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Publication Date: Spring 2000

CNYC thanks Max E. Verga of the New York City Department of Consumer Affairs for the following article.


COMPLAINTS RISE AGAINST HOME-IMPROVEMENT CONTRACTORS

The New York City Department of Consumer Affairs has noticed a dramatic increase in recent years in complaints filed against Home Improvement Contractors. Many of those complaints are filed by co-op shareholders and condominium unit owners against contractors who were not licensed to perform home improvement work in the five boroughs. Commissioner Jane S. Hoffman is committed to preventing consumers from becoming the target of unscrupulous Home Improvement Contractors.

Investigation of complaints by co-op shareholders often reveals that the board of directors of the co-op granted permission for the work without checking the vendor's license and complaint status. An alarming number of complaints result in the consumer being advised to sue the vendor based on the Department's lack of hearing jurisdiction over unlicensed vendors and based on the vendor's unwillingness to resolve the matter. In some cases, the vendor has disappeared, leaving a half-finished apartment and a consumer who can not afford to hire a licensed contractor to fix work left undone or done poorly. Other scenarios include damage to other units and interior building spaces, defaults on loans, some of which have been secured with the vendor's "help", and ongoing bickering between shareholders and boards over who is responsible for the mess.

Ultimately, co-op boards are left with many of the headaches. Boards can prevent many of the problems simply by contacting the Department before approval is given for work to be done within an apartment. The Department can provide information about the license status of the Home Improvement Contractor and information about the number of complaints a licensed vendor has received within the preceding 24 months. In addition, the Department of Consumer Affairs mediates complaints filed against both licensed and unlicensed vendors. It can issue violations against unlicensed contractors and can confiscate the vehicles and goods of unlicensed vendors.

Boards can take the following steps to prevent problems from occurring:

  • Establish a well-defined policy towards construction work done in an individual unit.
  • Make certain that all shareholders secure approval from the board before any repairs coming under the heading of Home Improvement are made.
  • Have the shareholder provide a copy of the written estimate/contract with the vendor. The contract must include the vendor's full name, address, license number, cancellation clause, a clause stating that the vendor will secure any necessary permits, and a Workers Compensation clause. Target completion dates should be included and the listing of work-related items should be clear and as detailed as possible.
  • Have management check the vendor's license and complaint status by calling the Consumer Affairs Hotline at (212) 487-4444. Do not take the word of the vendor when it comes to his or her license status. Vendors are required to have their license number on all printed material, including business cards. The statement "licensed and insured" on forms is no guarantee that the vendor is telling the truth. Even if the vendor is based outside the five boroughs, a license must be secured if work is being done within the five boroughs.
  • Make certain that the vendor has secured all necessary permits. Keep in mind the need for any Landmarks Commission variances/permits for work done on external areas.
  • Advise shareholders that all problems should be reported to the contractor in writing (Certified Mail preferred) with photocopies given to the board. Advise shareholders to file written complaints with the Department if problems are unresolved. Both shareholders and board members should remember to document any problems and keep detailed minutes of any discussions held at board meetings about the contractor problems.
  • Make certain that management looks at the completed work before the shareholder makes the final payment to the vendor.
  • Keep in mind that the Department of Consumer Affairs can only mediate complaints between consumers and vendors.

    Many cases can be easily resolved once the vendor is reminded of his or her responsibilities based on the laws and regulations promulgated by the Department. If the case cannot be resolved through mediation, an inspection of the premises can occur if the quality of the work done by the vendor is in question. A Departmental Hearing is the next step if every effort to reach a mediated solution has not resulted in a positive outcome. The hearing process is a long one and compromises may have to be made by both the consumer and the vendor.

    Securing estimates from more than one vendor will give the consumer a better idea of how prices can vary. Learning about the work to be done shows the vendor that you are a savvy consumer. The best form of prevention for co-op owners is to hire only licensed contractors. Boards need to enlist all the help required to help them deal knowledgeably with renovation issues, and they should have strong, trusting relationships with shareholders. For the average shareholder, the board-approval process can and should be the first line of defense.

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