A Watchdog That Seems Asleep : Contractors State License Board will be target of Assembly hearing

The dream of homeownership can turn to nightmare for those who encounter such problems as shoddy construction or overcharging.

Consumers in California are supposed to be able to rest easier because they can consult a watchdog agency, the Contractors State License Board.

As its name suggests, the board licenses contractors, and it provides information on builders. It all sounds good on paper. However, now there are some tough questions in the Legislature about whether this system is really working the way it is supposed to.

It’s not.

The Assembly’s Consumer Protection Committee has a hearing set for next month to collect the testimony of customers in Orange County and elsewhere about how the license board has responded to complaints about contractors. Apparently there is a great deal of unhappiness.

The board says that investigative staff limitations force it to pursue only those cases involving major fraud. In addition, contractors have the option of seeking arbitration whenever they are challenged by a customer. When that happens, the board opts out of the case. The result of these conditions is that this so-called consumer board is made impotent and irrelevant in some of these cases.

Then, to make matters worse, there is no guarantee that the findings of arbitration organizations, which conduct private hearings, will be reported to the license board and thus be made available to the public.

Arbitration organizations in California are not required to relay their rulings tothe license board. Alert consumers can send the board a copy of a judgment; only since 1991 have contractors who lost in arbitration been required to report to the board. This self-reporting system provides no certainty in either case.

Consumers shouldn’t be misled into thinking that a contractor with a history of problems is unblemished. But, unfortunately, at times that’s exactly the effect of the current system.

We hope the Legislature’s inquiry will provide a useful forum for needed reform.