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Pennsylvania Passes Law Imposing Strict Requirements on Home Improvement Contractors

Home Improvement Regulation: In an effort to strengthen the protections afforded consumers against wrongful acts by home improvement contractors, the Pennsylvania legislature recently enacted the Home Improvement Consumer Protection Act.

The Act, which will become effective as of July 1, 2009, imposes stringent requirements on individuals or entities engaging in any form of home improvement. They are similar to those implemented in other states. Under the Act, “home improvement” is broadly defined and includes any repair, replacement, remodeling, demolition, removal, renovation, installation, alteration, construction or other improvement for which the total contract price exceeds $500. However, the Act does not apply to the construction of a new home or to the sale of goods or materials, where the seller does not perform actual work on the home.

The new law requires that all Pennsylvania home improvement contractors register with its Bureau of Consumer Protection in the Office of the Attorney General. The contractor’s registration number then must be included in every advertisement, estimate, proposal or contract for home improvement. Contractors must also maintain liability insurance in the minimum amount of $50,000. In addition, they must disclose in the registration application if they have ever been convicted of a criminal offense, fraud or theft related to a home improvement transaction crime. Contractors are also required to disclose if they have ever filed for bankruptcy or if they have had a judgment entered against them in connection with a home improvement transaction within the previous 10 years.

In addition, the Act contains strict requirements regarding the form and content of home improvement contracts. Under the Act, all home improvement contracts must be in writing, and also as mentioned above, must contain the contractor’s registration number. The Act mandates certain items be included in the agreement. For instance, though without limitation, the agreement needs to be signed by both the contractor and the customer; it needs to include required statutory notices; the contract must provide a mailing address for the contractor (this cannot be a PO Box); and provide an outline of information relating to any subcontractor that will be used on the project. Moreover, the contract must also include a description of the work to be performed, the materials to be used and a set of specifications that cannot be changed without a written change order signed by the consumer. It must also specify the approximate start and completion dates for the work and the total sales price due under the contract. Moreover, the contract must contain the toll-free number of the Pennsylvania Bureau of Consumer Protection, as well as a provision allowing the consumer to rescind the contract within 3 business days. Moreover, where the contract price exceeds $1000, the contract must not provide for any deposits in excess of 1/3 of the total contract price. Finally, the Act specifies other language that cannot be included in the agreement. If these provisions are nevertheless included in the agreement, it could void it entirely, and prevent a contractor for being able to enforce it (i.e., collect money owed to the contractor for work performed).

Any violation of the Act by a home improvement contractor will also constitute a violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law. As a result, consumers have the potential to recover treble damages (or three times the amount of the consumer’s actual damages) and attorneys’ fees from a contractor found to be in violation of the Act. This means that regardless of the quality of work performed, a contractor could find himself liable for a violation of the Act for failing to have a compliant agreement. Even a technical violation would suffice to make a contractor liable under the Act. For example, an argument could be made that if the contractor’s customer agreement did not include each and every one of the required elements, or did not include verbatim the statutory language set forth for the required notices, the contractor would be liable for violating the Act, even if unintentionally. It could be responsible for treble (triple) damages as a result.

In light of the potential for huge recoveries against them, contractors should be extremely careful in drafting their home improvement contracts. Any individual or entity engaging in any form of home repair or improvement should consult an attorney in order to ensure that they are in compliance with the Act’s detailed requirements.

Comments/Questions: ljm@gdnlaw.com
© 2008 Nissenbaum Law Group, LLC

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New Jersey Municipal Mechanics’ Lien Law

It is well established that a subcontractor may recover against a public agency even though there is no direct contractual relationship between the parties. Accordingly where either a contractor or a subcontractor performs work with respect to public improvements and is due and owing money for supplies and services furnished, it is entitled to file a lien against the public agency or municipality to recover the amount owed. However, in order to do so, the contractor or subcontractor must first comply with certain procedures.

