Assembly Panel Blasts Contractors Board : Housing: Report says the licensing agency fails to investigate or discipline those accused of doing shoddy work.


The state board that oversees licensed contractors in California is "critically deficient" in protecting consumers from unscrupulous building trades companies, according to a report issued Tuesday by the state Assembly's consumer protection committee.

According to the report, employees of the Contractors State License Board repeatedly told state investigators reviewing the board's activities that the agency "does not represent consumers," even though state law makes it responsible for disciplining the 275,000 contractors it licenses and supervises.

License board officials could not be reached for comment, but in the past they have said the board has a very limited budget and staff to monitor contractor activities throughout the state.

The board was established by the state in 1929 to regulate contractors and issue licenses to them. It has been criticized in the past for favoring contractors over buyers but says that in recent years it has tried to be more helpful to consumers.

The Assembly report was issued in conjunction with the committee's hearing in Sacramento today to investigate the board's performance. The hearing was scheduled after a series of articles appeared last month in the Orange County edition of The Times about the practices of the license board.

The Assembly report criticizes the board for reportedly ignoring consumer complaints, using a quota system that forces its investigators to abandon cases that cannot be completed quickly, failing to check the accuracy of contractors' license applications and refusing to suspend licenses when clearly required to do so by state law.

The quota system is not a formal one, the report said. Instead, members of the license board staff said in confidential interviews that top board officials pressure investigators to close cases quickly and that staff members with large backlogs of active cases get in trouble with their superiors.

Criticizing contractors, of course, is a favorite pastime in California. For the 12 months ended June 30, one complaint was filed with the board for every 12.5 licensed contractors in the state. Even auto mechanics fared better.

The report noted that the contractors license board routinely refuses to log many complaints, making the statistics look better than they deserve to be.

While most consumers think the license board is the agency that will protect their interests in disputes with contractors, the opposite seems to be true, according to Michael Miiller, senior consultant to the Assembly Committee on Consumer Protection.

The board refuses to investigate complaints against contractors who use private arbitration in disputes with customers, he said, and when a complaint cannot be dismissed because of arbitration, the board often attempts to shift the matter to Small Claims Court.

"They tell people they will get better and faster service there, but the Small Claims Court has a $5,000 limit, and that's peanuts in most cases involving contractors," he said. "It barely covers legal fees for many of the people we've talked to."

In addition, the board refuses to provide consumers with contractors' addresses so they can be served with small-claims suits.

The committee staff interviewed 84 consumers whose cases were dismissed with no action by the license board in the last year. Only four said they were satisfied with the way the board handled their cases.

A dozen consumers are scheduled to testify during today's hearing. Leading the pack will be Regina Lamourelle, who tried without success to get the license board to investigate the contractor who built her family's custom home in Mission Viejo.

Lamourelle and her husband paid the contractor $178,000 and have since spent nearly $125,000 more for repairs and legal fees, she said. In an inspection performed after the house was completed, a county government building inspector identified nearly three dozen major building and safety-code violations.

"License board staff members tell me that they don't suspend licenses, because that would put the contractors out of business and they wouldn't be able to pay their debts," Miiller said. "But this way, they can stay in business and keep harming other customers."

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