Friday, May 28, 2010

UNLICENSED HOME CONTRACTORS

I have had this experience personally: an unlicensed home improvement contractor in New York City, Nassau and Suffolk County, and other surrounding counties, cannot sue homeowners for non-payment of its bills for services rendered or file a mechanic's lien, etc. This law was enacted to protect homeowners from unscrupulous construction contractors and its solicitors. Even where the homeowner knew that the contractor was unlicensed prior to the performance of the work, courts have still prevented the contractor from suing for payment, consistently holding that contracts made by unlicensed home improvement contractors are illegal and unenforceable. To determine whether a home improvement contractor is licensed, contact your county's Department of Consumer Affairs.

But what if you paid the contractor some money upfront? I made an upfront payment and no work was performed (it was a small job, only $300 was involved, but this proves that even attorneys make foolish mistakes). Certainly, one can sue in small claims or another court for a return of payment. But what are the chances of collecting on a judgment? Defendants who operate a business illegally usually hide assets, thus making enforcement of a judgment nearly impossible. What I did was contact the District Attorney's office and filed a complaint for operating a home improvement business without a license, a misdemeanor. The Nassau County District Attorney arrested the contractor and made a plea bargain deal (this took over a year) in which the contractor agreed to return my money - which the contractor never did. In fact, I am assuming that after the plea bargain was made, the contractor moved to another location as the District Attorney, after I advised them that the plea bargain payment deal was never complied with, advised me that they could not locate the contractor. But here is a story from July 21, 2009, North County Gazette:

"NASSAU COUNTY—A five-week investigation into unlicensed contractors in Nassau County has resulted in the arrest of 42 individuals.

Four face felony charges, including third degree grand larceny for allegedly stealing thousands of dollars from homeowners for improvements that were either not finished or never even started.

Investigators also rented a home in Nassau County and called in unlicensed contractors to perform “renovations.” The two-week operation yielded 12 charges of Operating a Home Improvement Business without a License, a misdemeanor, and the contractors’ vehicles were seized under the County Forfeiture Law. Twenty-six contractors were charged with the same misdemeanor after an investigation into complaints filed with Consumer Affairs.

The arrests were part of a multi-county enforcement sweep also executed in New York City and Westchester County.

“When you hire an unlicensed contractor, you’re rolling the dice,” Rice said, adding that consumers should thoroughly research home contractors before someone is hired. “Our homes are our most valuable financial asset and it is essential we entrust them to licensed, experienced professionals. Don’t let your American Dream become a nightmare.”

Facing felony charges are:

Derek Armstrong, 47 of Hempstead, was charged with second degree criminal possession of a forged instrument, falsifying business records and first degree offering a false instrument for. District attorney Kathleen Rice said Armstrong was hired by a Baldwin homeowner to do work on his home in 2005. Armstrong submitted the architect’s plans to the Town of Hempstead to obtain a permit, but the architect refused to work with Armstrong, who then put a different architect’s name and seal on the plans. The plans were also altered. He faces up to seven years in prison.

Edward Murphy, 42, of Wantagh, was charged with third degree grand larceny. Rice said Murphy was contracted to purchase backup generators for two group homes for autistic adults in Seaford and East Meadow. Murphy was paid $28,000, but never provided the homes with the generators or a refund. He faces up to seven years in prison.

John Napolitano, 47, of Hicksville, was charged with four counts of third degree grand larceny and first degree scheme to defraud. Rice said Napolitano defrauded four different homeowners of more than $113,000. Napolitano either took money and never performed any work at all or abandoned a project halfway through. One Long Beach homeowner had her entire kitchen demolished when Napolitano stopped work and didn’t refund her any money. He faces up to seven years in prison.

James Nichols, 46, of Rosedale, was charged with third degree grand larceny. Rice said Nichols received $47,500 from a homeowner to add an addition to his Elmont home. Nichols performed no work and did not refund the money. Nichols faces up to seven years in prison.

Charged with Operating a Home Improvement Business without a License in the house sting are Roberto Dopazo, 47, of Huntington; Donald Colucci, 57, of North Babylon; Jedidiah Irons, 22, of Oceanside; James Contrino, 33, of Oceanside; Debra Kaplan, 44, of Massapequa; George Brady, 55, of Queens; Manuel Vera-Munoz, 43, of South Farmingdale; Thomas Gallo, 48, of Levittown; Ronald Hinderhofer, 49, of Oceanside; Thomas Longo, 38, of North Merrick; Muzaffer Geyikgulo, 54, of Valley Stream; and Luis Saquipulla, 36, of Corona. All face up to a year in jail.

