Mandatory Arbitration Clauses / Construction Defects

Mandatory Arbitration is the worst clause a consumer can agree to as it strips them of their rights to a jury of their peers. And it's no surprise that Construction arbitration firms were either created by or with the help of major homebuilder associations, causing an immediate conflict of interest. I found an article on this subject that is a must read for any one entering into a contract to either renovate or build a home:

Home builders Stack Deck Against Buyers With Arbitration: New Report shines light on unscrupulous practices

Also, construction defects are beginning to rear it's ugly head around the nations a a result of the building frenzy in the late 90's and 2000.

Fallout from the 90’s Housing Boom: Construction defects begin to appear

Introducing a Construction Consultant Familar with Home Remodeling Nightmares

This past year I've pretty much devoted my time to putting together the Home Remodeling Bootcamp For Homeowners in an effort to really get consumers involved in doing as much homework and research in the areas that will ultimately determine the success or failure of their project. The last 9 years of counseling the "walking wounded" that have ended up on my site asking for help with their horrible situations really motivated me to create the Bootcamp. There were some common themes throughout all their stories that, had they known about in advance, would have saved them from a construction nightmare. And the same holds true for my own nightmare 10 years ago. If I knew then what I know now, well, I guess the ContractorsFromHell.com site would never have been created. With that said, it was my intent - and still is - that my experience and those of others could help homeowners avoid the pitfalls that we experienced

One of the points I bring out not only on my website but in the Bootcamp as well is finding a reputable Construction Consultant or Home Inspector that you can bring in at specific milestones of your project. This is a third party who can advise you on any challenges or questions you may have going with your contractor and renovation project. You can read more about that in detail on my site as well as in the Home Remodeling Bootcamp For Homeowners introduction page.

On the subject of Construction Consultants, I was contacted by a consultant out of New Jersey about a year and a half ago who found my website and wanted to introduce himself and let me know that he was very much in agreement with my views even though we come to it from different experiences. His name is Mark Trapani and the owner of Contracting Smart. And so we started a dialog and began exchanging information and ideas on what we could do within our own respective businesses to help consumers make better choices in contractors as well as educate them on the risks and realities of renovating an existing structure. Not to mention key components needed in the contract, spec sheet and complete transparency for all parties. Mark also is vested in educating contractors and architects in the business of contracting and how they can contribute to a better outcome with their clients.

We're now talking about developing a joint venture together and I'll be sharing more about that here on my blog. Until then...

Launching the Home Remodeling Boot Camp For Homeowners

OK - so it's been nearly a year since I've blogged on the Remodeling Lessons Learned blog but it's been in the interest of creating a new feature for the ContractorsFromHell.com site. True too, construction has been hit hard in the slowing economy and the resulting job losses have been great. I've spoken with a number of contractors the last 12 months who are really hurting and those with employees that had been with them during the fat times had to be let go. Fewer folks are renovating or building new homes and banks aren't lending. Grim to say the least.

But with that said there are those folks who out of necessity - fire, floods, water damage - that will be looking to remodel, repair, or reconstruct their homes as the economy begins to show glimmers of coming back around, albeit slowly. And that is actually beginning to happen.

In my neighborhood there are a number of homes undergoing renovations and on recent walks two new remodeling projects have popped up this week. Sure, it's not like the frenzy we've all witnessed in the previous 8 to 9 years of building and remodeling created in part by the banks' "loose lending" and refinancing during those years but it shows that people are beginning to show some confidence in spending their hard earned money.

But I want to get back to what I mentioned earlier in this blog post regarding the new feature I've been working on the past 12 months. And that is is "Home Remodeling Bootcamp For Homeowners" which is comprised of 12 core lessons that takes the homeowner through specific informational steps, downloads and links to relevant sites to help them understand the potential risks in construction projects, how to protect themselves, what to include in their contracts, what they need to consider including in their specifications sheet and the importance in doing so and much more.

I'll be touching on each of those core lessons in the Home Remodeling Bootcamp For Homeowners on this blog as well as what prompted me to create the Bootcamp in the first place. And I'll also talk about a new working relationship I've been forming with a Construction Consultant / Engineer / Contractor whose view of the construction industry as a whole is similar to mine. You'll learn more about him and his work in future blogs.

But for now, welcome back. And that goes for me as well ;-).

This past week I had the opportunity to be on a morning show based out of New York - The Morning Show with Mike and Juliet - where contractor scams and avoiding hiring unethical contractors was the theme of one of their segments. They opened the segment with my story where they had filmed me at my home in San Diego. They interviewed me briefly on the show and there was another woman from Pennsylvania whose contractor took $20,000 up front with the contractual starting date a few weeks later. Well it was more like 5 months later when he began but he sure was having the time of life using her 20 grand for God knows what.

