Mark Rodio | Frantz Ward LLP
Recently, the Ohio Legislature changed a 12-year-old law applicable to home construction services. The original version only applied to contracts for new construction (or ancillary construction to the new construction, like a garage being built along with a house) for more than $25,000. Now, contracts for repair, renovation, remodeling or improvements greater than $25,000 will also be covered by the law.
The changes to the law were enacted by House Bill 50 (H.B. 50), which was signed by Gov. DeWine on June 21, 2024. It becomes effective September 19, 2024. H.B. 50 amends the Home Construction Service Suppliers Act (HCSSA) definition to include repair, improvement, remodel or renovation of an existing structure.
R.C. 4722.01 now will provide:
- (B) “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.
- (C) “Home construction service contract” means a contract between an owner and a supplier to perform home construction services, including services rendered based on a cost-plus contract, for an amount exceeding twenty-five thousand dollars.
The contract still has to be greater than $25,000 and the contractor still has to carry liability insurance of at least $250,000 in order to be covered by the HCSSA. Otherwise, the contract will still subject to Ohio’s Consumer Sales Practices Act (“CSPA”).
The main difference between the HCSSA and CSPA is that treble (3x actual) damages are available in some instances under the CSPA – they are not available under the HCSSA.
Because of its provision for treble damages, the CSPA is a powerful consumer remedy against deficient home improvement projects. With the new changes to the HCSSA, contractors performing repairs, renovations, remodeling or improvements greater than $25,000 (and who maintain liability insurance of at least $250,000) are no longer subject to the threat of treble damages. Under both the CSPA and the HCSSA, a court has discretion to award reasonable attorney’s fees in certain circumstances.
Before you enter into a contract for home improvements, you should consult legal counsel. Whether for more or less than $25,000, there are statutory protections for both consumers and contractors. Discussion of these protections will increase the chance that both the consumer and the contractor understand their rights and obligations under the contract.
When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net.