Working in conjunction with the Nassau County Department of Consumer Affairs, the following people were charged with Operating a Home Improvement Business without a License after complaints were lodged with Consumer Affairs by homeowners:

Thomas Gironda, 40, of Port Jefferson Station; Arthur Spero, 47, of Wantagh; Lionel Toby, 51, of Long Beach; Joseph Sarno, 69, of Bayside; Bohdan Kuzminskyy, 48, of Holbrook; Joseph Samaroo, 49, of Cedarhurst; Rod Darling, 41, of Hempstead; Christopher Martino, 39, of Lynbrook; Eladio Otero, 61, of Malverne; Yojin Choi, 44, of Great Neck; George Stern, 60, of Syosset; Nicholas Spano, 46, of East Meadow; Louis Hapst, 43, of Copiague; Ramadan Nela, 46, of Dix Hills; Russell Martini, 31, of Westbury; George Lopez, 40, of Oceanside; Edward Hoffman, 46, of Islandia; Anthony Delmaro, 37, of Deer Park; John Bradford, 44, of East Rockaway; Rulx Regala, 39, of Bohemia; Larry Field, 46, of Elmont; Christopher J. Galvin, 46, of West Babylon; Thomas Heaney, 42, of Farmingdale; Adolph Ford, 63, of Hempstead; Daniel Dallolio, 43, of North Bellmore; Joseph Sceppa, 39, of Commack. All face up to a year in jail."

56 comments:

  1. The contractor must also remain licensed during the entire time work is performed. Several months ago chapter 345 of the Suffolk County Code for Licensed Occupations was re-codified giving the Commissioner of the Department of Consumer Affairs the authority to administer punitive actions against violators of the code unlicensed or licensed. This however will not stop a contractor from filing a frivolous lien; as a license is not required to do so. I believe the law should be further improved to impose penalties on unlicensed contractors who file liens in municipalities where a license is legally required to do business in the first place. Such contractors are flaunting the fact that they broke the law imposed by that jurisdiction.

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  2. Thank you for your comment.

    I have found a web service that allows contractors to seek a lien by using an online form and I do not see the service asking for a license number. A quick review of the Lien Law did not reveal that requirement and it appears that in that situation you describe, the below case reveals the only remedy available:

    MATTER OF DUCE CONSTR. CORP. v. COMPACT HVAC, 110629/09 (11-18-2009) 2009 NY Slip Op 32990(U)
    IN THE MATTER OF DUCE CONSTRUCTION CORPORATION,
    Petitioner-Contractor, For An Order Discharging and/or Cancelling
    Certain Mechanic's Liens filed against Properties located in the
    City of New York, County of New York, State of New York, and
    Cancelling Undertakings made to Discharge Liens v. COMPACT HVAC,
    INC. d/b/a CASTRO CO., Respondent-Lienor.
    110629/09.
    Supreme Court of the State of New York,
    New York County.
    November 18, 2009.

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  3. It seems that Unlicensed Contractors who use the lien law to intimidate or extort money from clients may do more harm to themselves. By exaggerating the amount due they are liable according to the law for damages equalling the exaggerated amount. (Chap.39-a of the NY State lien law)
    http://public.leginfo.state.ny.us/LAWSSEAF.cgi?QUERYTYPE=LAWS+&QUERYDATA=$$LIE39-A$$@TXLIE039-A+&LIST=SEA1+&BROWSER=BROWSER+&TOKEN=50041524+&TARGET=VIEW.
    It also seems to follow logically that an unlicensed contractor is not a contractor at all in a jurisdiction where license requirements exist; thus the entire amount for the job even if it is agreed upon by both parties is an "exaggeration" since the work if done by the unlicensed individual represents a breach of contract from it's inception. It is analogous to a physician conducting a procedure without the proper credentials, but handing you a business card indicating otherwise. This is a clear and knowledgeable misrepresentation. Of course the lien holder would need to commence an action for this to apply.
    The point regarding the location of the contractor's assets is relevant. This prompts two questions:
    1) Is the spouse of the contractor responsible for judgments against the contractor?
    2) Can a motion to dismiss a lien (due to the contractor's license status) be brought to Small Claims Court?

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  4. Thank you for your comment.

    Again, reminding you that you should consult with a lawyer on these issues and this post is not legal advise:

    1. That would depend on various factual situations but I could see a situation where that might happen - you should go over the facts of your case with an attorney and it may require some investigation.

    2. The small claims court is a court of limited jurisdiction for money claims only up to $5,000.

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  5. An unlicensed contractor - John Bradford from East Rockaway -as mentioned in this article, is under investigation by Nassau County and faces one year in prison. John Bradford has since moved to Suffolk County and continues to operate as an unlicensed contractor and steal from unsuspecting customers. He continues to collect money upfront and not perform services promised. Does Nassau and Suffolk counties work together or are these contractors able to change their address in order to avoid prosecution?

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  6. Thank you for your comment.

    Again, reminding you that you should consult with a lawyer on these issues and this post is not legal advise:

    You may want to contact the Suffolk DA and/or Department of Consumer Affairs but whether or not a government agency will take any action or work with another governnment agency is a decision made by the agency.

