall under the CSPA and not the more contractor friendly HCSSA. Under the CSPA, a residential contractor performing remodeling services could face significant damages including but not limited to treble damages for violations of the CSPA.
In June 2024, Governor Mike DeWine signed House Bill 50, which contained a major update to the HCSSA and provided much-needed clarity on the HCSSA’s scope. The updated version of the HCSSA now defines the term “home construction service” as “the construction of a residential building, including the creation of a new structure and the repair, improvement, remodel, or renovation of an existing structure.” Therefore, residential remodeling contracts that are priced over $25,000.00 are now covered by the HCSSA rather than the CSPA.
This change is good for residential contractors performing remodeling services because it eliminates the significant risk of treble damages under the CSPA. However, this change also comes with more responsibility and may mean that the current contracts that remodelers use are no longer compliant. Under the HCSSA, residential remodeling contracts must now include, among other things:
- The name, address, and phone number of the parties and the contractor’s tax identification number
- The location of the project
- A general description of the construction services
- The total estimated cost of the home construction service
- Anticipated commencement and completion dates for the project
- A provision for excess costs, allowing homeowners to choose between a written or oral estimate for unforeseen costs exceeding $5,000.00
- A certificate of insurance evidencing a minimum of $250,000.00 of coverage.
While these requirements may seem difficult to navigate, a Critchfield attorney can help. We recommend that residential contractors seek legal counsel as soon as possible to review their form contracts and eliminate the risk of non-compliance.
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