Painful Lesson in Pennsylvania

Ty and Carissa Schott planned to add a pool in the back yard of their Allegheny County Pennsylvania home. Country Pools bid $53,160 for the work and got the job. The Schotts advanced $26,580 as a deposit. To get their backyard ready for the pool, the Schotts paid separate contractors over $20,000 to install a retaining wall and perimeter fence.

Before signing the contract, the Schotts asked Country Pools whether permits were required from their municipality, Franklin Park Borough. Country Pools suggested that “no permits would be necessary until installation of the swimming pool." After completion of the retaining wall, the Schotts applied for their permits. Surprise! Franklin Park's zoning regulations prohibit construction of their swimming pool. The Schotts applied for a zoning variance. No luck. Application denied. The Schotts weren’t going to get their pool.

The Schotts demanded a full refund, including money spent on the retaining wall, fence and permit fees. County Pools refunded $20,429 but refused to refund the remaining $6,151.

The Schotts filed suit and made three claims:

1. Unjust enrichment for the $6,151 Country Pools refused to refund.
2. Omission of contract terms required by Pennsylvania's Home Improvement Consumer Protection Act (HICPA).
3. Fraudulent or deceptive conduct in violation of Pennsylvania’s Unfair Trade Practices & Consumer Protection Law. UTPCPL allows the court to award three times actual damages plus attorney fees. The Schotts claimed actual damages of $32,000.

You decide.

Should County Pools be responsible for the Schotts’ loss, including triple damages and attorney fees?

We don’t know the answer yet. Pennsylvania’s appellate court ruled last month that County Pools’ liability insurance doesn’t cover the loss. “"The purpose and intent of such an insurance policy is to protect the insured from liability for essentially accidental injury to the person or property of another rather than coverage for disputes between parties to a contractual undertaking."

The case goes back to the trial court to decide how much County Pools owes the Schotts. But this is clear. A few minutes of contract drafting could have saved County Pools thousands in legal fees and damages.

First, An extra sentence in County Pools’ contract with the Schotts could have headed off this dispute:

Except as provided elsewhere in this agreement, owner will secure all approvals for the project that are required by government authority, including planning, easements, remediation, environmental, and zoning approvals.

This clause makes it clear. The owner is responsible for approvals that have nothing to do with construction. Every pool contract needs a sentence like this.

Second, every Pennsylvania residential contractor needs to know HICPA. Work valued at $500 or more on any existing residential property requires a written agreement with specific notices and disclosures. The definition of “home improvement” includes just about every type of repair, replacement or installation, including swimming pools. The act applies to work on a single unit in a multi-family residence (such as a rented apartment or condo) or a duplex, even if the owner doesn’t reside on the premises. Ignoring HICPA makes the contract void and unenforceable. Worse, violation of HICPA is automatically a violation of Pennsylvania’s UTPCPL.

Protect yourself. Construction Contract Writer drafts residential agreements that comply perfectly with Pennsylvania law – and the law in any other state, no matter the type of work or the site. The trial version is free.