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  7. Interestingly enough there is a government agency in Suffolk County that actually aids unlicensed contractors in their attempts to shake down consumers. That agency is the Suffolk County Clerk's Office. Here a lien service can file a lien on behalf of an unlicensed contractor with the county clerk. Such a contractor is breaking the law working without a license by his own admission. The existence of a contract required by NY State General Business Law for transactions over $500.00 is not required by the lien service or by the clerk's office. Nor is the license number of the individual. There the lien sits, unenforceable, but as a stain on the title for a year.
    It is a basic precept in Western Law that one can not profit from illegal activity. The lien services and the county as well as many unlicensed contractors are doing just that.
    The Department of Consumer Affairs receives approx. 1500 complaints a year and can only act on the the most grievous infractions. The DA only follows up on cases sent over from Consumer Affairs. Now that the commissioner of Consumer Affairs has the power to act directly in cases of where license violations are obvious ( re-codification of chapter 345 of the county Code) , such action should be routine. Fines should assigned as soon as violations can be confirmed. Hopefully this will be the case.

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  8. Thank you for your comment.

    That statement would be true for all counties as the state law does not require that information in the Notice of Lien. Here is the statute as modified March 2010:

    " § 9. Contents of notice of lien. The notice of lien shall state:
    1. The name and residence of the lienor; and if the lienor is a partnership or a corporation, the business address of such firm, or
    corporation, the names of partners and principal place of business, and if a foreign corporation, its principal place of business within the state.
    1-a. The name and address of the lienor's attorney, if any.
    2. The name of the owner of the real property against whose interest therein a lien is claimed, and the interest of the owner as far as known to the lienor.
    3. The name of the person by whom the lienor was employed, or to whom he furnished or is to furnish materials; or, if the lienor is a contractor or subcontractor, the person with whom the contract was made.
    4. The labor performed or materials furnished and the agreed price or value thereof, or materials actually manufactured for but not delivered to the real property and the agreed price or value thereof.
    5. The amount unpaid to the lienor for such labor or materials.
    6. The time when the first and last items of work were performed and materials were furnished.
    7. The property subject to the lien, with a description thereof sufficient for identification; and if in a city or village, its location by street and number, if known. A failure to state the name of the true owner or contractor, or a misdescription of the true owner, shall not affect the validity of the lien. The notice must be verified by the lienor or his agent, to the effect that the statements therein contained are true to his knowledge except as to the matters therein stated to be alleged on information and belief, and that as to those matters he believes it to be true."

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  9. I am a licensed Master Electrician in Suffolk County. Unlicensed hacks, use rediculouly low prices to lure in homeowners. They then shodilly perform their work. a licensed person is then required to fix the mess. The homeowner then complains the Correct job costs to much. How much should peace of mind cost, when an unqualified installer messes up and burns your house down. A properly trained individual must redress the situation for more money and the homeowners have no idea why it costs signifigantly more. Safety is key not money and people always fail to recognize that.

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  10. Recently, I was consulted on this issue. An attorney was representing an unlicensed contractor who did not get paid; yet, the owner, knew the contractor was not licensed. The attorney wanted to know if the unlicensed contractor had any remedy for payment. I gave the attorney this recent case which basically sums up the issue:

    QUICK START CONSTR. CORP. v. STAIGER, 2010-04061 [2d Dept 10-26-2010]

    Decided on October 26, 2010.

    DECISION & ORDER

    During the summer of 2007, the defendants contracted with the
    plaintiff, Quick Start Construction Corp., to perform renovations to their
    home in Patchogue. The work commenced in September 2007. In December 2007
    the plaintiff presented the defendants with a contract for additions and
    extras. The defendants refused to sign the proposed contract or to pay
    any further amounts. In March 2008 the plaintiff filed a mechanic's lien
    against the defendants' property for the sum of $65,905. In 2009 the
    plaintiff commenced this action against the defendants. After issue was
    joined, the defendants moved, inter alia, for summary judgment dismissing
    the complaint on the ground that the plaintiff was not a licensed home
    improvement contractor in Suffolk County, and was thus unable to recover
    any allegedly outstanding monies from them. The Supreme Court denied the
    motion. Thereafter, upon reargument, the Supreme Court adhered to its
    original determination. We affirm.

    Licensing statutes are to be strictly construed and an unlicensed
    contractor forfeits the right to recover damages based either on breach
    of contract or quantum meruit (see Flax v Hommel, 40 AD3d 809, 810;
    Callos, Inc. v Julianelli, 300 AD2d 612, 613; George Piersa, Inc. v
    Rosenthal, 72 AD2d 593, 594). Moreover, a home improvement contractor
    must plead possession of a valid license in order to commence an action
    to foreclose a mechanic's lien (see Nicotra v Manger, 64 AD3d 547).

