February 2, 2004
Code red | Advocates for licensing Maine's builders say something must be done immediately. So why can't the Legislature agree what that should be?
By Rebecca Zicarelli
Carl Chretian, a general contractor from Saco, wants to see his industry regulated. "It would help clean out some of the people who are not up to speed in what they're doing or don't care about what they're doing," he says. "It would get them out of business."
Chretian's an active member of the Homebuilders and Remodelers Association of Maine, and he's been helping the association lobby the Maine Legislature to adopt a bill, LD 1551, called the "Maine Home Contractor Licensing Act," which would require homebuilders and remodelers to be licensed. "In the past year I've worked for two or three customers redoing work that was previously [done by other contractors]," Chretian says. "It's not worth their time to hire a lawyer or go to small claims court." Beyond court or paying twice for the same work, Chretian says the only other option for consumers is to file a complaint with the Attorney General's office, which only takes on the most egregious offenders.
According to Rep. Scott Cowger (D-Halowell), the sponsor of LD 1551, the lack of regulation in the homebuilding industry is a perennial problem in Maine. "I have a huge folder of legislative history on this," Cowger says. "Some sort of bill has gone before the Legislature every year for more than 20 years. They usually fall apart over issues of a building code being mandated on municipalities." Yet like dandelions in the yard, some sort of bill sprouts each legislative session because consumers continue to be besieged by shoddy building practices and poor business methods.
Cowger says the bill, held over from last year by the Business, Research and Economic Development Committee because of an interest in licensing homebuilders, is different from previous attempts at regulation. "The stakeholders who've worked on this have done some unique stuff ˆ we have some hope of success for the first time in 20 years," he says. Over the summer, stakeholders from the homebuilding industry, the insurance industry, code enforcement officers, representatives from the Attorney General's office and the Maine Municipal Association met more then 20 times. They formed two groups, one studying building codes, the other working on contractor licensing. Ultimately, they unanimously supported LD 1551 when it was taken up by the committee in mid-January.
And they were all stunned when the committee voted "ought not to pass" on Jan. 20, by a vote of 10-3. "We were very disappointed by the committee vote," says Sandi Mathieu, executive director of the Homebuilders and Remodelers Association of Maine. "I think that we had a bill that was good for builders, good for consumers. The stakeholders did a great job."
Dave Pierson, an attorney for Hark Andrucki Attorneys in Lewiston, represents the homebuilders association on this bill and says that "stakeholder groups put a lot of time, money and effort into crafting a bill that was good for consumers. The licensing and regulation would raise the standards of the industry without hampering it. And it seems to have died an untimely death."
But Chuck Dow, director of communications and legislative affairs in the Attorney General's office and one of the forces behind LD 1551, isn't ready to read the bill its last rights. "To paraphrase Mark Twain, reports of this bill's death are greatly exaggerated," he says, pointing out that the bill will still go to the floor of the House and then Senate sometime this month, where there is interest in it from both sides of the aisle.
Linking licenses to a code
While it's relatively easy to understand the size of Maine's homebuilding industry, it's not so easy to determine the scope and cost of shoddy building. A recent cost-benefit analysis of LD 1551 commissioned by the Attorney General's office found that approximately 12,000 businesses, engaged in 80,000 construction/repair/renovation projects worth nearly $790 million annually, would likely fall under the regulations proposed in the bill. The study found that the only systematic source of information on the topic of shoddy work was a survey conducted by the Maine State Housing Authority of users of its FixMe home improvement program, which found that respondents rated approximately 3% of home improvement activity as "unsatisfactory." Applying these results to the state as a whole suggests that shoddy work costs Mainers about $24 million a year.
But Chretian's estimate of lousy work is much higher; he says nearly 20% of the work he sees is substandard, with 5% of it done by the bad apples who just don't care and the other 15% done by builders who don't have enough training. LD 1551 would address those problems by licensing contractors the way electricians are already regulated. All work must be done to the standards of a code, and a licensing board ascertains that each licensed electrician has the skills required to do the job. The board also hears consumer complaints and dispenses remedies ranging from ordering redress to license suspension if an electrician fails to meet licensing standards.
If LD 1551 is adopted, it would create a new state agency, the Maine Home Contractor Licensing Board, that would be part of the Bureau of Licensing. The board's first task would be to establish its rules and guidelines, and to adopt a statewide code, called the Maine Model Building Code, based on the International Building Code. Until the variations of the IBC code that would pertain to Maine are worked out, the IBC would function as the state's code. "A statewide code is needed because of the inconsistencies builders find across the state," Chretian says. "I have 10 code books."
