Ohio’s Home Construction Service Suppliers Act ("HCSSA") has been law since 2012. Apparently the law has never been interpreted or enforced by an appellate court -- until last month. That’s when Ohio’s Eleventh District Court of Appeals decided the case of Beder v. Cerha Kitchen & Bath Design Studio, LLC.
By way of background: Ohio’s HCSSA is a consumer protection statute. Specific acts are defined as deceptive. Changes to the contract price have to meet reasonable standards. Owners are entitled to notices and disclosures. Anyone injured by deceptive acts has a statutory remedy. Last month, the Act finally got its first test in court.
It didn’t go well.
Ilia Beder and Raimonda Beder filed suit under HCSSA after their home remodeling project fell into acrimony. The Beders claimed their contractor, Cerha, unreasonably delayed the work, performed defective work, was abusive and was not registered with the city of Mentor. At trial, both the Beders and Cerha claimed breach of contract.
Major irony: The trial court ruled that Ohio’s HCSSA applied to the Beder job. So far, so good. And then the court awarded the contractor damages for breach of contract. The Beders got nothing. Scratch Ohio’s stab at protecting home owners. But keep reading. It gets worse.
Remodeling Isn’t Construction
The Beder’s job was remodeling. No
doubt about that. According to Appellate Court Presiding Judge Eklund, HCSSA applies
only to new construction, not remodeling. His decision hinged on the meaning of
“construction”. Judge Eklund relied on a definition of “construction” adopted nearly
30 years ago by the Ohio Supreme Court. "Construction" is the
creation of something new, as distinguished from the repair or improvement of
something already existing.
That’s going to be news to thousands of Ohio home improvement specialists – men and women who considered themselves construction contractors. Not so, according to Judge Eklund. They’re not in the construction industry.
I prefer the dissenting opinion by Judge Westcott Rice. True, HCSSA does not define “construction”. But any modern understanding of “construction” in the residential context has to include home improvement. Moreover, part of the law is nonsense if remodeling isn’t considered construction. Section 4722.01(B) of the act makes HCSSA applicable to work on a single apartment even if the structure has many apartments. Work on that single unit is almost certainly remodeling. Under HCSSA, it's also construction.
Today, most new residential construction is managed by merchant builders or spec builders. Custom-built homes are the exception in most communities. Judge Eklund’s ruling would apply HCSSA exclusively to custom-built homes, a small and dwindling segment of the housing market.
Even more persuasive: Most states have adopted consumer protection statutes to help owners planning home improvements. In Ohio, that was HCSSA. The Beder decision leaves Ohio in the minority of states without a home improvement statute.
I don’t expect this situation to last for long. Someone in the Ohio legislature is reading the Beder decision right now and shaking their head in disbelief. Expect the Ohio legislature to clean up language in HCSSA at their next opportunity.