    Here, the plaintiff explicitly pleaded that he was a duly licensed Home
    Improvement Contractor pursuant to a license issued by the Suffolk County
    Executive's Office of Consumer Affairs. In
    Page 2
    support of their motion for summary judgment, the defendants submitted,
    inter alia, a copy of the Home Improvement Contractor License issued
    specifically to "Robert M. Chiarello doing business as Quick Start
    Construction Corp." The defendants alleged in conclusory fashion that the
    license was issued to Chiarello, not to the plaintiff, and that, as
    such, the plaintiff was unlicensed and unable to recover any unpaid sums
    from them. Since corporations function only through the agency of others
    (see Oliner v Mid-Town Promoters, 2 NY2d 63), the defendants failed to
    make a prima facie showing that the license did not encompass the
    plaintiff, as well as its principal, Robert M. Chiarello. Since the
    defendants failed to establish their prima facie entitlement to judgment
    as a matter of law, it is unnecessary to address the sufficiency of the
    plaintiff's opposition papers (see Alvarez v Prospect Hosp., 68 NY2d 320,
    324; Allstate Ins. Co. v Persampire, 45 AD3d 706, 707).

    The defendants' remaining contentions are without merit.

    DILLON, J.P., FLORIO, BALKIN and ROMAN, JJ., concur.
    Page 1



    --------------------------------------------------------------------------------

    Copyright © 2010 Loislaw.com, Inc. All Rights Reserved

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  11. Thank you for your website and speaking out. I, too, am in the legal profession, and I was astonished to know that I'm not alone. When researching "John Bradford", see comment under August 8, 2010, your website came up. I paid Mr. Bradford in cash up front for home improvement/contracting services that he was to have performed back in July, 2010. To date, he has not performed the services that I contracted him for, nor has he returned my money, despite many requests. He no longer is in Huntington, but now resides on Ramona Drive in East Meadow, New York. I confirmed this by speaking with his neighbors. I filed a complaint with the Office of Consumer Affairs after I read the blogs. How he can continue to "swindle" trusting citizens like myself out of money after being already charged with "Operating a Home Improvement Business without a License" is beyond me. Where is the justice in the legal system??? Again, thank you for speaking out. I will sleep better tonight knowing that I am not alone.

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  12. Thank you for your comment.

    Yes, even attorneys fall prey to scams, etc. and daily I get email solicitations, etc. Of course, as an attorney, you know what remedies you can pursue, your chances of success, etc. and, as an attorney, you probably know that not everyone wrong can be righted.

    Best of luck.

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  13. Someone anonymously sent the following comment, however, because names are involved, I redacted them. Here is the comment:

    "You should look into the storm chasing guys at XXXXX. they came from XXXX and paid XXXXX owner huge money to use his name and deceive our community. look at this website XXXXX.com then go to XXXXX.com if you look at the top of their site on the header for the XXXXXX website it still says XXXXXX on it..these guys are the shadiest of shady not only are they unlicensed but theyre using deceptive sales practices."

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  14. "Recently, I was consulted on this issue. An attorney was representing an unlicensed contractor who did not get paid; yet, the owner, knew the contractor was not licensed. The attorney wanted to know if the unlicensed contractor had any remedy for payment. I gave the attorney this recent case which basically sums up the issue:"


    Dear Mr. Probstein:

    I am posting this comment in response to your above comment as legal counsel to Quick Start Construction and in reference to your misconstruction of the Appellate Division, Second Dept. decision in Quick Start Construction v. Staiger. This matter did not involve a claim of an unlicensed contractor being able to collect money as you incorrectly "sum up." In rejecting the homeowner Defendants' claims and denying their Motion for Summary Judgment and Dismissal, the Appellate Division found that the Defendants' failed to prove that Quick Start Construction was unlicensed by virtue of its principal obtaining the license through Suffolk County Consumer Affairs for his company Quick Start Construction without assignment of the license as Defendants' claimed. Both its principal and Quick Start Construction are licensed Home Impovement Contractors in accordance with the Suffolk County Department of Consumer Affairs and such agency supports that contention. Therefore, you have incorrectly interpreted this decision and are alluding to the conclusion that Quick Start is not licensed, when in fact the company and its principal have followed and completed all proper procedures for licensing in the County of Suffolk as per the Department of Consumer Affairs, have been licensed for almost 20 years and have now defeated a claim that the company was not licensed.

    With reference to the initial issue, I do know of a case wherein an attorney homeowner, knowing the contractor was not licensed, contracted for work and services and then refused to make payment because the contractor was unlicensed, all knowingly and intentionally. The Court ruled in the homeowner's favor because an unlicensed contractor cannot collect for work and services performed. While I do not have the specific cite, that matter is certainly different from the facts of Quick Start v. Staiger.

    As a current customer of Quick Start Construction has now questioned the licensing of the company due to the misinformation contained herein, we would appreciate better care being taken with respect to the interpretation of legal authority so as to not mislead the reading public. We have no belief that it was your purposeful intention to do so. Certainly unlicensed and renegade contractors are a threat to homeowners and your attention to this cause should not go without recognition, however those contractors who meet all licensing procedures and engage in honest good faith business should not be misbranded as such.