He then went on to perform shoddy, unsafe work and dragged the project out for months always saying he needed more money in order to come back. $114,000 later he abandoned the project leaving her with just a shell and no protections from the elements. He was no where to be found and the city had to condemn the home leaving the family homeless. Apparently he did this to 14 other homeowners, one of them being a police officer and that's when he got caught. He's now sitting in jail waiting for his trial which is set for June 30th. In the meantime they've lost everything and have had to use their kids' college savings to survive on. I met them at the show and the kids just really looked depressed. I felt so bad for them and understood completely their disillusion with the construction industry, the legal system and the lack of consumer protection laws in their state.

Some States are far better at providing and disseminating important consumer protection information and guidelines than others. And the legal system in various states are more aggressive when it comes to punishing the offending contractors than others; so many of them are let off the hook only to go on and harm others. Its a vicious, dysfunctional cycle that the regulatory agencies are unable to control which only renders them useless when you're talking about protecting the consumer. Truth be told, they don't know how to do that in a way that works and can only perform the administrative end when it does come down to citing a contractor which typically isn't disclosed to the public until the contractor racks up a sufficient number of complaints and then it's too late. He/she has damaged a significant number of homeowners and has collected alot of money along the way and can go to sleep at night knowing what he/she has done. It's sick and something has got to give.

The attorney on the show, a litigator from New York shared with me that even though they may win cases against errant contractors they rarely can collect because these guys immediately file bankruptcy and do not carry General Liability insurance. And their not gone forever; they typically emerge in another city or state where there are limited or no licensing requirements and that's scary. California, Arizona, Nevada and Utah have somewhat similar protection laws and thus have reciprocity agreements in place where they can cross check applicants who apply for licenses. This would at the very least be a good fix to have with more states doing this to keep the roaming transient contractors from working and feeding off unassuming homeowners.

Next blog I'll talk about background checks and what I'll be offering for consumers and contractors alike.

Got an email regarding mechanics liens and unfortunately the email they provided me to respond was incorrect so I'll answer it here. But first the question:

As part of my kitchen remodel project, I purchased maple kitchen cabinets from a kitchen & appliance store in Burlingame, CA two years ago. I had my contractor install the cabinets. After installation, we discovered that the outside panel of the pantry came unfinished and wasn't maple but birch (it actually should have been the inside panel of the pantry that isn't seen). After going through several different unsatisfactory scenarios to try and correct the problem, the kitchen & supply store hired a wood refinisher to put a veneer on the unfinished panel and stain it. The work was completed approximately 3 months ago. Yesterday i n the mail I received a letter from the wood finisher stating that because the kitchen & supply store had failed to pay the invoice, he was demanding payment from me and he will place a lien against my property if I don't pay it. I have discovered that the kitchen & supply store is going out of business and it wouldn't surprise me if he is also filing bankruptcy. My question is this, given the fact that I did contract with this person to do the work, am I liable to pay the outstanding invoice that was sent to the kitchen & appliance store?

If you have a direct contractual agreement with the wood finisher, he has 90 days from the last time he was working on your project to officially record the lien with the county. If it is past that time he has lost his lien rights. Many contractors get sloppy with these time lines and often miss them but threaten anyway. They are betting you don't know the lien laws. Anybody can file a lien but to perfect it in court the burden of proof is on him and he has to meet strict criteria to win his case. Plus he has to hire an attorney to do this and that will cost him, so he must be absolutely sure he meets the requirements of the law.

If the kitchen store hired him as a subcontractor, then he has to send you a preliminary notice within 20 days of starting work on your project in order to retain his lien rights. Again if he didn't, he still will try to get money from you by filing a lien but he doesn't have any stand at this point. Be sure to read the section on mechanics liens on my site as well as the CSLB site.

Check your time line on when he was last on the property. If it is past the 90 days, he doesn't have a solid case. You can wait for the lien to become null and void and then petition the courts to have it removed. You can also consult with an attorney who specializes in construction law who can counsel you further.

Last week I got a call from a woman who was referred to me by a contractor whom I know. I typically don't take calls from homeowners but rather prefer they go to my site and glean the information they need there. But the woman was in a terrible position with another contractor, needed some answers that the "good" contractor couldn't provide and he knew I would be able to steer her in the right direction.

After hearing about her situation - and it was just so typical of unethical behavior - I gave her some suggestions on what steps she needed to take and made sure that she filed a complaint with the Contractors State License Board. To that end, I also sent an email to the Enforcement Chief giving him the contractors license number along with the woman's phone number so that he could contact her. And he did. The woman called me immediately after she spoke with him and was so emotional, in tears, and grateful for all the support she was receiving. I was just glad that she found a good contractor that I know and that the Enforcement Chief followed up on my request to contact this woman. So, here's what happened:

The woman hired a contractor to do the necessary repairs to her house that suffered severe smoke damage. She had met him on the horse trails around her home where many other homes were lost in the fires. After striking up a conversation with her, he told her he was a contractor and that if she wanted to get a bid he would be willing to access the damage. He then "convinced" her that he would wait for the insurance money and could get started right away. Well, he apparently had her sign two different contracts and she added some stipulations of her own in the second contract which also stated he was to get $1000 to start the project.