The draft of the bill presented last year required three inspections for a home building project as an enforcement mechanism. The cost-benefit analysis estimates the cost of the new board and a staff of inspectors would have been more than $12 million, a prohibitive amount considering the state's budget shortfalls. During the summer, stakeholders developed another cost-effective enforcement method: The bill in front of the Legislature this session doesn't require any inspections. Instead, an inspection is done if and when a consumer files a complaint. If the inspection finds the work does not meet the requirements of the code, the board would take disciplinary action against the builder.
But Jeff Austin, legislative advocate for the Maine Municipal Association, says the MMA's Legislative and Policy committee expressed concern that, other than licensing and complaints, the bill lacked enforcement teeth. "While the [MMA] did see that as a shortcoming, they were supportive of licensing and promoting more uniformity in codes," Austin adds.
Dow says that his office believes the program would be completely self-funding, paid for by fees from the state's estimated 12,000 builders and remodelers. Licenses would cost $350 per year for general contractors, $150 per year for specialty contractors such as roofers or replacement-window specialists.
To get a license, a contractor would have to provide the board with any criminal history and be familiar with the Home Construction Contracts Act. General contractors would need a minimum of three years experience or would need two years of relevant experience and education and would need to pass a proficiency test; specialty contractors would need two years of experience or a single year of experience/education and need to pass a proficiency test. To renew a license, contractors would have to continue their education each year. Contractors who don't receive more than $3,000 from any single homeowner or who only subcontract their services to other licensed contractors rather than directly to homeowners would not need a license.
Chretian estimates that the cost of his license and continuing education will be about $1,350 a year and that it won't have a big impact on the prices he charges customers. "Over 250 work days a year, that's about $5 a day," he says. "I can write it off as education and professional expenses, take it right off the top of my taxes. If I throw it into overhead for a job, it will add between $25 and $50."
Cowger says the licensing bill may be back in front of the Business, Research and Economic Development Committee this session; Rep. Nancy Sullivan (D-Biddeford) is interested in presenting an amended version of the bill that increases the threshold for home improvement costs before a contractor is required to have a license to do the work. "It's my hope that the committee may reconsider," Sullivan says. "I'd be hopeful that we'd have close to a majority go along with the amended version of the bill."
Crafting legislation is nothing if not a slippery process, however. Unhappy homeowners who've experienced crooked or inept builders may want satisfaction immediately in the form of a new law, but in the halls of the State House anything can happen. As they've been forced to do for so many years now, they'll have to again play the game of wait and see.
Chretian's an active member of the Homebuilders and Remodelers Association of Maine, and he's been helping the association lobby the Maine Legislature to adopt a bill, LD 1551, called the "Maine Home Contractor Licensing Act," which would require homebuilders and remodelers to be licensed. "In the past year I've worked for two or three customers redoing work that was previously [done by other contractors]," Chretian says. "It's not worth their time to hire a lawyer or go to small claims court." Beyond court or paying twice for the same work, Chretian says the only other option for consumers is to file a complaint with the Attorney General's office, which only takes on the most egregious offenders.
According to Rep. Scott Cowger (D-Halowell), the sponsor of LD 1551, the lack of regulation in the homebuilding industry is a perennial problem in Maine. "I have a huge folder of legislative history on this," Cowger says. "Some sort of bill has gone before the Legislature every year for more than 20 years. They usually fall apart over issues of a building code being mandated on municipalities." Yet like dandelions in the yard, some sort of bill sprouts each legislative session because consumers continue to be besieged by shoddy building practices and poor business methods.
Cowger says the bill, held over from last year by the Business, Research and Economic Development Committee because of an interest in licensing homebuilders, is different from previous attempts at regulation. "The stakeholders who've worked on this have done some unique stuff ˆ we have some hope of success for the first time in 20 years," he says. Over the summer, stakeholders from the homebuilding industry, the insurance industry, code enforcement officers, representatives from the Attorney General's office and the Maine Municipal Association met more then 20 times. They formed two groups, one studying building codes, the other working on contractor licensing. Ultimately, they unanimously supported LD 1551 when it was taken up by the committee in mid-January.
And they were all stunned when the committee voted "ought not to pass" on Jan. 20, by a vote of 10-3. "We were very disappointed by the committee vote," says Sandi Mathieu, executive director of the Homebuilders and Remodelers Association of Maine. "I think that we had a bill that was good for builders, good for consumers. The stakeholders did a great job."
Dave Pierson, an attorney for Hark Andrucki Attorneys in Lewiston, represents the homebuilders association on this bill and says that "stakeholder groups put a lot of time, money and effort into crafting a bill that was good for consumers. The licensing and regulation would raise the standards of the industry without hampering it. And it seems to have died an untimely death."
