The Construction Contract Review

Absolutely Free Home Remodeling – A Tough Way to Make a Living

Offering absolutely free home remodeling to consumers is a tough way to make a living.  But many home remodeling contractors are often at risk for doing expensive home repairs and remodeling without getting paid a dime – legally.

 

Numerous states have strict statutes that, in the name of consumer protection,

offer draconian remedies against what legislatures perceive to be unscrupulous contractors.  Honest, good-faith contractors, however, can get caught in some of these legislative traps if they are not diligent in their paperwork. 

 

The Illinois Home Repair and Remodeling Act (HRRA) is a good example of requirements for consumer contracts. For any home repair or remodeling contract over $1,000, a person engaging in the business of home repair and remodeling is required in Illinois to provide the consumer with a copy of the "Home Repair: Know Your Consumer Rights" pamphlet.  A clear, concise, and complete written contract that spells out the who, what, where, when, and total cost of the project is required.  In addition, the contract is required to give the name and address of the person engaged in the business of home repair or remodeling. If the contractor uses a post office box, mail service, or agent to receive business correspondence, the contract must state the contractor's home address. 

 

 

Related enforcement statutes and court cases interpreting these statutes have had some painful outcomes for contractors.  Failure to abide by the HRRA may preclude a contractor from recovering unpaid contract balances or extra work, force a return of any money received, open up a contractor to further damages, attorney fees or possible sanctions from the Attorney General.  Homeowners in Illinois have received FREE home additions from contractors who failed to follow some of these statutes. 

The attorneys at Mayfield | Broderick can help contractors develop consumer contracts and practical checklists for dealing with residential homeowners.  It would be a lot cheaper to pay us a small flat fee for this preventative consultation than to perform free work for a consumer – can’t make that up in volume.

Photo Credit: http://www.flickr.com/photos/nickdawson/522097877/

Protect Your Green by Protecting the Green

Two stories hit my desk on the same day that I found interesting for construction companies.  First, California adopted stricter pollution discharge rules that will require more aggressive monitoring of construction projects.  The California State Water Resources Control Board’s new General Permit for Storm Water Discharges from Construction imposes a significantly different permitting framework from the Current General Permit that has been in place for the last 10 years.  As reported by Morrison Foerster back in May, when still in draft form, the “new framework includes mandatory BMPs, two forms of numeric discharge limitations, and onerous monitoring requirements that could be costly for developers in California and raise a significantly higher risk of encountering enforcement actions and citizens’ lawsuits in the future.”

 

Highlighting the risk of enforcement actions is the second story I encountered.  The Florida Department of Environmental Protection fined a construction contractor $1,700,000 for alleged violations of its Stormwater Pollution Prevention Plan.  During construction of the Panama City-Bay County International Airport in Florida, there were heavy rains this spring.  Temporary soil stabilization methods (covering the soil with a synthetic covering or hydroseeding, in this case) should have been employed per the SWPPP, but were not, according to DEP and reported by The News Herald.  The DEP estimated that the contractor saved about $950,000 by not installing the erosion matting – the contractor is disputing the violations.  The contractor claims that drainage problems elsewhere on the site are contributing to the failure of the designed runoff prevention system. 

 

If you are trying to run a sustainable or green construction business, you probably already know that nonpoint source pollution is one of the leading causes of water quality problems and that these pollutants can have harmful effects on drinking water supplies, recreation, fisheries, and wildlife.  It is a good thing to protect the green around our jobsites but also rewarding to protect the green in your wallet by following your stormwater pollution prevention plans.

Chicago Contractor’s License: An Olympic Challenge

Congratulations to the City of Chicago on being awarded the 2016 Summer Olympics.  Let the building begin!!

 

Chicago is planning fewer permanent facilities than previous games, but still has a venue-construction budget around $1 billion and another $1 billion on the Olympic Village.  According to Crain’s Chicago Business, Athens was three times over budget; London is four times over budget; Vancouver has needed a government cash infusion of $110 million and has almost drained a $100-million contingency fund, which is bigger than Chicago's $82-million reserve.  “Millennium” Park, intended to celebrate the new millennium in 2000, wasn’t completed until 2004 and was four times over budget.  Good trends if you are a contractor. 

 

WHAT THE????  NO OLYMPICS IN CHICAGO?!?!  Oh well, you still need a contractor’s license to be a general contractor in the city:

 

If you are interested in getting in on some of the contracting action, you need to know that there is a general contractor’s license requirement to build within the city limits.  The local state’s attorney is cracking down on unlicensed contractors and no one expects that trend to stop prior to the Olympics.  While the penalties for unlicensed contractors in Chicago are not as harsh as in California, for example, you can guarantee that local contractors will be using this licensing mechanism to protect their turf. 

 

 Chicago for years did not have a licensing regime.  But after a few high profile construction incidents, it now requires general contractors to be registered annually.  Despite the fanfare of its introduction, the licensing process appears to me more like a revenue enhancer for the city as opposed to public protection: there are no experience or testing requirements.  But do you really care why the city has a licensing requirement?  I’ll leave that to the politicians. 

Contact me if you need assistance getting a Chicago general contractors license.  If you want to join in the Olympic BORING OLD REGULAR buildfest, start getting yours now.