Archive for the ‘Licensing’ Category

Louisiana Home Improvement Contractors License Requirements

English: Larose, LA, September 7, 2008 -- Loca...

Larose, LA, September 7, 2008 — (Photo credit: Wikipedia)

The Louisiana State Licensing Board for Contractors (LSLBC) is a very useful place for Louisiana contractors. I was recently reading up on the requirements for home improvement contractors. The LSLBC is a one stop shop for all things related to contractor licensing. It is a good place for both contractors and consumers. Contractors can find out information on commercial, residential, home improvement and mold remediation.

Qualifications for Home Improvement License

All home improvement contracts over five thousand dollars and up to seventy-five thousand dollars need to be in writing. In order to be considered a Home Improvement Contractor you must register with the LSLBC. The application is located at this link. This application is less formal than the Residential Contractor license application. The process is also more relaxed. Further, there is no test.

The contractor who is applying for the Home Improvement license needs to provide general liability insurance and show that the contractor or the registering entity is registered with the Louisiana Department of Revenue.

Of course there are fees associated with this filing but that is very expected. The LSLBC will deliver the certificate of registration to the applicant who has been approved. These certificates are non-transferable.

Persons Who Do Not Need the Home Improvement License

Generally there are persons and entities who do not need the protection of a Home Improvement License. If a homeowner physically performs work on his personal residence then he does not need to get this license, no matter the cost. This does not mean that the homeowner does not need to abide by local permitting rules and regulations.

A contractor can perform work without the Home Improvement license if the home improvement work has a “value” of less than seven thousand five hundred dollars ($7,500). Many times contractors try to circumvent the licensing requirement by making contracts for $7,500 or less when the work is really more than that. The LSLBC rule states that the value to the home must be less than $7,500. This is an objective standard.

Of course other contractors who have a better license do not need this one, such as commercial and residential contractors.

Other Aspects to Consider

Contractors who are getting licensed for the first time should consider contacting an attorney so that they can get protective language put in invoices, and properly drafted contracts. It is always smart to properly form an entity such as and Limited Liability Company (LLC) to protect personal assets. Other helpful documents include demand letters, lien waivers and filing of liens when payment is not received. Companies such as zlien.com are very good with helping contractors manage notice and lien compliance.

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Home Improvement Contracting – Things Have Changed

Louisiana State Senate Chamber

Louisiana State Senate Chamber (Photo credit: jimmywayne)

Often times, people ask why it is referred to as the “practice of law.” Quite simply, the answer is because the law is always changing. In May of this year, I wrote about potential changes that could impact the construction industry following the 2013 Session of the Louisiana Legislature. Suffice it to say, the legislature did not go out of its way to amaze the populace with any widespread change in any field (insert general cynicism here). In the past calendar year, though, it has done some things that are immediately relevant in the construction field. Importantly, with regards to home improvement contracting, things have changed.

Casting a Wider Net

Before a discussion on the changes to home improvement contracting, I would direct you to previously written articles on this blog home improvement contracting generally. In March 2012, Seth Smiley wrote a very succinct article, outlining the most important aspects of the home improvement contracting articles, found at Louisiana Revised Statutes 37:2175.1 – 2175.6. From this article, we see that one of the most important aspects of determining the applicability of the home improvement contracting provisions rests on the definition of home improvement contracting. Previously, La. R.S. 37:2175.1 stated:

[e]very agreement to perform home improvement contracting services, as defined by this Part, in an amount in excess of seventy five hundred dollars, but not in excess of seventy-five thousand dollarsshall be in writing…

Since then, things have changed. During the 2012 legislative session, the Governor signed Act 193, which expanded the range of home improvement contracting projects to include any project between one thousand five hundred dollars and seventy-five thousand dollars. This very tightly limited the amount of work a person could contract to do without needing to be registered as a home improvement contractor with the Louisiana State Licensing Board for Contractors (LSLBC). Compounded upon the price range limitation, is the incredibly broad definition of “home improvement contracting,” which according to La. R.S. 37:2150.1(7) means :

the reconstruction, alteration, renovation, repair, modernization, conversion, improvement, removal, or demolition, or the construction of an addition to any pre-existing owner occupied building which building is used or designed to be used as a residence of dwelling unit, or to structures which are adjacent to such residence or building.

Given the fact that the LSLBC is not one to define these terms with much specificity, it can be argued that almost any type of work or home repair you contracted to perform from August 2012 to the present time calls for a home improvement contractor certificate. If you do not already have one, now might be the time to consider speaking with an attorney or contacting the LSLBC.

Expanding the Exceptions

At the same time that the home improvement contracting statutes have been made more restrictive with regards to contracts to perform certain work, certain exceptions have recently been expanded upon to make it easier on the handy homeowner. As I discussed in my May article, Senate Bill 81 proposed to expand the rights of homeowners that wished to perform certain home improvement contracting services upon their own property. After some tweaking, this exception will not become the law, effective August 1, 2013, albeit in slightly different form. The idea of relaxing the requirements for homeowners prevailed, but in different language. The statute governing exceptions to the home improvement contracting part (La. R.S. 2175.5), will now read, in part:

A. The following persons are excepted from the provisions of this Part:

(2)(a) A homeowner who physically performs the home improvement work on his personal residence.