    Thanks for your time and attention.

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  15. Thank you for your comment.

    Yes, I agree that the case states exactly what you stated and I reposted the case in it's entirety.

    I imagine that one could see that there is an implication that the case states that your client was unlicensed in that the court merely denied summary judgment on behalf of the homeowner and did not address "the sufficiency of the
    plaintiff's opposition papers".

    I posted the case as it was the most recent case at that time that addressed the issue of licensed versus unlicensed contarctors and the procedures that are involved when a contractor seeks payment, whether unlicensed or not.

    I can understand the confusion as the court stated that:

    "The defendants alleged in conclusory fashion that the license was issued to Chiarello, not to the plaintiff, and that, as
    such, the plaintiff was unlicensed and unable to recover any unpaid sums from them. Since corporations function only through the agency of others (see Oliner v Mid-Town Promoters, 2 NY2d 63), the defendants failed to make a prima facie showing that the license did not encompass the plaintiff, as well as its principal, Robert M. Chiarello."

    I do have the time right now to research this but it would be helpful if you, as you are legal counsel, can post the case or statute that does hold that a corporation is a licensed contractor if the principal is licensed as agent so that those who read this post (and I am quite surprised as to how many do) will put this issue to rest.

    I understand how internet searches can be misleading. I did not intend that post to be misleading to any of your clients' current or potential customers. Unfortunately, litigations can result in public decisions which do not tell the whole story. Perhaps you might want to post how the case was eventually resolved?

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  16. Mr. Probstein,

    Thank you for posting our comment with respect to Quick Start Construction and we appreciate your response as well. Currently, the case is scheduled for trial.

    The Courts have relied upon authority with respect to this isse on Ben Krupinski Builder and Associates, Inc. v. Baum, 36 A.D.3d 843 (2nd Dept. 2007). This is certainly not a cut and dry or clear area of the law with respect to the bright line rule that an unlicensed contractor cannot collect.

    In Ben Krupinski, apparently the principals of the Plaintiff corporate contractors had been licensed by the Town of Southampton, however their corporations had not. In reversing the order of the Supreme Court, this Court found that:

    “plaintiff raised a triable issue of fact [as to whether it was licensed] by submitting an affidavit of the Chairman of the Licensing Review Board of the Town of Southampton, who stated that the Plaintiff was in fact lawfully licensed because its principals held licenses to perform home improvement work in the Town.”
    -Ben Krupinski Builder and Associates v. Baum, 36 A.D.3d 843, 844 (2nd Dept. 2007).

    I think the Courts have recognized the possibility of disproportionate forfeiture of contractor claims when those contractors have relied upon Consumer Affairs or other body as the licensing entity and their prescribed licensing procedures. Consumer Affairs requires individuals to obtain licensing for their companies for a multitude of reasons, most importantly being that a corporation cannot take the required licensing exams, and the agency wants to have an individual to address any violations with. However upon licensing, Consumer Affairs inquires whether those individuals intend to operate through a company or corporation, and places the name of the company on the license to indiciate the company's licensing. This may be slightly at odds with the prescribed procedure set forth in the Suffolk County Code 345 which calls for a formal assignment, an endorsement on the license and payment of a $25.00 fee, however Courts are seemingly defering to agency interpretation and procedure in licensing corporations.

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  17. Thank you for that post.

    I read the Krupinski case after I read your post.

    I imagine that it may be in the contractor corporation's best interest to have the license also in the name of the corporation. I would assume that if unlicensed employees are used on the job but supervised by the licensed prinicpal, this unlicensed issue would not be raised. But I wonder if this would also apply if the corporation had the work performed by unlicensed subcontractors as independent contractors.

    Your input is greatly appreciated.

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  18. Technically, a contractor cannot hire unlicensed independent contractors, he can only hire employees, which he must retain direction, supervision and control over as well as full contractual responsibility of the work. In practice however, general contractors often hire unlicensed independent contractors for a specific job or task and consider them working under the general contractor's license. This is a bit of a gray area. Interesting how a corporation would supervise, direct and control the work, I guess this would go back to the finding that a corporation functions through the agency of others, and if the corporate principal directs the work I would think this would be deemed sufficient. It becomes a factual inquiry for whether or not the general contractor properly or actually supervised the work and the degree to which they did.

    This creates another issue, can an unlicensed subcontractor collect from a general contractor for work performed? Is he an employee or an unlicensed contractor? Technically, it is illegal for a general to hire an unlicensed sub, but this gray area seemingly at least in practice permits them to hire unlicensed subs under the "employee" tag. Generally, both parties have somewhat unclean hands so it would best be resolved without court intervention.

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  19. Thank you for that last post.

    The IC or EE issue can also be an issue with IRS, WC, and DOL for UI purposes (hope you understand the abbreviations), especially when unlicensed, uninsured, etc.

