In 2012, the Ohio General Assembly gave some relief to #homebuilders and #contractors, and carved out “home construction services” from the Consumer Sales Practices Act – the Ohio consumer protection law that can impose treble (aka, triple) damages and legal fees against contractors (See ORC 1345.02).
That carve-out and resulting statute is the Home Construction Service Suppliers Act, ORC 4722.01. The HCSSA is still homeowner-friendly, but it is far more reasonable and fair with respect to contract disputes.
Since then, many in the #homeconstruction industry have believed they were freed from the rigidity and harshness from the #CSPA, as long as their contract was for more than $25,000.
In other words, home remodeling contractors can potentially be sued for triple damages and the homeowner’s legal fees, even where their project is for more than $25,000.
The HCSSA says “home construction service” means the construction of a residential building. This court held that “construct” means to build new, not to remodel or repair – which is candid ignores what a residential builder/contractor does. The statute also says that an HCS includes work on an individual dwelling unit within a structure containing 4 or more units… which means if a contractor guts and rebuilds any portion of an apartment or condo unit in a larger building, that falls with the HCSSA. But if you gut and rebuild any portion of a single family home, it doesn’t – the CSPA controls.
This is only one appellate court’s opinion, and it’s certainly possible the Ohio Supreme Court and/or the General Assembly get back involved (or both). But for the foreseeable future, this does not bode well for #residentialconstruction companies that don’t build new houses. Home remodeling and renovation contractors need to immediately re-evaluate their #constructioncontracts and processes to ensure they are not violating the CSPA, which once again seems to be the primary statute governing their work.
Our team at the Truax Law Group offers elite legal services, trusted advice, and strategic guidance to the construction industry and small business owners in Northern Ohio and throughout the state. Have questions or concerns around your contracts? Feel free to give us a call or send us an email here >> and a team member will be touch!