Pennsylvania requires a home improvement arbitration clause to say whether the award is binding, and Montgomery County's court arbitration covers claims up to $50,000

Section 7(d) of Pennsylvania's Home Improvement Consumer Protection Act, 73 P.S. § 517.7, allows an arbitration clause in a home improvement contract only if the clause states whether the arbitrator's decision is binding or may be appealed to the court of common pleas. Arbitration means a private arbitrator, rather than a judge, decides a dispute.

The choice matters because Pennsylvania's Judicial Code lets a court overturn a binding common law award only in narrow cases. A contract with no arbitration clause sends a dispute to court, and in Montgomery County a claim of $50,000 or less goes first to a board of three local lawyers, with a right to a new trial. These rules come from the statute text posted by the General Assembly and the county court's local rules, both checked November 2, 2026.

The other two cover what the clause means. It must state clearly whether the arbitration decision is binding or may be appealed to the court of common pleas. It must also state whether the facts of the dispute, the related documents and the decision are confidential.

A clause that misses any requirement can be declared void by the court on a motion from either side, and the act says the motion must be "filed prior to the commencement of arbitration." The act also leaves a court free to set aside an arbitration clause on any other ground Pennsylvania law allows.

For common law arbitration, 42 Pa.C.S. § 7341 says the award is binding. A court may vacate or change it only when a party was denied a hearing, or when fraud, misconduct, corruption or another irregularity caused an unjust, inequitable or unconscionable award. A clause that says the decision may be appealed to the court of common pleas gives each side a way to bring the dispute before a judge.

Montgomery County's Local Rule 1301 does this for civil cases in its Court of Common Pleas where the amount in controversy is $50,000 or less per plaintiff, excluding real estate title and equity cases. The three arbitrators are lawyers in active practice with their main office in the county. Local Rule 1302 pays each arbitrator $100 a case from county funds, or $25 when the defendant does not appear.

Either side may appeal the award for a trial de novo, meaning a new trial in front of a judge as if the arbitration had not happened. Under statewide Rule 1308, the notice of appeal is due within 30 days after the prothonotary notes on the docket that notice of the award was sent. The appealing side pays the arbitrators' compensation, capped at half the amount in controversy, and cannot recover it later. The county prothonotary is the court's civil records office.

Under Contract A, the arbitrator's award stands unless the homeowner can show one of the problems § 7341 lists. Under Contract B, the $8,000 claim is under the county's $50,000 limit, so three county lawyers hear it first. If the homeowner disagrees with their award, a notice of appeal within 30 days and the $450 fee on the county's schedule bring a new trial before a judge.

If Contract A's clause were printed in small type on the signature page, either side could ask the court to void it under section 7(d). That motion has to come before the arbitration starts.