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  20. Here is my story
    We bought a house in Boston Ma. when we had the inspection we were told by our inspector that the guy probaly does not have any permits to rehab the house. I spoke with my realtor and she told me to call inspectional services, I did. A stop work order was put on the house. I called inspectional services about 2 times a week to follow up on the permits. I got a call from my realtor telling me that I should stop calling the inspector, the inspector said he would do his job if I stop calling and that the contractor was mad that I was calling. About 2 months later she called me and said that electrical passed inspection, I ask how many more she said plumbing, About 1 mth later she called and stated that we are all set to go. We closed. Our first winter the pipe in one bathroom froze. I called the builder he came and fixed it. I got suspicious because after talking to people I found out that a liscenced plumbing would know that you cannot have pipe on the outside wall in newEngland. I called inpectional services, Now we have to gut the entire house and have everything inspected.
    The thing is once the contractor sells the house he is out of the loop with inspectionals services. The owner now has to fix the problems and then go after the contractor which is a dead on arrival thought unless we change these laws and hold the offender liable. Please help me put these criminals behind bars. Unless we have stiff punishments these things will go on. There are too many of us going through these things. Please go to "change.org" and type in "shoddy contractors" and sign my petition.

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  21. To Anonymous in Boston, MA:

    Thank you for your comment.

    This highlights the importance of having a final home inspection the day of closing and how, in some circumstances, this may mean hiring an independent home inspector to once again inspect the home. Also, buyers sometime forget that the realtor is the agent of the seller not the buyer.

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  22. How would the home inspector know that the home is not inspected for plumbing and electrical? all he does is insert certain instrument in the outlets and that he did. I find it outrageous that a "contractor" can commit a crime and not be punished for it. Every other crimes has avenues for punishment. Try finding some place to report these crimes after they are committed. This is absoultley ridiculous.
    This should not happen. Where do you report a contractor who does work without a permit, and is not liscence to do electrial, plumbing and building.The difference here is we did not hire the person, we bought the house and found that out after we were told by our realtor that everything was up to code.

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  23. To Anonymous in Boston, MA:

    The closing in practice in MA may be different than it is in NY. Usually, I recommend a final inspection by the home inspector and a title company will insure that all CofOs and permits were properly obtained. Also, I might have requested that certain representations survive the closing.

    I would suggest that you consult with local counsel as to your possible civil remedies. As to criminal actions, here in NY, I have seen local prosecutors go after unlicensed contractors but I am in NY only and have no knowledge of MA practices.

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  24. I had my realtor he had his realtor, I ask her specifically who are you working for, she said it was for me. If there the builder was not licenced can I request all of my money back.son

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  25. To Anonymous in Boston, MA:

    Again, I would suggest that you consult with local counsel as to your possible civil remedies.

    Best of luck.

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  26. so do you think we can get legislation in place to stop these practices? What do you think needs to be done? I

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  27. To Anonymous:

    1. Regarding legislation: that is an answer that, in my view, is best approached by politicians rather than attorneys.

    2. Regarding what can be done in the meanwhile: the old phrase "caveat emptor" applies. Also, homeowners should take the time to investigate, supervise, double check, etc. that all issues that have arisen before the closing have been resolved prior to the closing - I know that many are in a rush to close but again...caveat emptor.

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  28. As a follow up on this discussion, I would also like to refer homeowners in NY and perhaps other states to the following articles (of course, I am not endorsing any particular LPE):

    http://www.pbs.org/hometime/house/contract.htm

    http://www.heimer.com/pe/consultations.html

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  29. Shouldn't the DA's office be able to go after a person who has commited such a crime?. Just on the basis of criminal conduct? it is illegal to do professional work with the liscense right? so why is is so hard for the attrney general to go after the guy. I know I have to consult legal councel for my self, but shouldn't the attorney general go after the guy for such Egregious acts.

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  30. The issue of whether criminal action is taken is discussed in one of the above posts.

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  31. Someone posted the following comment and I redacted a name:

    "I had a "home Warranty" that covered my air conditioning unit. The home warranty company hired XXXXX, who told them that a licence was not required in Suffolk County to work on my A/C. They believed him and hired him to replace the unit under warranty. He totally messed up the job, and destroyed part of the supporting beam in my attic. and I have estimates of upwards of $5,000 to make it right. The Warranty company has washed their hands of it. XXXXX was apparently one of the ones mentioned in your blog as an unlicensed contractor and under indictment. Do I have any recourse? Suffolk County Consumer Affairs told be basically too bad, I should not have hired an unlicensed contractor.
    By Anonymous on UNLICENSED HOME CONTRACTORS at 10:14 AM"

    In this situation, I would suggest that the home warranty agreement be reviewed by an attorney and that an action in Small Claims Court be considered against both the contractor and the warranty company ($5000 is the limit in Small Claims) as per the following link:

    http://www.nycourts.gov/courts/10jd/suffolk/dist/smallclaimsbook.shtml#WHO_CAN_USE_SMALL_CLAIMS

