[J]ust six U.S. states don’t regulate residential building contractors in any way, and Vermont is one of them. Builders and state officials are working to change that and create the state’s first contractor registration process.
Right now, if a contractor disappears with a deposit, performs low-quality work or doesn’t finish a job, the homeowner’s recourse is a complaint to the Attorney General’s Office or small claims court. The AG’s consumer complaint division received nearly 600 complaints detailing losses of $3.1 million between 2012 and 2017.
A registration process would enable the state to ensure that contractors hold liability insurance and have created a written agreement with the client, said Ward Smyth, the owner of Turtle Creek Builders in Waitsfield and former president of the Vermont Home Builders and Remodelers Association.
“I want to see the industry bettered,” said Smyth, who has been working on the issue of contractor registration through the homebuilders association for 13 years.
Smyth came up with a registration process through the association, but when the recession hit in 2008, that effort foundered. The latest statewide conversation about contractor registration started last year, when the Senate Government Operations Committee asked the Vermont Office of Professional Regulation to study the issue of regulating home-improvement and construction contractors.
“During the past couple years there have been a number of serious complaints about this group,” the Senate committee said in its letter to the then-head of OPR, Colin Benjamin. “Most are related to financial concerns but many could rise to the level of safety.”
The OPR’s resulting report, released early this year, found that only Vermont, New Hampshire, Maine, Oklahoma, Wisconsin and South Dakota don’t regulate residential contractors. The rest of the states use licensing, registration or certification, the report said. Twelve states require a background check, and 14 require contractors to enroll in continuing education.
In Vermont, anyone can claim to be a building contractor, and it’s up to the homeowner to determine if the person is qualified to perform the work. In simpler times, that worked out better, said Jim Bradley of Hayward Design Build, the incoming president of the homebuilders’ group who is working with Smyth on registration. But nowadays contractors need more expertise, Bradley said.
New technology in materials can cause huge problems, for example with moisture and mold, if applied improperly, Bradley said.
“An understanding of fundamental building science is crucial,” said Bradley. “How does the building perform as a system? That’s where we see breakdown.”
Under a proposal from the Office of Professional Regulation, registration would cost around $75 or $100, said Bradley. It wouldn’t include any continuing education or certification, only information about the company and its insurance. Registrants would also have to state they had a contract with their client to perform work, although they wouldn’t have to show the contract, said Smyth and Bradley.
“We’re by default making sure we have up-to-date information and staying current,” Bradley said. He added that there would be information about building certifications on the homebuilder association’s website so that homeowners can find contractors with the certifications in areas they seek.
“It will be impetus to cause other contractors who are new to the registry with no certifications to say, ‘I better go out and get that,’” Bradley said. “It will improve the performance of the product they are producing.”
The OPR has taken testimony on the proposal. Many in the industry support the idea.
Kate Stephenson, the co-owner of HELM Construction Solutions in Brattleboro and Montpelier, said a strong registration system would level the playing field for legitimate contractors. HELM performs consulting services for builders in Vermont and out of state.
“Right now, you have a situation where folks who are doing everything by the books are trying to compete with the guy with a truck who maybe doesn’t have insurance, is paying employees under the table,” Stephenson said. “It’s hard for legitimate businesses to compete in that environment.”
Middlesex builder Mike Pelchar said he was surprised anyone would hire a builder without a written estimate.
“But I don’t think everyone thinks of all the things they need to do when hiring someone,” said Pelchar. “So I personally think it’s a good idea.”
Some members of the homebuilders’ association are concerned about regulatory overreach. Others, like Stephenson, say a voluntary program doesn’t go far enough.
“What’s the enforcement mechanism?” Stephenson said. “Having a voluntary registration system doesn’t feel all that useful to me.”
The Vermont Associated General Contractors, the commercial building trade group, will be watching to make sure the conversation about registration doesn’t take a turn toward more regulation for its members, said Matt Musgrave, head of government relations for the Vermont AGC.
“I don’t see us coming out in massive opposition,” said Musgrave. Some AGC members are homebuilders. “What we don’t want to see is this becoming some slippery slope. We don’t necessarily want to see it spill over into general contracting as well.”
Musgrave noted that contractors are already registered with the Tax Department.
“The challenge we see is the bad actors are still going to be the bad actors,” he said. “People figure ways around the law. If someone throws a magnet on the side of the car and decides to go replace a bathroom, who is going to know if they registered or not?”