Specifically, under the New Jersey Municipal Mechanics’ Lien Law, in order to perfect a lien, a contractor or subcontractor must file written notice that it performed work or delivered materials to a subcontractor within 20 days of first performing such work or delivering such materials. This notice must be filed with the appropriate designated official for the public agency. Where a notice of delivery is not filed, the courts will not recognize a valid lien.

In addition, the New Jersey Municipal Mechanics’ Lien Law requires that a contractor or subcontractor file a notice of lien with a designated individual of the public agency either prior to the work to being “completed or accepted by resolution of the public agency” or within sixty (60) days thereafter. The notice of lien must contain certain designated items in order to be valid.

Moreover, an action to enforce a lien must be brought within 60 days from the date on which the work to be performed by the contractor is “completed or accepted by resolution of the pubic agency.” Otherwise, the lien will not be considered binding on the municipality or public agency.

Comments/Questions: ljm@gdnlaw.com

© 2008 Nissenbaum Law Group, LLC

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New York City’s Regulations Governing Home Improvement Contractors

New York City has promulgated regulations relating to home improvement contractors, the purpose of which are presumably to protect consumers against contractors’ deceptive and fraudulent practices. However, the requirements go beyond such a prohibition and impose a number of precise requirements with which all home improvement contractors must comply. Home improvement is broadly defined under the law as “the construction, repair, replacement, remodeling, alteration, conversion, rehabilitation, renovation, modernization, improvement, or addition to any land or building, or that portion thereof which is used or designed to be used as a residence or dwelling place and shall include but not be limited to the construction, erection, replacement, or improvement of driveways, swimming pools, terraces, patios, landscaping, fences, porches, garages, fallout shelters, basements, and other improvements to structures or upon land which is adjacent to a dwelling house.” Home improvement does include the construction performed with respect to a new home or building.

One such requirement is that all contractors need to be licensed in order to solicit, sell or perform home improvement services. Where a contractor performs home improvement services without a proper license, he may be deemed guilty of a misdemeanor and subject to imprisonment of not more than one year and/or a penalty not to exceed $1,000.00. Furthermore, a contractor who is not licensed to engage in home improvement services may also be precluded from recovering monies due and owing by a homeowner under a contract. In other words, if a homeowner does not pay, you can’t sue for unpaid monies. In New York City, the public policy underlying the license requirement is so strong that some courts have even precluded an unlicensed contractor from recovering under quasi-contract theories such as quantum meruit. In other words, contractors may as demonstrated in Nemard Construction Corp. v. Deafeamkpor not even be able to recover the reasonable value of the services they provided if they fail to comply with the licensing requirement.

In addition, where a violation of the New York City’s administrative regulations is found, the Commissioner of the Division of Consumer affairs may order the contractor to pay the owner treble damages.

Aside from the requirements that all contractors be licensed, the regulations also prohibit home improvement contractors from engaging in certain acts, including without limitation (a) deviating from the plans or specifications or terms of the contract without the written consent of the homeowner; (b) making a substantial misrepresentation or false promise to induce a homeowner to enter into the contract; or (c) making false statements in connection with advertising their services. Moreover, the regulations further require that a contractor provide written notice to the homeowner that he may cancel the contract at any time prior to midnight of the third night after either the contract was executed or such notice was provided, whichever is later. Again, where a contractor engages in any such prohibited acts, he may be deemed guilty of a misdemeanor and subject to imprisonment of not more than one year or a penalty not to exceed $1,000.00.

In addition to the New York City administrative regulations governing home improvement contractors, there are statutes in New York that also govern home improvement contractors. Specifically, the home improvement contractor must be registered in the municipality where the work is performed. As demonstrated in Price v. Close, a contractor is precluded from recovering unpaid monies from an owner because he is unlicensed. The definition of a home improvement is identical to the definition set forth in the New York City regulations.

Furthermore, New York also requires contracts that exceed the cost of $500.00 to be in writing and signed by both parties. In addition, the contract must be legible and in plain language and clearly describe the other documents that are to be incorporated into the contract. The contractor must provide the owner with a copy of the written contract before any of the work is performed. New York also requires that the contract contain certain information including (i) the name, address, telephone number and license number of the contractor; (ii) the estimated dates when the work will begin and be substantially completed; (iii) the contingencies that would materially change the approximate completion date; (iv) a description of the work to be done, the materials to be provided to the owner and the agreed upon consideration for the work and materials.

