Question: I am told that over one-third of all the complaints against contractors to the state Contractors License Board are against home improvement contractors. Don't you feel that there should be more consumer protection if this is the case?
Answer: Indeed I do. More consumer protection is needed to protect the average homeowner/consumer because these are usually the least sophisticated buyers in the home improvement market, enabling unethical contractors to take advantage of them.
There are ample laws for homeowners entering into a home-improvement contract. First, it is illegal for a contractor to collect more than $1,000, or 10% of the home-improvement contract price, in advance. Secondly, the home owner has a period of three working days (excluding Saturday and Sunday), in which to cancel the contract without penalties. There are also adequate laws in regard to bait-and-switch advertising and other promotions that may confuse or put pressure on the potential buyer.
Unfortunately, the policing by the state Contractors Board is very difficult because of its small staff. There are more than 160,000 licensed contractors in California, but there are also numerous unlicensed individuals who operate as contractors.
I recently completed a study of a bonding company that issues license bonds to contractors. I found that over a two-year period, based on approximately 25,000 bonds, complaints against swimming-pool contractors was extremely high (in excess of 10%). The license bond for swimming-pool contractors is $10,000 and it is therefore much more appealing for an attorney to pursue than the normal $5,000 bond for all other types of contractors.
In addition, swimming-pool contractors may cause damage to the existing structures, including the yard, pipes and electrical conduits.
The second highest frequency of claims involved roofing contractors. The homeowner usually does not become dissatisfied until the first rain, and the roofing contractor cannot repair the leak until after the roof dries, which could take a considerable period of time. Moreover, leaks could cause plaster problems and/or furniture damage.
Tile contractors also have a great frequency of claims because the work being done is readily visible if it is unsatisfactory.
Contractors who usually do work with general contractors seem to receive fewer claims. General building contractors have about an average complaint factor compared with the entire industry. I am certain, however, that in home improvements, there is a higher frequency of claims because the contractor is working directly with the consumer.
A contractor who is doing commercial work is usually employed by a more sophisticated buyer who will usually run a financial and experience check on the general contractor.
Fontaine is president of the Western Regional Master Builders Assn. and a director of the American Building Contractors Assn. He will answer questions concerning home improvements. Phone 213/653-4084 or write him at 6404 Wilshire Blvd., Suite 850, Los Angeles 90048-5510.