Home Improvement Contracting – Things Have Changed

Louisiana State Senate Chamber
Louisiana State Senate Chamber (Photo credit: jimmywayne)

Often times, people ask why it is referred to as the “practice of law.” Quite simply, the answer is because the law is always changing. In May of this year, I wrote about potential changes that could impact the construction industry following the 2013 Session of the Louisiana Legislature. Suffice it to say, the legislature did not go out of its way to amaze the populace with any widespread change in any field (insert general cynicism here). In the past calendar year, though, it has done some things that are immediately relevant in the construction field. Importantly, with regards to home improvement contracting, things have changed.

Casting a Wider Net

Before a discussion on the changes to home improvement contracting, I would direct you to previously written articles on this blog home improvement contracting generally. In March 2012, Seth Smiley wrote a very succinct article, outlining the most important aspects of the home improvement contracting articles, found at Louisiana Revised Statutes 37:2175.1 – 2175.6. From this article, we see that one of the most important aspects of determining the applicability of the home improvement contracting provisions rests on the definition of home improvement contracting. Previously, La. R.S. 37:2175.1 stated:

[e]very agreement to perform home improvement contracting services, as defined by this Part, in an amount in excess of seventy five hundred dollars, but not in excess of seventy-five thousand dollarsshall be in writing…

Since then, things have changed. During the 2012 legislative session, the Governor signed Act 193, which expanded the range of home improvement contracting projects to include any project between one thousand five hundred dollars and seventy-five thousand dollars. This very tightly limited the amount of work a person could contract to do without needing to be registered as a home improvement contractor with the Louisiana State Licensing Board for Contractors (LSLBC). Compounded upon the price range limitation, is the incredibly broad definition of “home improvement contracting,” which according to La. R.S. 37:2150.1(7) means :

the reconstruction, alteration, renovation, repair, modernization, conversion, improvement, removal, or demolition, or the construction of an addition to any pre-existing owner occupied building which building is used or designed to be used as a residence of dwelling unit, or to structures which are adjacent to such residence or building.

Given the fact that the LSLBC is not one to define these terms with much specificity, it can be argued that almost any type of work or home repair you contracted to perform from August 2012 to the present time calls for a home improvement contractor certificate. If you do not already have one, now might be the time to consider speaking with an attorney or contacting the LSLBC.

Expanding the Exceptions

At the same time that the home improvement contracting statutes have been made more restrictive with regards to contracts to perform certain work, certain exceptions have recently been expanded upon to make it easier on the handy homeowner. As I discussed in my May article, Senate Bill 81 proposed to expand the rights of homeowners that wished to perform certain home improvement contracting services upon their own property. After some tweaking, this exception will not become the law, effective August 1, 2013, albeit in slightly different form. The idea of relaxing the requirements for homeowners prevailed, but in different language. The statute governing exceptions to the home improvement contracting part (La. R.S. 2175.5), will now read, in part:

A. The following persons are excepted from the provisions of this Part:

(2)(a) A homeowner who physically performs the home improvement work on his personal residence.

(b) An individual who physically performs home improvement work on other property owned by him when the home improvement work has a    value of less than seven thousand five hundred dollars.

Summary of Things Changed

Essentially, the following questions will need to be asked:

  • First, am I the person contracting to perform any of the type of work as defined by 37:2150.1(7)? If I am the person that will be performing that work, is the amount in writing and am I getting paid for it? If I am getting paid for it, is it more than $1,500 but less than $75,000? If it is, you need to be registered.
  • Second, am I the person that is performing the defined work? Is that work being performed on my person residence? If yes, I do not need to be registered. If not, is that work being performed on propert I own that is not my residence? If that is the case, is the work to be performed valued at more than $7,500? If it is, I need to be registered as a home improvement contractor.

Confusing? Hopefully not. As always, though, the safest thing to do is consult an attorney because, as practitioners of law, we necessarily need to keep ourselves, and our clients, updated in changes to the law. The above is a perfect illustration of that point.

 

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Louisiana State Licensing Board for Contractors (LSLBC)- Not To Be Taken Lightly

Senate Judiciary Committee Hearing
(Photo credit: Talk Radio News Service)

In recent weeks, I have seen a spike in the number of issues coming across my desk that directly involve the Louisiana State Licensing Board for Contractors (“LSLBC”). While every situation has its own idiosyncrasies, when you find yourself being called to appear before the LSLBC, chances are very good you have a licensing problem. Here at the Wolfe Law Group, we have posted about Louisiana licensing law numerous times and have counseled numerous clients regarding their particular license issue. However, we have not really gone beyond the procedural legalese and really explained why the LSLBC is not to be taken lightly.

