Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, March 3, 1991 TAG: 9103040308
SECTION: HOMES PAGE: E-6 EDITION: METRO
SOURCE: SANDRA BROWN KELLY/ HOMES EDITOR
DATELINE: LENGTH: Long
That's why, the state's Board for Contractors in 1990 designed new contractor regulations to take effect Jan. 1 of this year.
The effort backfired. Even as Virginia contractors were opening letters outlining the changes, the Home Builders Association of Virginia was getting legislation passed to change the new regulations and curtail the power of the state board.
The Department of Commerce regulates 25 programs involving 240,000 licensees, said Kelly Ragsdale, assistant director of the contractors' board. Just 19 percent of licensees, 46,000, are contractors, but they accounted for 46 percent of the complaints in fiscal 1990.
In the first seven months of fiscal 1991, 54 percent of the commerce department's complaints were against contractors, said Ragsdale.
Carl Bowmer, counsel for the Home Builders Association, said that if the state's 45,000 contractors do 10 transactions a year, that totals 450,000 transactions, and means that complaints were brought against .0024 percent of 1 percent of the jobs. He said he considered that a pretty good track record, and that the home builders thought the "cure is worse than the disease."
Before the new regulations could be distributed to the 45,000 or so contractors licensed by the state, the Home Builders Association of Virginia had gotten legislation introduced to change the rules.
The main issues were the state board's requirements that contractors use a nine-point written contract and that contractors distribute to customers an information statement on the licensing program for contractors and the avenues for consumer recourse for poor service.
Bowmer said the association thought the regulations would place too heavy a burden of paperwork on small contractors.
Bowmer said that the way the regulations were worded, if a contractor failed to give out the consumer statement and get a signed acknowledgement of its understanding, the contractor would be subject to disciplinary action.
Ragsdale, however, said no disciplinary action would have ever taken place unless there was a complaint against a contractor. He said his staff of 20 investigators is not enough to routinely police contractors to determine if they were using written contracts.
"Sometimes it's the homeowner who is the jerk, and if there was a written contract it would protect the contractor," said Ragsdale.
Ragsdale said he regretted that the legislation was passed before the new procedures had even been tried out. He said he had hoped that the contractors' group would have "let them work for at least a year, and see what happened, and then make any changes needed through regulatory review."
Bowmer said it was the home builders' belief that no other board had ventured so far as the board of contractors did in the new regulations.
"Our association said, `Fine, we will agree with written contracts, but we think all these nine provisions are just onerous." The board asked Sen. Elliot Schewel, D-Lynchburg, to introduce a bill that shortened the number of contract terms to four and eliminated the consumer information sheet requirement.
Schewel said the home builders persuaded him that the state regulations were too burdensome on small contractors.
Robert Flynn of Moneta, president of the Roanoke Regional Home Builders, said he considered the consumer information requirement "quite an infringement upon my contractual considerations with a consumer."
Flynn said it was his understanding that the state board wanted contractors to distribute a booklet, "Consumer's Guide to Selecting a Contractor," which included one section titled "Be Careful of Crooks" and another that discussed "Spotting Trouble Ahead." The latter was illustrated by a drawing of a contractor with a "Filing Chapter 7" sign in front of him.
"That sets a negative tone toward what otherwise should be a positive session that a reputable contractor has with a potential customer," said Flynn.
Whether it was a booklet or just an information sheet that was to be distributed, the new legislation prohibits it. The legislation also prohibits the state board from adding any further terms or conditions to a written contract that is included in the legislation.
The legislation that passed requires that contractors use legible written contracts that contain a general description of work;a fixed price or estimate of work; the amount and schedule of progress payments; a listing of specific materials requested; the amount of down payment; estimate of time and completion; and contractor's name, phone number and license number.
As of last Thursday, Gov. Douglas Wilder had not signed the bill to make it law. He has until March 25 to do this.
Earle Shumate, a partner in Building Specialists Inc. of Roanoke and a member of the state board, said he did not understand the home builders' objections to the board's contract or consumer information requirements.
He said it was his experience that the clearer the terms of a business transaction are up front, the greater the chance of success of that transaction.
"Change is just real hard," said Shumate.
A consumer-activist member of the state board for contractors said the board was just looking for ways to cut down on the number of complaints when it decided on the new regulations.
Helen Savage, one of the two public members of the board and a former officer of the Virginia Citizens Consumer Council, said the board gets so many complaints that don't fit into its jurisdiction that it thought requiring the distribution of the consumer information would make customers more aware of problems that can happen in a construction contract, and, in turn, cut down on the complaints the board had no way of resolving.
Consumers think a state license means a contractor is "competent" for instance, Savage said, "but the license doesn't do that . . . It just means that they passed a test."
Savage also said the issue of contractor complaints goes deeper than the recent disagreement; it goes to the need for the state to have more stringent requirements for contractors.
The state contractors transaction recovery fund, which is funded by contractors, paid out $617,000 in 1990 and so far in fiscal 1991, it has paid out $568,000. To be paid by the fund a customer must have an unsatisfied civic court judgement against a contractor for unsatisfactory work.
The State Board for Contractors' requirements that have gone into effect change the Class B registration of contractors to a full license program that will require each Class B contractor to fill out an application when his or her present registration comes up for renewal.
by CNB