Eleventh District Court of Appeals Declares Remodeling is Not Construction under Home Construction Service Suppliers Act

On December 12, 2022, Ohio’s Eleventh District Court of Appeals ruled that the Home Construction Service Suppliers Act (“HCSSA”), an act that distinguishes home construction from other sales that fall under Ohio’s Consumer Sales Practices Act (“CSPA”). In general, the HCSSA and CSPA are similar, but the big difference lies in the penalty damages available to consumers under the CSPA. Under the CSPA, consumers who are victims of deceptive or unconscionable acts by a seller may recover up to three times their economic damages as a penalty. Under the HCSSA, this language is removed, and the penalty damages for aggrieved homeowners are limited to $5,000. The HCSSA only applies to home construction in an amount greater than $25,000.

In the case at issue, Beder v. Cerha Kitchen & Bath Design Studio, L.L.C., 2022-Ohio-4463, the question presented to the Court was, does remodeling work fall within the HCSSA? The Eleventh District held that application of the HCSSA depends on the meaning of the word “construction” that appears throughout the statute. The Eleventh District held that construction means the creation of something new, and remodeling is not construction. As such, the Eleventh District held that remodeling is not “home construction” and thus does not fit within the HCSSA.

This is a big decision for homeowners and construction professionals alike. While the HCSSA already only applies to contracts in excess of $25,000, construction professionals, at least in Ashtabula, Geauga, Lake, Portage, and Trumbull counties, can no longer be assured that remodeling contracts fit within the HCSSA and must also be concerned with the CSPA.

Of course, all this really means in practice is the same it as has always meant, treat customers fairly. If professionals treat customers and homeowners fairly, they will not subject themselves to the penalty damages and attorney’s fees that arise out of the HCSSA or CSPA.