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  32. I have a dilemma, and no $ to contact or retain an attorney. Long story as short as possible, I contacted a Sewer and Septic company to do work. They gave me the name and phone number to call who, in the end I signed a contract with under a different co. name. Thinking I was dealing with the company I first called, and got the name from, I signed for $3800. Only after we had problems with our septic field, did we realize we weren't dealing with one co., but two, who just happen to be brothers operating under different business name. The septic field is a mess, the contract work was not done, and we are now faced with dealing with the county in making brand new changes to our field, and tearing out some of the existing things these people did to our field, which were done without permit, against code. Do I have legal recourse with the company who I first contacted, who sent the person out that I signed the contract with? The first company supplied the machinery, labor, and the owner was on my property bringing materials. He was well aware of what was going on, although his name nor company are written down nowhere, and he says the only recourse I have is to sue just his brother, name on contract.He admittedly took money from the job, and holds his brothers records for the other company in his office.
    I'd greatly appreciate help!

    ReplyDelete
  33. To Anonymous:

    In this situation, you may want to consider having all contracts reviewed by an attorney and that an action in Small Claims Court be considered against both companies ($5000 is the limit in Small Claims) as per the following link:

    http://www.nycourts.gov/courts/10jd/suffolk/dist/smallclaimsbook.shtml#WHO_CAN_USE_SMALL_CLAIMS

    ReplyDelete
  34. Great article about Home Addition Contractors. I really like your blog very much and also share this article with my friends. Good Job keep it up

    ReplyDelete
  35. Are consumers liable in any way for hiring an unlicensed contractor, either knowingly or unknowingly? (Suffolk County). This blog is informative. Thanks!

    ReplyDelete
  36. To "Are consumers liable for....":

    This situation may arise if the work performed by the unlicensed contractor caused injury or damage to a third party. If the homeowner or tenant is a condo, co-op, HOA, there may be alleged contractual breaches. Other situations may also exist that create potential liability.

    ReplyDelete
  37. What statutory section in the Nassau Code permits the homeowner to avoid having to pay an unlicensed contractor? Just curious.

    Angelo, Roslyn, NY

    ReplyDelete
  38. To Angelo:

    See ENKO CONSTRUCTION CORP. v. ARONSHTEIN. 89 A.D.3d 676 (2d Dept. 2011):

    http://www.courts.state.ny.us/courts/ad2/calendar/webcal/decisions/2011/D32743.pdf

    ReplyDelete
  39. Hi my post will be from the guy that needs to apply for a license in nassau county. now to do so it will take me 8 to 10 weeks in order to know if I'm approve. in mean time i cant work in the only field i work my entire life. Home improvement.

    After file my paper work for a llc (takes 4 weeks)
    need to get EIN takes 2 weeks, then Sales tax id another 2 weeks, then Ny EIN another week.

    After all this, buy a liability insurance, workings comp. bank account

    And i have to do all this and wait to see if im approve

    How do i pay my bills. i cant tell the grocery store wait im waiting for my license. I have lots of contacts that ask for work, what should i say, hire some on else, lose a job.

    like i said ive being working in home improvement all my life and i have a lot of skills.

    ReplyDelete
  40. To Gaston:

    This is a common business issue for all professionals who are awaiting their license, whether it be for home improvement, teaching, doctor, lawyer, etc.

    ReplyDelete
  41. My brother is trying to do electrical work as anon-licensed and non-insured electrician. He will be working for a friend that is licensed and insured, but will not be on the various job sites. I told him not to do it; what are the penalties? I am trying very hard to dissuade him from making a big mistake?

    Thanks for any feedback.

    ReplyDelete
  42. To Matthew:

    Depending on jurisdiction, penalties vary from criminal to civil. See discussions above.

    ReplyDelete
  43. What about the good faith, licensed contractor who tries to collect an unpaid balance from a deadbeat homeowner? After the contractor's attorney put the homeowner on notice that they were going to be sued for the balance, the homeowner made a retailitory complaint with the Nassau County Office of Consumer Affairs, 2.5 years after the work was performed. Can the OCA get involved in a dispute over an unpaid balance? And can the contractor sue for malicious prosecution and retaliatory action against the homeowner? Thanks for your opinion!

    ReplyDelete
  44. To Anonymous:

    Disputes over fees due is a common business issue for all professionals, whether it be for home improvement, teaching, doctor, lawyer, etc. Without going into specifics, I would probably advise a client in your situation to just seek your fee in court or move on.

    ReplyDelete
  45. I recently purchased a home from a "flipper" who regularly engages similar transactions. Soon after we took possession of the home it was evident that all the improvements we paid for were done poorly (recklessly and negligently) and have caused us significant financial losses. We basically paid for a renovated house than now have to pay to re-renovate to fix almost everything. Hindsight being 20/20 we should have ensured all the work was done by licensed contractors but we thought thats what our engineers and lawyers were for. Which party(s) should we look to to try to recoup some of this money?

