HB50 Redefines the Scope of the Ohio Home Construction Suppliers Services Act
Earlier this week, Governor Mike DeWine signed HB 50, which (among other things) redefined the scope of the Ohio Home Construction Suppliers Services Act (“HCSSA”) to include repair/remodeling/renovation. Specifically, it amended the definition of “Home construction service” under R.C. 4722.01(B) to state:
“Home construction service” means the construction of a residential building, including the creation of a new structure and the repair, improvement, remodel, or renovation of an existing structure. “Home construction service” does not include construction performed on a structure that contains four or more dwelling units, except for work on an individual dwelling unit within that structure, or construction performed on the common area of a condominium property.
The full text of HB 50 can be found here: https://search-prod.lis.state.oh.us/solarapi/v1/general_assembly_135/bills/hb50/EN/05/hb50_05_EN?format=pdf
The law supersedes recent decisions out of Ohio’s 11th and 5th District Courts of Appeal (Beder v. Cerha Kitchen and Bath Design Studio, LLC and Tomlinson v. Mega Pool Warehouse) holding that the Consumer Sales Practices Act (“CSPA”), not the HCSSA, applies to remodeling projects and the HCSSA applies exclusively to new home construction.
The Ohio Homebuilders Association lobbied hard for this change because it removes remodeling/renovation work outside the scope of the CSPA (so long as the contract price is $25,000 or more). While the HCSSA imposes different, specific requirements on builders (and now remodelers) than the CSPA (and still allows for the recovery of attorney’s fees and up to $5,000 in non-economic damages), it eliminates the exposure to treble damages. This is obviously great news for remodeling/restoration contractors (and really any that regularly do consumer-facing projects in excess of $25,000), but it also means that their contracts are (most likely) no longer HCSSA compliant.
The HCSSA requires a contract to:
- State the name, address, and phone number of the parties and contractor’s tax identification number.
- Identify location of the project.
- Provide a general description of the construction services, including any appliances or other goods and services to be furnished.
- State anticipated commencement and completion dates for the project.
- State the total, estimated cost of construction and installation, delivery, or other costs not included in the estimate.
- Include a provision stating:
EXCESS COSTS
IF AT ANY TIME A HOME CONSTRUCTION SERVICE REQUIRES EXTRA COSTS ABOVE THE COST SPECIFIED OR ESTIMATED IN THE CONTRACT THAT WERE REASONABLY UNFORESEEN, BUT NECESSARY, AND THE TOTAL OF ALL EXTRA COSTS TO DATE EXCEEDS FIVE THOUSAND DOLLARS OVER THE COURSE OF THE ENTIRE HOME CONSTRUCTION CONTRACT, YOU HAVE A RIGHT TO AN ESTIMATE OF THOSE EXCESS COSTS BEFORE THE HOME CONSTRUCTION SERVICE SUPPLIER BEGINS WORK RELATED TO THOSE COSTS. INITIAL YOUR CHOICE OF THE TYPE OF ESTIMATE YOU REQUIRE:
….. written estimate ….. oral estimate
- The contractor must also attach a certificate of insurance to the written agreement evidencing that it maintains at least $250,000 of coverage.
As an employer, staying informed and taking proactive steps to comply with this new regulation is crucial. You should consult with your legal counsel for any questions about this new rule. Harpst Becker’s attorneys are available to field questions and address your concerns.
The HCSSA also includes several other requirements and prohibitions that all residential contractors should familiarize themselves with. The legal team Harpst Becker, LLC can help ensure your business is complying with the HCSSA and CSPA. If you have questions about the HCSAA, CSPA or Ohio construction law, or for further information, contact Attorney Nicholas Horrigan at 330-983-9943 or nhorrigan@harpstbecker.com.