Home Renovation Projects: A Statutory Overview- Part 1 - Cohen & Malad, LLP

Home Renovation Projects: A Statutory Overview- Part 1


July 3, 2018

Home Renovation Projects: A Statutory Overview- Part 1

By: Aaron J. Williamson, Attorney

It pays to be in the know. This adage is all the more true when it comes to large and costly projects; especially when those projects concern the home. Whether you are a home improvement contractor or a homeowner, knowing the lay of the land is invaluable. And, in light of the relatively new changes in the law, a refresher seems in order.

This article will provide a quick overview of the Deceptive Consumer Sales Act, the Home Improvement Contracts Act, the Home Improvement Fraud Act, and the Statutory Home Improvement Warranties Act. It is important for consumers and renovators alike to have a general understanding of how these laws work at each stage of the renovation project. So the first key takeaway is: do not be unwary! Know the law.

A more in-depth analysis of these statutes and how they work together will be outlined in future articles.

Indiana’s Deceptive Consumer Sales Act

The purpose of Indiana’s Deceptive Consumer Sales Act (“DCSA”) is to protect consumers from deceptive and unconscionable consumer sales practices. Specifically, DCSA’s aim is to prevent those regularly engaged in consumer sales from making false or misleading statements about the goods or services sold. A person harmed under the statute can sue for, among other things, their actual damages and attorney’s fees.

Home Improvement Contract Act

Likewise, the purpose of Indiana’s Home Improvement Contract Act (“HICA”) is to prevent deceptive and unconscionable acts by, in part, requiring certain provisions and disclosures in all real property improvement contracts with an aggregate value of $150 or more. A good example of HICA in action is Warfield v. Dorey, 55 N.E.3d 887, 891 (Ind. Ct. App. 2016) (citing Hayes v. Chapman, 894 N.E.2d 1047, 1052 (Ind. Ct. App. 2008)) wherein the court said

–few consumers are knowledgeable about the home improvement industry or of the techniques that must be employed to produce a sound structure. The consumer’s reliance on the contractor coupled with well-known abuses found in the home improvement industry, served as an impetus for the passage of [HICA], and contractors are therefore held to a strict standard.

A violation of HICA constitutes a “deceptive act” under DCSA. HICA was recently amended and the changes took effect on July 1, 2017. A few highlights regarding changes to the HICA are the scope of coverage, additional required terms, and notices. As such, a contract or practice, which may have previously complied with the former version of the law may need to be revisited.

Home Improvement Fraud Act

The Home Improvement Fraud Act (“HIFA”), serves a similar purpose, i.e., forbidding home improvement contractors from making misrepresentations or false promises, giving misimpressions, acting deceptively, or the like.

In common law fraud or constructive fraud, a homeowner must show that they relied on false information from the contractor. Under the HIFA, no such reliance is required. Moreover, the statute defines what an “unconscionable contract” is and outlines what must be shown to prove it.

Home Improvement Warranty Act

The Statutory Home Improvement Warranties Act (“SHIWA”) does what its name suggests, i.e., imposes warranties related to home improvement projects. This statute deals with workmanship and materials, generally, as well as specific defects caused by faulty installation.

Conclusion

Future articles will discuss these statutes in depth, how they have been interpreted, the interplay between these statutes, and common issues that have been litigated surrounding these statutes.

If you are a home improvement contractor or a homeowner and you have questions about these statutes and how they affect your business or home, please contact me.

 

Disclaimer: These materials are made available for educational purposes only and are not intended as legal advice. If you have questions about any matters in these materials, please contact the author directly. The furnishing of these materials does not create an attorney-client relationship with the author or entities affiliated with the author.

Permissions: You are permitted to reproduce this material in any format, provided that you do not alter the content in any way and do not charge a fee beyond the cost of reproduction. Please include the following statement on any distributed copy: “By Aaron J. Williamson © Cohen & Malad, LLP – Indianapolis, Indiana. www.cohenandmalad.com”

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