But Chuck Dow, director of communications and legislative affairs in the Attorney General's office and one of the forces behind LD 1551, isn't ready to read the bill its last rights. "To paraphrase Mark Twain, reports of this bill's death are greatly exaggerated," he says, pointing out that the bill will still go to the floor of the House and then Senate sometime this month, where there is interest in it from both sides of the aisle.
Linking licenses to a code
While it's relatively easy to understand the size of Maine's homebuilding industry, it's not so easy to determine the scope and cost of shoddy building. A recent cost-benefit analysis of LD 1551 commissioned by the Attorney General's office found that approximately 12,000 businesses, engaged in 80,000 construction/repair/renovation projects worth nearly $790 million annually, would likely fall under the regulations proposed in the bill. The study found that the only systematic source of information on the topic of shoddy work was a survey conducted by the Maine State Housing Authority of users of its FixMe home improvement program, which found that respondents rated approximately 3% of home improvement activity as "unsatisfactory." Applying these results to the state as a whole suggests that shoddy work costs Mainers about $24 million a year.
But Chretian's estimate of lousy work is much higher; he says nearly 20% of the work he sees is substandard, with 5% of it done by the bad apples who just don't care and the other 15% done by builders who don't have enough training. LD 1551 would address those problems by licensing contractors the way electricians are already regulated. All work must be done to the standards of a code, and a licensing board ascertains that each licensed electrician has the skills required to do the job. The board also hears consumer complaints and dispenses remedies ranging from ordering redress to license suspension if an electrician fails to meet licensing standards.
If LD 1551 is adopted, it would create a new state agency, the Maine Home Contractor Licensing Board, that would be part of the Bureau of Licensing. The board's first task would be to establish its rules and guidelines, and to adopt a statewide code, called the Maine Model Building Code, based on the International Building Code. Until the variations of the IBC code that would pertain to Maine are worked out, the IBC would function as the state's code. "A statewide code is needed because of the inconsistencies builders find across the state," Chretian says. "I have 10 code books."
The draft of the bill presented last year required three inspections for a home building project as an enforcement mechanism. The cost-benefit analysis estimates the cost of the new board and a staff of inspectors would have been more than $12 million, a prohibitive amount considering the state's budget shortfalls. During the summer, stakeholders developed another cost-effective enforcement method: The bill in front of the Legislature this session doesn't require any inspections. Instead, an inspection is done if and when a consumer files a complaint. If the inspection finds the work does not meet the requirements of the code, the board would take disciplinary action against the builder.
But Jeff Austin, legislative advocate for the Maine Municipal Association, says the MMA's Legislative and Policy committee expressed concern that, other than licensing and complaints, the bill lacked enforcement teeth. "While the [MMA] did see that as a shortcoming, they were supportive of licensing and promoting more uniformity in codes," Austin adds.
Dow says that his office believes the program would be completely self-funding, paid for by fees from the state's estimated 12,000 builders and remodelers. Licenses would cost $350 per year for general contractors, $150 per year for specialty contractors such as roofers or replacement-window specialists.
To get a license, a contractor would have to provide the board with any criminal history and be familiar with the Home Construction Contracts Act. General contractors would need a minimum of three years experience or would need two years of relevant experience and education and would need to pass a proficiency test; specialty contractors would need two years of experience or a single year of experience/education and need to pass a proficiency test. To renew a license, contractors would have to continue their education each year. Contractors who don't receive more than $3,000 from any single homeowner or who only subcontract their services to other licensed contractors rather than directly to homeowners would not need a license.
Chretian estimates that the cost of his license and continuing education will be about $1,350 a year and that it won't have a big impact on the prices he charges customers. "Over 250 work days a year, that's about $5 a day," he says. "I can write it off as education and professional expenses, take it right off the top of my taxes. If I throw it into overhead for a job, it will add between $25 and $50."
Cowger says the licensing bill may be back in front of the Business, Research and Economic Development Committee this session; Rep. Nancy Sullivan (D-Biddeford) is interested in presenting an amended version of the bill that increases the threshold for home improvement costs before a contractor is required to have a license to do the work. "It's my hope that the committee may reconsider," Sullivan says. "I'd be hopeful that we'd have close to a majority go along with the amended version of the bill."
Crafting legislation is nothing if not a slippery process, however. Unhappy homeowners who've experienced crooked or inept builders may want satisfaction immediately in the form of a new law, but in the halls of the State House anything can happen. As they've been forced to do for so many years now, they'll have to again play the game of wait and see.
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