In addition, the New York statute governing home improvement contracts also requires that certain notices be provided in clear conspicuous bold face type notifying the owner, among other things, that he has three business days to cancel the contract. The statute sets out the specific language of these notices.

Comments/Questions: ljm@gdnlaw.com

© 2008 Nissenbaum Law Group, LLC

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New York Passes Net Energy Metering Law

Construction Law: New York Legislation: Renewable Energy: The governor of New York recently signed into law a bill that will allow businesses to earn credit for electricity they generate utilizing renewable resources. Under the “New York Net Energy Metering Law,” businesses that generate power from wind, solar and farm waste will be able to sell the power that they do not use back to their electric companies. Prior to the passage of this law, such a right was limited to residential property owners.

In addition to providing an energy credit for businesses that utilize renewable energy sources, the law also requires that electric companies “develop a model contract and file a schedule that establishes consistent and reasonable rates, terms and conditions for net energy metering to non-residential customers.” Electric companies are also required to establish standards that are necessary to conduct net energy metering and that will allow for the interconnection of the company’s system to a business’s solar electric generating equipment.

The law was one of a series of Bills seeking to encourage residents and businesses to invest in green energy installation and to take steps to improve efficiency. According to Governor Paterson, “these bills will help improve New York’s air quality, curb our dependency on fossil-fuel based energy sources, and create 'green' jobs while simultaneously leading to greater investment by homeowners, farms and businesses in facilities that will generate renewable energy power and allow them to sell their excess power back to the grid.” The State’s goal is to generate 25% of its electricity from renewable sources by 2015.

Allowing businesses to earn credit for unused energy produced by solar, wind and other renewable sources could result in substantial savings on energy costs for those businesses. For example, if a business generates solar power and only uses 25% of the solar power that it generates, that business can “sell” the extra 75% of unused solar power back to the electric company as a credit against its regular utility bill. By providing businesses with this ability to save on energy costs by generating renewable energy, the new law has the potential to open up the marketplace for renewable energy installations.
The new law is effective as of August 5, 2008.

Comments/Questions: ljm@gdnlaw.com
© 2008 Nissenbaum Law Group, LLC

Please visit our website at www.gdnlaw.com and our other blogs at www.nissenbaumlawblog.com; www.foreclosuredefenselawblog.com; www.saleofbusinesslawblog.com; www.internetdefamationlawblog.com; www.constructionlawinfoblog.com; www.filmproductionlawblog.com; www.internetlawinfoblog.com; and www.njbusinesslawblog.com

Master Electrician Licensing Regulations

Construction Law: New York Legislation: Licensing Requirements: New York legislators recently amended the County Law governing master electrician licensing in order to provide Dutchess County with the authority to establish a board of examiners for master electricians. Pursuant to this law, the board has the authority to promulgate regulations governing the licensing of master electricians. The County Master Electrician Licensing Law previously only provided this authority to Westchester County.

It is important to keep in mind that New York City already has administrative regulations in place that govern the licensing of master electricians and the performance of electrical work for buildings located in New York City. Specifically, the New York City Electric Code provides that any entity or sole proprietorship who engages in the business of providing electrical work should have at least one licensed master electrician affiliated with the business. Without limitation, to obtain a master electrician licensing, the regulations mandate that the individual pass certain examinations. In addition, the master electrician must be of a certain age and have certain years and/or hours of past experience in performing certain electrical work.

