The Arizona Republic
Jul. 19, 2005 12:00 AM
Payouts for poor or incomplete construction work by licensed contractors hit a record $5.14 million in fiscal year 2005.
The payouts increased for the second year in a row because of record construction activity, increased claim limits and public awareness of the Arizona Registrar of Contractors' Residential Contractors Recovery Fund.
"More work is being done. This is the No. 1 new-home market in the country, and the market is booming," said Israel Torres, director of the Registrar of Contractors.
"There's more complaints, and there is more shoddy work."
Licensed contractors pay into the fund. When a homeowner complains to the registrar about shoddy workmanship or an unfinished job and the registrar deems the complaint valid, the homeowner is reimbursed up to $30,000.
Complaints against licensed contractors for workmanship and incomplete work increased 9.1 percent to 9,903 in fiscal 2005, which ended June 30.
The agency now regulates 52,242 licenses, up 3.1 percent from fiscal 2004.
Payouts from the recovery fund are limited to $200,000 per license, up from $100,000 in 2002.
The largest drain on the fund this year came from a bankrupt Tucson custom-home builder, which continues to hold a current commercial license.
Payouts from complaints about David J. Baird Design and Building Inc. in Tucson hit the maximum $200,000 in October. Baird declined to comment.
His attorney, Michael McGrath, said Baird ran a successful custom-home company that built about 25 to 30 homes annually. Baird then decided to expand but was short on capital to take on a larger volume of homes. That led to his bankruptcy reorganization.
"It was a sad ending for a very successful guy," McGrath said, adding that that Baird is not using the commercial license.
"He might be able to use it, but he is not using it," McGrath said. "He's not doing any building at all."
The registrar is barred from revoking the second license because of the bankruptcy, said the registrar's assistant director, Marie Levie.
"Taking action on their license is the same as a creditor trying to make (the debtor) pay," she said.
The shortcoming in the system is why consumers should check all licenses held by the contractor before hiring someone, she said.
The top 10 payouts were worth nearly $1.35 million.
Meanwhile, unlicensed contracting continued to be targeted. The agency conducted several stings statewide in which 255 violations were issued for unlicensed contracting. Undercover operations netted 17 criminal citations in Bullhead City and 11 criminal and civil citations in Prescott. Complaints about unlicensed contracting activities generated by consumers and other contractors increased 14.1 percent to 2,303.
Contractors must have a license for work that exceeds $750 or requires a building permit. However, it isn't against the law for consumers to hire an unlicensed contractor.
http://www.azcentral.com/arizonarepublic/business/articles/0719recoveryfund19.html
The payouts increased for the second year in a row because of record construction activity, increased claim limits and public awareness of the Arizona Registrar of Contractors' Residential Contractors Recovery Fund.
"More work is being done. This is the No. 1 new-home market in the country, and the market is booming," said Israel Torres, director of the Registrar of Contractors.
"There's more complaints, and there is more shoddy work."
Licensed contractors pay into the fund. When a homeowner complains to the registrar about shoddy workmanship or an unfinished job and the registrar deems the complaint valid, the homeowner is reimbursed up to $30,000.
Complaints against licensed contractors for workmanship and incomplete work increased 9.1 percent to 9,903 in fiscal 2005, which ended June 30.
The agency now regulates 52,242 licenses, up 3.1 percent from fiscal 2004.
Payouts from the recovery fund are limited to $200,000 per license, up from $100,000 in 2002.
The largest drain on the fund this year came from a bankrupt Tucson custom-home builder, which continues to hold a current commercial license.
Payouts from complaints about David J. Baird Design and Building Inc. in Tucson hit the maximum $200,000 in October. Baird declined to comment.
His attorney, Michael McGrath, said Baird ran a successful custom-home company that built about 25 to 30 homes annually. Baird then decided to expand but was short on capital to take on a larger volume of homes. That led to his bankruptcy reorganization.
"It was a sad ending for a very successful guy," McGrath said, adding that that Baird is not using the commercial license.
"He might be able to use it, but he is not using it," McGrath said. "He's not doing any building at all."
The registrar is barred from revoking the second license because of the bankruptcy, said the registrar's assistant director, Marie Levie.
"Taking action on their license is the same as a creditor trying to make (the debtor) pay," she said.
The shortcoming in the system is why consumers should check all licenses held by the contractor before hiring someone, she said.
The top 10 payouts were worth nearly $1.35 million.
Meanwhile, unlicensed contracting continued to be targeted. The agency conducted several stings statewide in which 255 violations were issued for unlicensed contracting. Undercover operations netted 17 criminal citations in Bullhead City and 11 criminal and civil citations in Prescott. Complaints about unlicensed contracting activities generated by consumers and other contractors increased 14.1 percent to 2,303.
Contractors must have a license for work that exceeds $750 or requires a building permit. However, it isn't against the law for consumers to hire an unlicensed contractor.
http://www.azcentral.com/arizonarepublic/business/articles/0719recoveryfund19.html
