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Legislation Permits Home Improvement Contracts Based on Time and Materials
2014-07-02

        On Sunday night the House unanimously passed legislation sponsored by Rep. Thomas Killion (R-Delaware/Chester) that amends the Home Improvement Consumer Protection Act to allow home improvement contractors to offer contracts based on "time and materials."

        "Current law requires a valid home improvement contract to include the total price of the project up front," said Killion.  "Having to provide a predetermined fixed cost effectively renders a time and materials provision virtually unenforceable.  My bill rectifies this by enabling contractors and consumers to enter into a contract that estimates the costs and provides a ceiling above which the contract cannot exceed without mutual consent."

        The contracts allowed under House Bill 1543 would specify the work to be performed and at what hourly rate.  Contracts would be based on the actual cost of labor, materials and use of equipment, and an agreed to percentage of the total costs to cover the contractor's fee and overhead costs for the project.

        Under Killion's bill, a time and materials contract must include a written cost estimate and a statement that the costs may not exceed 10 percent above estimate.  It must also contain the total potential cost of services, which would include the initial cost estimate and the potential 10 percent increase above estimate.  Finally, the contract must contain a statement that the contract cannot exceed the total potential cost of services without a written change order signed by both the homeowner and contractor.

        Currently, all contractors who perform at least $5,000 worth of home improvements per year must register with the Office of Attorney General. Killion's bill requires all registration fees paid by the contractors be appropriated to the Office of Attorney General to cover administration and enforcement of the Home Improvement Consumer Protection Act.

        The bill now goes to the Senate for consideration.


 

 

 

 

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