Contractors Board Says It Will Tackle Problems : Consumers: Complaints from O.C. home buyers spur promise to protect public from unscrupulous contractors.

TIMES STAFF WRITER

The state board that oversees building contractors agreed after a daylong hearing Wednesday to take steps to protect consumers from unscrupulous operators in the construction trades.

A dozen homeowners, including several from Orange County, told the Assembly consumer protection committee horror stories of contractors who they say took advantage of them, violated safety codes and did shoddy work that cost thousands of dollars to repair. They also testified that the license board turned a deaf ear to their pleas for help.

A series of reports in The Times Orange County edition last month detailed how some builders are able to exploit lax enforcement procedures by the license board.

Officials of the Contractors State License Board conceded Wednesday that they need to tackle several problems pointed out during the hearing and in a highly critical legislative staff report released earlier this week.

"I will not try to convince you we are perfect or don't make mistakes," said David Phillips, executive officer of the board, which is responsible for overseeing the 275,000 contractors licensed in California.

The board was harshly criticized by lawmakers Wednesday for ignoring consumer complaints, putting pressure on investigators to abandon cases that cannot be settled quickly, failing to substantiate license applications from would-be contractors and refusing to suspend builders when state law clearly requires it.

"Those are the kinds of actions that do not lend the consumer confidence," said Assemblywoman Jackie Speier (D-Burlingame), chairwoman of the consumer protection committee.

Speier and other committee members repeatedly suggested during the eight-hour Capitol hearing that the licensing board must make improvements or face new legislation to set parameters for its performance. Some lawmakers talked even tougher, threatening to return to the Legislature next year and ask that the board be abolished.

"At the moment my feeling is we should scrap it and start over," said Assemblywoman Debra Bowen (D-Marina del Rey). But she acknowledged that, for now, the only prudent course is to let the licensing board conduct a self-analysis and "reinvent" itself in the months before the Legislature reconvenes next year.

The chorus of criticism was joined by homeowners who voiced complaints against the board and cited personal tragedies involving contractors who took advantage of them.

Regina Lamourelle, a Mission Viejo woman unable to get the license board to investigate her complaints against a contractor who she said botched her family's custom home, said the process is akin to "an open-and-shut case. You open the case, and they shut it."

A county building inspector found dozens of major building and safety code infractions in the construction of Lamourelle's home, but the license board rejected her complaint against the builder--along with those filed over the years by several other clients--because his contracts call for binding arbitration.

The builder has denied any wrongdoing and says he tries in all cases to resolve valid complaints by new-home buyers.

Moreover, while state law requires the board to suspend contractors who do not report judgments and arbitration awards, no such action was ever taken against Lamourelle's builder.

Phillips told lawmakers at the hearing that the licensing board adopted a policy about five years ago of ignoring cases bound for arbitration because it was "drowning in complaints" from disgruntled homeowners.

"In regulating the largest industry in California, no, we don't have the resources" to handle the 30,000 complaints that pour in each year, Phillips said. "I'm trying to do the best I can with the resources I have."

His response did not sit well with the committee members. Assemblyman Byron D. Sher (D-Palo Alto) noted that the policy of passing over arbitration cases "completely insulates" a contractor from disciplinary action by the board. Speier went further, saying the board and its staff are ignoring state law that requires all legitimate complaints be investigated. "You don't have a choice" but to tackle all cases, she said.

Lamourelle and several other homeowners also complained that a toll-free number operated by the license board to provide information on the background of contractors is ineffective. In Lamourelle's case, for instance, the license board reported that her contractor sported an unblemished record; actually, he had been sued by more than a dozen of his customers.

Laverne Rudisill, a Los Alamitos woman who ran into trouble with the contractor she hired to build an addition to her home, suffered a similar fate. The licensing board ignored her complaint because she agreed to arbitrate the dispute. Even after the builder failed to pay more than $40,000 awarded Rudisill, the board took no action.

"Just because we agreed to arbitrate doesn't mean he wasn't guilty of the things he did to us," she said.

In addition, Rudisill said, "we would have never allowed this contractor in our house" had the family known of his checkered history of problems. Instead, she was informed by the license board when she first inquired that the builder had a license "in good standing," Rudisill said.

Others complained that the board is too lenient in passing out licenses to prospective contractors. Though the board administers a rigorous test to every applicant, a passing grade ranges from just over 50% for disciplines such as dry-walling--hanging the plasterboard that makes up the inside walls of houses--to 74% for heating and ventilation specialists.

"I'd like to thank the contractors board for sending D students out on the streets, because that's what they're doing," said Larry Michaels, an Orange resident who was unable to get the board to investigate a contractor he tangled with in an aborted office-building deal.

Several lawmakers, meanwhile, criticized the board for a lax approach to verifying the work history of those applying to become contractors. Only 3% of all applications are reviewed to ensure that background information is correct.

Even so, the board has enough employees reviewing applications that each investigator can spend upward of three days on each applicant, Bowen said. She and other lawmakers suggested that several other licensing agencies, among them boards that certify doctors and lawyers, do a more complete job with proportionally fewer people.

"You absolutely have to investigate all the applications," Speier said. "This is a fundamental flaw in your operation. It has to be fixed."

Speier also griped that most of the staffers who do the background checks drive state cars. "This is the kind of thing that makes reinventing government a joke," she said, adding that the board "appears to be bending over backward to provide contractors with licenses."

Faced with an avalanche of complaints, contractor board officials promised to look at the way other agencies review license applicants and make changes to better regulate the building industry.

"We're going to do the very best we can," Phillips said. "I will work on this. . . . I'm very perturbed."

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