Ohio’s Remodeling Law is in Limbo

A recent decision by Ohio’s Eleventh Appellate District has turned what may seem like an easy question – does remodeling count as construction? – into a confusing and potentially costly ruling for homebuilders and homebuyers in Ohio.

In Beder v. Cerha Kitchen & Bath Design Studio1, the appeals court ruled that home remodeling does not count as construction under the Ohio Home Construction Service Suppliers Act (HCSSA). An appeal to the Ohio Supreme Court was recently dismissed – meaning that the decision now stands as precedent. Other courts have already followed this ruling, leading to contradictory interpretations of the HCSSA and headaches for home construction litigants.

When customers sue builders, they ordinarily allege violations of the HCSSA. The HCSSA provides regulations for homebuilders and sets standards for purchasers seeking to sue. An alternative statute, the Consumer Sales Practices Act (CSPA), is meant to apply to small projects and non-construction transactions (such as buying clothing). Previously, large-scale remodeling contracts were assumed to be construction – after all, most of the same considerations and risks are involved. Adding a wing onto an existing house is much closer to building a house than it is to purchasing a pair of pants. But the Cerha ruling creates new uncertainty as to which projects are considered “construction.” For example, the Fifth District recently relied on Cerha to rule that a newly built $75,000 outdoor pool was not “construction” because it was built next to an existing house, and therefore counted as a remodeling project2. This contradicts prior rulings – for instance, a 2022 ruling in the Ninth District found that the HCSSA covered a dispute arising from a $27,380 attached garage project.3

The Cerha decision will increase the costs of legal compliance faced by home builders and, consequently, will increase the cost of construction and housing. Housing contractors will need to draft a new set of contracts for “non-construction” remodeling projects. For projects which walk the line between remodeling and “construction,” or which involve some combination of the two, contractors may have to draft “hybrid” contracts with the required provisions and disclosures for both statutes. Plaintiffs have taken to suing under both laws just in case, whenever a dispute arises – meaning the parties must litigate twice as many claims for the same issue. This hurts plaintiffs, by making litigation more costly and timeconsuming. It leads to higher expenses for builders, too, and those costs are inevitably passed on to purchasers.

It is harmful to complicate the law on this issue without good reason, because as the applicable law grows more complex, the uncertainty and risk of errors also increases – and disputes become harder to resolve without resorting to litigation. Ohio must decide what “construction” means – one way or another.

1 Beder v. Cerha Kitchen & Bath Design Studio, LLC, 11th Dist. Geauga No. 2022-G0008, 2022-Ohio-4463.

3 State ex rel. DeWine v. Wolfe, 9th Dist. Summit C.A. No. 30021, 2022-Ohio-1580.