Comments/Questions: ljm@gdnlaw.com

© 2008 Nissenbaum Law Group, LLC

Please visit our website at www.gdnlaw.com and our other blogs at www.nissenbaumlawblog.com; www.foreclosuredefenselawblog.com; www.saleofbusinesslawblog.com; www.internetdefamationlawblog.com; www.constructionlawinfoblog.com; www.filmproductionlawblog.com; www.internetlawinfoblog.com; and www.njbusinesslawblog.com

New Law for New York Crane Inspections

New York Legislation: Crane Inspections: In light of a number of recent crane accidents in New York, the State legislature has enacted a new law aimed at ensuring integrity in crane inspections. The law, which becomes effective November 1, 2008, has two different prongs: one aimed at someone impairing the inspection licensing process; and the other applicable to the licensed crane inspector himself.

The new law makes it a crime to impair “the integrity of a government licensing examination, when with the intent to obtain a benefit for himself, . . .” he engages in certain acts. These include the alteration of the applicant’s grade on the licensing exam; causing a false grade to be entered in the government registry; providing “answers, with an intent to wrongfully benefit another, to current questions on a pending government licensing examination”; or providing an applicant with a copy of the current test. In other words, the law has made it a felony to assist in cheating in the inspection licensing process.

The other new provision of the law is aimed at those who have already been licensed. That section provides for a civil penalty and revocation of a license for an inspector who willfully: fails to inspect a crane for which he submitted a report; falsifies an inspection report; makes material misstatements or omission on a report; or accepts a bribe. However, before the penalties can be assessed the inspector has the right to a “hearing on the merits” with regard to these allegations. The law specifically states that the civil penalty is not the exclusive remedy, and that it will not bar criminal prosecution.

Comments/Questions: ljm@gdnlaw.com

© 2008 Nissenbaum Law Group, LLC

Please visit our website at www.gdnlaw.com and our other blogs at www.nissenbaumlawblog.com; www.foreclosuredefenselawblog.com; www.saleofbusinesslawblog.com; www.internetdefamationlawblog.com; www.constructionlawinfoblog.com; www.filmproductionlawblog.com; www.internetlawinfoblog.com; and www.njbusinesslawblog.com

New Licensing Requirements for New Jersey Heating, Ventilation, Air Conditioning and Refrigeration Contractors

Construction Law:  On December 20, 2007, Governor Corzine signed into law the State Heating, Ventilating, Air Conditioning and Refrigeration Contracting License Law.  This establishes a State Board of Examiners of Heating, Ventilating, Air Conditioning and Refrigeration Contractors.  The Board is created within the New Jersey Division of Consumer Affairs.  The Law came into being after a long legislative process including a previous gubernatorial veto. 

The Law is effective immediately.  In addition to creating the Board, the Law creates licensing requirements for contractors performing heating, ventilating, air conditioning and refrigeration (“HVACR”) services.  Notably, the services covered are broadly defined and generally refer to “the process of treating and protecting the environment by the responsible handling, dispensing, collecting and cleaning of chlorofluorocarbons and other refrigerants in stationary sources, and controlling the temperature, humidity and cleanliness of air by using the ‘wet,’ ‘dry,’ ‘radiant,’ ‘conduction,’ ‘convection,’ ‘direct,’ or ‘indirect’ method or combination of methods, including those which utilize solar energy, to meet the environmental requirements of a designated area.” 

Moreover, the Law makes distinctions between apprentice tradespeople (one who is learning the practice), journeymen tradespeople (those who work under a master contractor) and master contractors.  Generally speaking, only a Master HVACR contractor can obtain a license, and with limited exceptions only a licensed Master HVACR contractor can  provide HVACR services.  The other tradespeople can generally only provide services under the supervision of, or in connection with, a licensed Master HVACR contractor or licensed firm.

The Law further establishes specific qualifications for a Master HVACR contractor to obtain a license.  The qualifications for a Master HVACR contractor’s license include:

• The individual-applicant must be at least 21 years of age;
• The individual-applicant must be a citizen or legal resident of the United States; and
• The individual-applicant must have the requisite combination of education and experience, as defined by the statute.

Proof of the statutory qualifications must be submitted to the Board with a written application and payment for the license fee prior to the examination for the Master HVACR contractor’s license.  The licensing exam will be a uniformed test administered by the Board and offered at least four times a year.  However, any applicant who has failed the exam must wait at least six months to be eligible for a re-examination. 

