Contractor Agency Nailing Unlicensed Operators in Stings

By STEVE CARNEY

June 27, 1998 12 AM PT

SPECIAL TO THE TIMES

They looked like a typical suburban couple with a baby on the way, interviewing contractors to lay tile, build a screen enclosure, hang blinds and do other jobs at their home in a new Mission Viejo housing tract.

But in two days’ time, the pair--who were actually undercover state investigators--cited 14 unlicensed contractors who had offered to do work on the home, in violation of laws that require contractors to register with the state, meet experience requirements and pass an exam.

As they did after the Northridge earthquake and flooding in Northern California, both licensed and unlicensed contractors offering to repair homes have swarmed neighborhoods throughout the state in the wake of El Nino-related storm damage that has totaled in the millions, say officials with the Contractors State License Board.

But the contractor stings--four to six of them a month throughout Southern California--have put a dent in the problem of unlicensed contractors faking state approval, said Dennis Bishop, a supervising deputy with the board who organized the two-day operation. He said there are signs the effort is working: When he started with the agency in 1976, half of all contractors that investigators encountered were unlicensed. Today only 10% are, he said.

The stings, along with sweeps of construction sites to check licenses, are the most visible efforts of the board, which faced criticism five years ago from consumers and legislators that it wasn’t doing enough to regulate builders.

“When there are disasters, that’s when we really beef up our enforcement,” said license board spokesman Jonathan Parsley. “It brings people out of the woodwork, because they know the work is there.”

Parsley said the agency cited 2,080 unlicensed contractors statewide last year, and gets 30,000 complaints per year.

Homeowners often use unlicensed contractors because they can be cheaper than licensed contractors, who have to pay for their state licenses, for workers’ compensation insurance and for their employees’ payroll taxes, Bishop said.

“It’s easy to say, ‘As long as it’s cheaper, I don’t care.’ [But] is it really cheaper if something happens?” Parsley said.

The lack of a license doesn’t necessarily mean a contractor is a scam artist. Bishop said many feel they are too busy working to get their licenses, may be intimidated by the tests or prefer not to get involved with the state government.

But a homeowner who hires an unlicensed contractor has little recourse if a job is done poorly, and will have a hard time tracking a contractor who does pull a swindle--taking a large deposit and leaving an unfinished job.

“You don’t even know if you have this person’s true name,” Parsley said.

And because unlicensed contractors are not required to carry workers’ compensation insurance, if they’re hurt on the job, it’s the homeowner who is liable, Bishop said.

The contractors cited during the sting now must appear in court to face the misdemeanor charges. Repeat offenders face fines or jail sentences, while first-time offenders are typically ordered to do community service and get their licenses, Bishop said.

Most of the contractors the investigators caught were cooperative--”Thank you. You guys have a good day,” chirped one as he left, citation in hand. Others simmered at being nabbed, especially those who ignored their own suspicions they were walking into a sting.

“Your occupation?” investigator Sandra Mendez asked one, while filling out a report. “Idiot,” muttered the contractor, his hands cuffed behind his back.

The investigators cover all of Southern California south of Ventura County from their Buena Park office. They recently worked a sting operation at the Capistrano Shores mobile home park in San Clemente, where homes were battered in a January storm that sent waves sweeping over eroded beaches and crashing into living rooms.

The team arrested several unlicensed contractors who descended on the park to do repair work for the beleaguered residents.

“They were specifically targeting those folks,” Bishop said.

Homeowners--especially those now needing storm repairs--should take their time, do their research and find a reliable contractor, Bishop said. “Don’t make a natural disaster a man-made one.”

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Building Relationship

Hiring a contractor can be complicated and more involved than simply soliciting bids. According to the Contractors State License Board, any job that costs $300 or more requires a licensed contractor. Here’s a basic checklist to make sure you hire the best company for the job:

* Decide what type of contractor is needed. Depending on the project, you might need a general contractor or a specialist, such as a painter or roofer.

* Obtain at least three bids for the work. Make sure the bids are based on the same specifications. Do not automatically accept the lowest bid.

* Ask to see the contractor’s pocket license and photo identification. Call the CSLB to verify the validity of the license.

* Call local references and ask if they were satisfied with work.

* Ask to see copy of insurance for workers’ compensation, property damage and personal liability. Or ask for name of insurance agency to verify insurance coverage.

* Ask how and when the work will be done. Agree on completion deadlines; put those dates in all contracts. Get everything in writing.

* Obtain written warranty from contractor for labor and materials.

* Include total price, payment schedule, cancellation policies, removal of debris and special requests in contract.

Complaints Filed

The number of complaints against both licensed and unlicensed contractors statewide has remained steady over the past five years:

Year: Number of Complaints

1992-93: 31,674

1993-94: 29,631

1994-95: 31,071

1995-96: 30,759

1996-97: 30,967

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