    ReplyDelete
  46. To JR:

    I would suggest that you have a different attorney review your housing inspection report, contract of sale, closing documents, etc. and ascertain if relief is available.

    ReplyDelete
  47. Thank you very much for your informative answers. I would like to ask a question if possible. If my contractor wasn't licensed (unbeknownst to me) for the signing of our contract and for the first 3 months of a 12 month job can I win the D.C.A. (NY) charges that I have brought against him. I filed a complaint because contractor installed my roof incorrectly and I had to pay a new company to fix it. DCA is filing 14 separate charges one being "failure to clearly display his license number" (he included a registration number in the contract). The reason I pose this question is because during our mediation hearing, the DCA mediator stated to the contractor could be subject to fines if we don't come to an agreement, his attorney then stated that "well he wasn't licensed at the time". Just trying to understand why he would make this statement and how it could affect my case. I cannot afford an attorney.

    ReplyDelete
  48. To Anonymous:

    While the DCA may seek and/or collect fines for violations, that is different than a litigation instituted by you against the contractor for damages.

    If you cannot afford an attorney, consider small claims court or pursuing the matter pro se if your damages are higher.

    However, in both cases, obtaining judgments/fines is easier than collecting on them.

    ReplyDelete
  49. I was sued by a contractor two years ago and the case is still open. In deposition in came to light that the contractor was unlicensed. I assume this is grounds for dismissal given what i have read here. Can I recover legal costs to defend their lawsuit as well as the amounts paid to the contractor for their labor? I don't believe I can recover material costs.

    ReplyDelete
  50. Hi:

    As a general rule, attorney fees are, in NY state courts, recoverable only under certain circumstances.

    ReplyDelete
  51. wonderful work! the way you discuss the subject i'm very impressed. i'll bookmark this webpage and be back more often to see more updates from you.

    ayumi
    www.brfe.net

    ReplyDelete
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    ReplyDelete
  53. Hey I operated as an unlicensed yet did more than the contracted scope believing this woman would be honor our agreement and she hasn't. Now im stuck for several thousand and shes complaining i violated the contract because she added the work. She paid me via credit and didn't even pay the full contacted amount. Is there anyway i can sue for damages. Also this woman has several dozen violations she had me assess while there i want to contact the department of building as the place is a fire hazard by having exposed electrical wiring around water and there is a horrible infestation of black mold which has had tenant and family coughing for months. What should i do?

    ReplyDelete
    Replies
    1. Hello:

      Most recently in NASSAU SUFFOLK LUMBER & SUPPLY CORP. v. Muldoon, 2016 NY Slip Op 51242 - NY: Appellate Term, 2nd Dept. 2016, the court stated:

      "Plaintiff commenced this action to recover the principal sum of $4,500 for work, labor, services and materials furnished to defendant, relating to the installation of windows at defendant's home. After a nonjury trial, the District Court dismissed the complaint on the ground that plaintiff had failed to establish that it was a licensed home improvement contractor.

      General Business Law § 770 (6) defines a home improvement contract as an agreement which "includes all labor, services and materials to be furnished by the home improvement contractor" (see also Code of Suffolk County § 563-16). Code of Suffolk County § 563-17 (A) makes it "unlawful for any person to engage in any business as a home improvement contractor without obtaining a license therefor from the office [of the Department of Consumer Affairs]." It is well settled that "an unlicensed contractor forfeits the right to recover damages based either on breach of contract or quantum meruit" (Quick Start Constr. Corp. v Staigers, 77 AD3d 900, 900 [2010] [citations omitted]; see B & F Bldg. Corp. v Liebig, 76 NY2d 689 [1990]; Richards Conditioning Corp. v Bleet, 21 NY2d 895 [1968]; Golfo v Sopher, 253 AD2d 479 [1998]). As plaintiff failed to establish at trial that it was a licensed home improvement contractor (see Quick Start Const. Corp., 77 AD3d at 900), the District Court properly dismissed the complaint."

      Delete
  54. URGENT Question for the Board:

    Is there any law in NY that forbids my insurer from obtaining Estimates from unlicensed professional engineers or unlicensed contractors and paying me only the damages based on those false estimates, false engineering reports? I see plenty about unlicensed engineering, but is there something that explicitly forbids it to insurers, not punishes? I am dealing with a sinister insurer who refuses to budge to logic or law. They say that is the engineers problem, not mine.

    ReplyDelete
  55. Hello:

    Of course, you might want to consider retaining council who specializes in insurance law as this would, in my view, be a breach of the policy. You may also want to consider filing a complaint with the Department of Financial Services. See http://www.dfs.ny.gov/consumer/fileacomplaint.htm

    ReplyDelete