Notwithstanding the foregoing, the law provides for some exceptions to the examination requirement.  Specifically, if an application and proof of payment of the applicable fee is submitted to the Board within six months from the effective date of the Law (December 20, 2007), the Board shall issue a Master HVACR license without examination to:  “a. any licensed master plumber who has been engaged in the heating, ventilating, air conditioning or refrigeration business for at least two years prior to the date of his application for a Master HVACR license, or b. any person who has been engaged as a heating, ventilating, air conditioning and refrigeration contractor for at least two years prior to his date of application for a Master HVACR license.”  Accordingly, if you qualify under either of these prongs, and wish to avoid the Law’s examination requirement, be sure to proceed swiftly to submit your application.   

Notably, the license required hereunder is to be renewed biennially.  Currently, the Law allows for renewal of the license without reexamination so long as the renewal is timely and properly made.  However, the Law specifically states that the Board has discretion to make such license renewal contingent upon the satisfactory completion of continuing education requirements, which the Board may establish. 

The Law is effective immediately.  However, contractors will not be required to have the required licenses until 360 days after the initial establishment of the Board.  As of the date of this posting, the Board has not yet been solidified and therefore registration has not yet commenced.

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New York Legislature Amends Safety and Insurance Requirements for Construction, Excavation and Demolitions Operations

Construction Law:  The New York legislature amended the administrative code of the City of New York with respect to safety requirements during excavation and insurance obligations for construction or demolition operations.  The amendments were approved and made effective as of August 28, 2007.

Previously, distinctions were made based on whether or not the excavation was more or less than ten feet.  The new law applies equally to all excavations.  As amended, this regulation provides that whenever the safety of any adjoining building is or may be affected by an excavation, the person causing the excavation must provide safe support for the building, regardless of the depth of the excavation. To fulfill this duty, this person must, without limitation:

• Support the vertical load of the adjoining structure by proper foundations, underpinning or other equivalent means where the level of the foundations of the adjoining structure is at or above the level of the bottom of the new excavation;
• Support any increased vertical or lateral load on the existing adjoining structure by the new construction where the existing structure is below the level of the new construction; and
• Modify the foundation of the existing structure where the new construction will result in a decrease in the frost protection level for the existing structure such that it will fall below the established regulatory minimum.

The newly amended regulation also mandates that any person who obtains a permit for construction or demolition operations must, at his own expense, procure and maintain insurance to cover, for the duration of the operations, any and all adjacent property owners and their lawful occupants for all risks of loss, damage to property and injuries to or death of such persons arising out of the performance of the construction or demolition.

We therefore recommend that any individual or corporation undertaking construction, excavations or demolition operations in the City of New York make certain that they comply with the necessary support provisions and obtain proper insurance, in accordance with the amended regulations, prior to commencing operations.

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Amendment to New Jersey Uniform Construction Code Act Relating to Inspections

New Jersey Legislation:  The New Jersey legislature  recently amended the State Uniform Construction Code Act with regard to construction inspections.  With certain exceptions, the revised law provides that the same inspector must make a follow up inspection on single-family residence inspections, if he previously issued a notice of violation.  Specifically, the revised portions of the law state as follows:

When an inspector or team of inspectors finds a violation of the provisions of a construction permit, the code, or other applicable laws and regulations at an owner-occupied single family residence, and issues a notice of violation and an order to terminate the violation, the enforcing agency shall require the same inspector or team of inspectors who found the violation to undertake any subsequent reinspection thereof at the premises.  When the same inspector or team of inspectors cannot be assigned to undertake the reinspection, the enforcing agency may assign an available inspector provided the scope of the reinspection shall be limited to the violation for which the reinspection is required.

However, these requirements to not apply to violations of the plumbing or electrical subcodes, or to fire safety code violations, or to any violation of any other subcode that the Department of Community Affairs deems to be a health or safety violation.
 

Moreover, the law specifically provides that the property owner may nevertheless request a different inspector, team of inspectors, or supervisor, to perform any required reinspection.

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