Reaction to Law Positive

Several months after an Arkansas law regarding home improvement licensing went into effect, the state’s top contracting administrator said he hasn’t encountered much pushback from those in the industry.

“Maybe they don’t call me, but I really never hear anything negative about it,” said Greg Crow, administrator for the Arkansas Contractors Licensing Board in Little Rock. “We’ve been to meetings around the state and what we’ve heard is, ‘What took you so long?’

“If anything, there’s a frustration that we aren’t doing enforcement this year.”

In the spring of 2011, Arkansas’ 88th General Assembly passed legislation requiring a person or business doing work at a residence to be licensed by the ACLB before doing any home improvement work costing more than $2,000.

Rep. Bruce Cozart, R-Hot Springs, sponsored the law, Act 1208. It was touted as a bill to protect consumers and crack down on anyone with a hammer and a truck posing as a home-improvement contractor, frequently drawn to areas affected by weather damage.

The hope is the extra oversight will help weed out the unqualified and habitually unscrupulous.

“Not to say there aren’t fly-by-nighters who are local and are good,” Crow said. “But there’s a whole group of people who follow storms and that’s their goal, to go where the chaos is, where people are desperate, and take advantage of people left and right.”

The act is an amendment to the state’s Residential Licensing Act, Crow said, which previously only required certification for homebuilders.

And without regulation, Crow said, contractors aren’t afraid of anything in an area of the industry that’s becoming big business. As homeowners seek to increase value to their property, the number of remodeling bid requests has risen 61 percent this year in the U.S., according to the National Association of the Remodeling Industry.

Following a “grandfathering” period through the end of 2011, in which no written test was required to obtain a license, Act 1208 went into effect Jan. 1, with a $50 fee for a new application and a $25 annual renewal fee.

There are those who disagree with the new law, feeling simply that any regulation is expensive and unnecessary. Cozart, who owns a residential construction company, said he thinks there will be an effort to repeal or rewrite the law in the 2013 legislative session.

“One [lawmaker] said the law might put his brother-in-law out of business,” Cozart said. “If getting a license is going to put your brother-in-law out of business, you ain’t got much of a business.”

As of Aug. 23, Crow said the ACLB had issued 7,229 home improvement “limited” licenses and 1,211 “unlimited” licenses, “to everyone from a remodeler down to a painter, drywall guy, whatever, and everything in between.”

A limited license is required for remodeling jobs less than $20,000. Unlimited pertains to everything above that.

Penalties for performing work without a license can be as much as $400 per day, but enforcement has so far been essentially nonexistent.

Instead, the strategy this year is education. Crow said public service announcements via print and video, and working with various homeowners associations throughout the state, are primary ways the ACLB is hammering home new information to contractors and consumers.

“Any way that we can think of,” he said. “If a consumer knows about us and makes a complaint on a home improvement contractor, we can now deal with those issues. And we’re starting to see some of those percolate up to the top at this point.”

A statistic put forth by the Better Business Bureau claims that for every complaint received regarding home improvement fraud, there are 20 never reported.

Crow said his office has received about 50 formal consumer complaints this year regarding shoddy repair work. The majority of them have been resolved, he said, mostly with contractors who are licensed and on file with the ACLB.

“We try to get the contractor to go back and fix the problem; that’s the best thing for the homeowner,” Crow said.

There have been “two or three” consumer complaints tied to unlicensed contractors that have not been resolved, Crow said.

Those complaints are up for a hearing before the board in September. In the past, a consumer likely would have had no recourse.

Without resolution, since the contractors are unlicensed, they face a fine anywhere from $100 to $400 per day until the work is corrected.

“It depends on the situation,” Crow said. “If they’re ripping off grandma and taking her money, they very well could get the [maximum penalty].”

The money generated because of the new licensing requirements goes to the ACLB. Crow speculated the money will probably be used to hire additional personnel. The board currently has six field investigators who are charged more with consumer education than spot-checking for licenses on a random basis. The time and manpower for that task is lacking who are, but that will probably change in the future, Crow said.

“If we are [eventually] going to enforce this, we will need some additional investigators,” he said.