As the project began, the contractor's attitude changed from nice guy to one of being ticked off, was verbally abusive and constantly asking for more money. The woman, in her early fifties, recently became disabled and he was aware of her limitations. He wanted to know the entire amount she was getting from the insurance company - which is none of his damn business - and thankfully she declined to disclose the amount. The work itself was shoddy and the roof replacement was horrible, according to the insurance company who came out to inspect the work. He quickly told the woman to fire this contractor and get someone who is competent and experienced to repair his work as there were safety issues at stake as well. The situation only got worse after this.

When she told the contractor about the insurance report which was documented, the contractor started screaming at her and told her she HAD to let him back to do the necessary repairs on his own work. Really? Why didn't the idiot just do it right in the first place then? Answer: Because he's incompetent to do it right, doesn't know how and doesn't care about performing quality work; he's just out to make a buck, not build a business with a solid reputation. And no, she doesn't have to let him back in to do the repairs if he's proven that he can't do it right, which he has, and it's documented.

So what does he do? Why, he threatens to sue and lien her home of course. And get this: the guy just got his license in December of 2007 and three months into having the license he's already threatening to sue and lien a homeowner not to mention the shoddy work he performed. Wonder where he learned that from?!! This is the ugly part of the construction industry that sadly exists and seems to be growing as new licensees enter the arena and others who are struggling to stay afloat just "switch sides" and start behaving badly, violating the contractors' laws and no longer interested in building their business. It's all about the money. Seasoned contractors who are in it to build a solid business and a good reputation wouldn't even think of creating a scenario like the one I just described and I'm glad to say I know quite a few of them these days as a result of own work with my site.

The only thing the woman did was to check his license status with the CSLB and as I always say, just because someone has a license doesn't necessarily mean that they will be ethical or perform quality work that meets industry standards. And this is a perfect example of just that.

Here's a recent email I've received from a Casting Director in New York. They are actively looking for both homeowners and contractors who are having problems with their remodeling projects. So if you think you fit the bill - whether you're a homeowner or a contractor - contact them. They need some folks to work with so don't hesitate to contact them.

Hi, I just took a look at your site and it is a really helpful resource. I am a casting director for superfine films and we are casting a show that deals with home owners and contractors. I was hoping you might know some families that are in need of help. Thanks in advance for all of your help.

CASTING CALL FOR HOMEOWNERS AND CONTRACTORS IN DISPUTE My name is Michael Raptis and I am the Casting Director for Superfine Films. We are a TV production company based out of New York City. I am looking to cast Homeowners and Contractors for a home renovation dispute mediation and resolution TV show. Most of the homeowners and contractors that cross your path would love the opportunity that our TV show offers. I am seeking out current disputes that I might be able to help resolve to the satisfaction of both parties. Could you share with me some leads? The scope and breadth of the dispute can range from any of the problems you usually see including, but not limited to, type of work, budget, build problems, personal problems, and homeowner changes. Since we are a television show, we MUST complete the project in a relatively short amount of time (about 6 days), which will fit nicely with the needs of a homeowner and contractor. This means we seek projects that are large enough in scope to show a good "before" and "after" experience, and small enough in scope to be finished in no more than about three weeks.

Some examples would be a kitchen expansion, new room, bathroom remodel, garage build, etc. Please keep in mind that we will consider all sizes of work if the people and the project appear good for the show. We intend to make absolutely sure that the dispute is solved to the satisfaction of both parties and that the project gets done right, on time and on budget. It should be a benefit for the homeowner via dispute resolution and project management, and for the contractor for the same reasons as well as excellent publicity for his or her business. And of course, it could save them both the time and cost of legal action. Interested parties should contact me immediately! The sooner we speak, the sooner we can try to resolve these disputes! Please call or email me ASAP! Michael Raptis Casting Director Superfine Films 60 Grand Street, 4th Floor New York, NY 10013 O: 212-941-6838 C: 646-784-0779 Email Michael Raptis michael@superfinefilms.com

ABOUT THE COMPANY:Superfine Films is a Manhattan based film and television production company specializing in high-quality social issue documentary and reality television. Our mission is to create unique, compelling, genre-redefining content that challenges, excites and engages viewers from start to finish. Founded five years ago by award-winning filmmaker and television producer Steven Miller, Superfine has since grown to include the talents and energies of a tightly knit corps of writers, producers, shooters and editors, and is represented by N.S. Bienstock. Superfine is currently in production on the sixth season of the hit show Psychic Detectives, the Court TV crime documentary series that explores the use of psychics by law enforcement and how psychics have helped to actually solve crimes; and Rock and Roll Acid Test, the Fuse Network series that plays a wild game of Truth or Dare when we put music myths and legends under the hot lights of our ultimate scientific testing. Past work includes Heroes, a reality recreation based series for the Hallmark Channel, which depicts stories of ordinary citizens in acts of extraordinary courage. Superfine was nominated for an Emmy for the documentary film Meeting with a Killer: One Family's Journey, a story of redemption and forgiveness set inside one of Texas' most notorious prisons.

P.S. Sorry for not posting the past 4 weeks but that nasty flu bug invaded our home and we're all just getting back to life!