Pennsylvania contractors: Installing the equipment does not necessarily mean that you've secured the sale.
Imagine this scenario.
A homeowner’s air conditioner stops working in the middle of summer. The homeowner calls an HVAC company, requests a replacement, receives a proposal, and signs a contract.
Two days later, the HVAC contractor installs the new system. The homeowner now has a functioning air conditioner.
The following day, the homeowner changes their mind and calls to cancel the contract.
Can the contractor insist on payment because the equipment has already been installed? Unfortunately, not necessarily.
And this isn’t just an HVAC issue. Pennsylvania’s Home Improvement Consumer Protection Act applies to a broad range of residential improvement work, including plumbing, electrical, roofing, remodeling and other home improvement projects. The same cancellation rules can affect contractors across these industries.
Pennsylvania's Three-Business-Day Cancellation Right
Pennsylvania’s Home Improvement Consumer Protection Act (HICPA) gives homeowners the right to cancel certain home improvement contracts within three business days of signing, without penalty. This right applies to covered residential HVAC installations, including central heating and air conditioning systems.
Importantly, the cancellation period generally applies regardless of where the contract was signed. And the fact that the contractor has already started or completed the installation does not automatically eliminate the homeowner’s right to cancel.
In other words, a contractor who installs a new HVAC system two days after signing the contract may still face a valid cancellation the following day. The homeowner’s decision to move forward with the installation, even after specifically requesting that the work be done immediately, does not by itself waive the statutory cancellation right.
This issue is not limited to HVAC contractors. Pennsylvania’s Home Improvement Consumer Protection Act covers a broad range of residential improvement work, including plumbing, electrical, roofing, remodeling and other home improvement projects.
What Happens to the Contractor’s Payment?
This is where it gets more complicated.
Under 73 P.S. § 517.7(g), Pennsylvania law provides a potential avenue for contractors to recover the reasonable value of work performed, even when a homeowner properly rescinds a contract. However, this is not an automatic right to collect the original contract price. The contractor must have complied with the applicable HICPA contract requirements, the work must have been requested by the homeowner, and a court must determine that denying recovery would be inequitable to the contractor.
In practical terms, if a homeowner refuses to pay after rescinding, the contractor may be able to pursue litigation to recover the reasonable value of the work. This, of course, creates real business exposure. The contractor could have purchased expensive equipment, paid employees or subcontractors, completed the installation, and still find itself having to litigate to recover its costs.
A Pennsylvania Superior Court case illustrates this issue. In Waldron Electric Heating and Cooling, Inc. v. Caseber, 174 A.3d 1123 (Pa. Super. 2017), a heating and cooling contractor completed work on the day the contract was signed. The homeowner subsequently rescinded within the statutory period. The court recognized that the contractor could pursue recovery under § 517.7(g), although it did not guarantee recovery but rather remanded the case for further proceedings.
The takeaway: Contractors may have a remedy, but it is not a substitute for protecting themselves before installation.
Is There an Exception for Emergency HVAC Work?
Pennsylvania law indeed recognizes an exception for qualifying emergency work.
For example, a heating system failure during freezing weather may create conditions that render a home uninhabitable or potentially uninhabitable. A qualifying emergency may allow the contractor to obtain the homeowner's written authorization to proceed immediately and waive the three-business-day cancellation right.
That said, not every urgent replacement request qualifies. For example, a homeowner’s desire to replace an aging system quickly, or the inconvenience of being without air conditioning for a period of time, does not automatically establish a bona fide emergency.
Moreover, for the emergency exception to apply, Pennsylvania law has specific requirements, including that the homeowner initiate the contact, the contractor first provide a written estimate, and the homeowner sign a separate emergency work authorization containing the required statutory language and meeting the prescribed format. Simply adding a waiver to the standard installation contract is not enough.
What Should Contractors Do?
The best approach is to address the cancellation period before scheduling the installation.
Consider these important steps:
1. Review your contracts. Make sure your residential installation agreements comply with HICPA, including the required cancellation notice and all other statutory requirements.
2. Build the cancellation period into scheduling. When practical, schedule installation after the three-business-day period has expired.
3. Understand the emergency exception. If a job genuinely qualifies, use the required emergency authorization procedure. Do not assume that a homeowner’s request for immediate service eliminates the cancellation right.
4. Train your staff. Salespeople and office personnel should understand that a homeowner can cancel within the statutory period, even after installation has begun or been completed.
5. Document everything. Keep signed contracts, estimates, installation records, communications and evidence of equipment costs. If a homeowner rescinds, this documentation may be important in pursuing recovery.
The Bottom Line
A completed installation does not necessarily mean a completed sale under Pennsylvania law.
For contractors, the financial consequences can be significant. A homeowner may have a new, functioning heating system, for example, and still have the right to rescind the contract within three business days. Although Pennsylvania law provides a potential avenue for recovering the reasonable value of work performed, that remedy may require litigation and is not guaranteed.
The better strategy is to understand the cancellation rules before the equipment goes in, rather than trying to recover the money after the homeowner changes their mind.
Robyn Kotzker Law supports contractors and home improvement businesses with practical legal guidance, contract drafting and review, employment matters, and proactive risk management to help protect their businesses and keep projects on track.
*This article is for general informational purposes and is not legal advice.The application of Pennsylvania’s home improvement laws depends on the particular facts and circumstances.