What is the LSLBC?

For many contractors, the first experience they have with the LSLBC is when they receive a letter from the LSLBC notifying them of a hearing they must attend because they have been accused of violating one of the statutes under the LSLBC’s jurisdiction. I know, that statement is just full of things “legal.” However, it is essential to understanding what the LSLBC is and why it should be taken seriously.

The LSLBC is an arm of the state government. It is not a court. This explains why many people are a little surprised when they are called before the LSLBC for a “hearing.” Even though it is not a court, since it is an agency of the state, it has been granted all of the powers to regulate aspects of the construction industry in Louisiana. Most importantly, this includes the power to punish those who violate certain statutes, particularly with regard to licensing requirements. This was a point of concern for one client recently: if the LSLBC isn’t court, how can it have jurisdiction over my company and fine us? The simple answer: it has jurisdiction over your company because you did work in this state and this state says that it has jurisdiction over your company. It has been this way since 1956, when the legislature created the LSLBC as it exists today, along with all of the rules that the LSLBC is charged with enforcing. All of which can be found in Louisiana Revised Statute 37:2150 et seq.

Any person that performs construction work in the State of Louisiana is subject to these provisions, and any person or company that performs work in this state that is not licensed is subject to punishment. This is why it is so important for contractors (especially out-of-state contractors) to get licensed or certified before beginning work in Louisiana. If you do not, it is the LSLBC that will come calling.

Who is the LSLBC?

The ladies and gentlemen that make up the LSLBC generally have two things in common. First, they are appointed by the Governor to sit on the Board for terms up to six years. Second, they have experience working in the construction industry. These qualifications are important in understanding where the LSLBC is coming from when it exercises its agency powers. While ruminations regarding the appointed nature of a Board position are best reserved for other arenas of public discourse, it is incredibly important for contractors to understand that the LSLBC consists of people with actual construction experience. These are people that “know what you’re going through,” so to speak. They have an understanding of that difficult homeowner, or that fight to get paid. With the exception of two “at-large” positions, this experience is a requirement to sit on the LSLBC, which makes the system inherently more fair.

Of course, this is a difficult concept to explain to a person or business that is being accused, by the Board, of violating one of its rules. I would suggest, though, that it is better (and financially safer) to be governed by a group of colleagues from within your profession, as opposed to a group of people who are removed from, or unrelated to, the construction industry. The LSLBC will always be an institution that exists to safeguard the construction profession. While this will sometimes manifest itself in coming down hard on members of that profession, it will likely be a fair, educated, and even-handed determination. Regardless, though, while a good approach is to know who and what you are up against, a better approach is to avoid that confrontation.

I Have a Hearing – What Now?

Of course, the hope is that you will not be called before the LSLBC for any violation. Whether you are an in-state contractor or out-of-state contractor, hopefully you have already contacted an attorney to make sure your licenses and registrations are current, relevant and secured. If you haven’t – do so! This should avoid being called before the LSLBC for any licensing violation. Sometimes, though, it cannot be avoided (for example, when a homeowner files a complaint about workmanship). Regardless of the underlying complaint, should you find yourself holding that letter demanding your appearance, you should not hesitate in contacting an attorney. For one, the procedure during an LSLBC hearing is almost entirely different from what one would normally expects at a hearing.

You will be required to enter a “plea” before the proceedings begin (sounds like criminal court). You will be entitled to review the evidence compiled against you, but this review happens on the day you show up for the hearing. You might be questioned by an attorney for the Board, or be able to ask questions of the Board’s investigator. Sometimes you might be able to have a more informal discussion of your matter with the Board itself, or they might just see all the evidence and make a determination. Sometimes, you might not even need to show up if you  offer to settle the matter, in writing, beforehand. It is, however, almost a guarantee that you will be fined with at least the administrative fee of $500.00. To se a general outcome of 2012 cases, see here.

The moral of the story: agency hearings are a different kind of animal, which is more likely to throw people for a loop. Your best bet is to prepare yourself by preparing your best case. Even though the situation is more informal than a court proceeding, the question is the same: has there been a violation of some law. Who better to help navigate that course than a lawyer with experience in that field of law?

 

 

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