(b) An individual who physically performs home improvement work on other property owned by him when the home improvement work has a    value of less than seven thousand five hundred dollars.

Summary of Things Changed

Essentially, the following questions will need to be asked:

  • First, am I the person contracting to perform any of the type of work as defined by 37:2150.1(7)? If I am the person that will be performing that work, is the amount in writing and am I getting paid for it? If I am getting paid for it, is it more than $1,500 but less than $75,000? If it is, you need to be registered.
  • Second, am I the person that is performing the defined work? Is that work being performed on my person residence? If yes, I do not need to be registered. If not, is that work being performed on propert I own that is not my residence? If that is the case, is the work to be performed valued at more than $7,500? If it is, I need to be registered as a home improvement contractor.

Confusing? Hopefully not. As always, though, the safest thing to do is consult an attorney because, as practitioners of law, we necessarily need to keep ourselves, and our clients, updated in changes to the law. The above is a perfect illustration of that point.

 

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Posted in:     Construction News, Law Changes & Updates, Licensing, Louisiana, Regulations  /  Tags: , , ,   /   1 Comment

Louisiana State Licensing Board for Contractors (LSLBC)- Not To Be Taken Lightly

Senate Judiciary Committee Hearing

(Photo credit: Talk Radio News Service)

In recent weeks, I have seen a spike in the number of issues coming across my desk that directly involve the Louisiana State Licensing Board for Contractors (“LSLBC”). While every situation has its own idiosyncrasies, when you find yourself being called to appear before the LSLBC, chances are very good you have a licensing problem. Here at the Wolfe Law Group, we have posted about Louisiana licensing law numerous times and have counseled numerous clients regarding their particular license issue. However, we have not really gone beyond the procedural legalese and really explained why the LSLBC is not to be taken lightly.

What is the LSLBC?

For many contractors, the first experience they have with the LSLBC is when they receive a letter from the LSLBC notifying them of a hearing they must attend because they have been accused of violating one of the statutes under the LSLBC’s jurisdiction. I know, that statement is just full of things “legal.” However, it is essential to understanding what the LSLBC is and why it should be taken seriously.

The LSLBC is an arm of the state government. It is not a court. This explains why many people are a little surprised when they are called before the LSLBC for a “hearing.” Even though it is not a court, since it is an agency of the state, it has been granted all of the powers to regulate aspects of the construction industry in Louisiana. Most importantly, this includes the power to punish those who violate certain statutes, particularly with regard to licensing requirements. This was a point of concern for one client recently: if the LSLBC isn’t court, how can it have jurisdiction over my company and fine us? The simple answer: it has jurisdiction over your company because you did work in this state and this state says that it has jurisdiction over your company. It has been this way since 1956, when the legislature created the LSLBC as it exists today, along with all of the rules that the LSLBC is charged with enforcing. All of which can be found in Louisiana Revised Statute 37:2150 et seq.

Any person that performs construction work in the State of Louisiana is subject to these provisions, and any person or company that performs work in this state that is not licensed is subject to punishment. This is why it is so important for contractors (especially out-of-state contractors) to get licensed or certified before beginning work in Louisiana. If you do not, it is the LSLBC that will come calling.

Who is the LSLBC?

The ladies and gentlemen that make up the LSLBC generally have two things in common. First, they are appointed by the Governor to sit on the Board for terms up to six years. Second, they have experience working in the construction industry. These qualifications are important in understanding where the LSLBC is coming from when it exercises its agency powers. While ruminations regarding the appointed nature of a Board position are best reserved for other arenas of public discourse, it is incredibly important for contractors to understand that the LSLBC consists of people with actual construction experience. These are people that “know what you’re going through,” so to speak. They have an understanding of that difficult homeowner, or that fight to get paid. With the exception of two “at-large” positions, this experience is a requirement to sit on the LSLBC, which makes the system inherently more fair.

Of course, this is a difficult concept to explain to a person or business that is being accused, by the Board, of violating one of its rules. I would suggest, though, that it is better (and financially safer) to be governed by a group of colleagues from within your profession, as opposed to a group of people who are removed from, or unrelated to, the construction industry. The LSLBC will always be an institution that exists to safeguard the construction profession. While this will sometimes manifest itself in coming down hard on members of that profession, it will likely be a fair, educated, and even-handed determination. Regardless, though, while a good approach is to know who and what you are up against, a better approach is to avoid that confrontation.

I Have a Hearing – What Now?

Of course, the hope is that you will not be called before the LSLBC for any violation. Whether you are an in-state contractor or out-of-state contractor, hopefully you have already contacted an attorney to make sure your licenses and registrations are current, relevant and secured. If you haven’t – do so! This should avoid being called before the LSLBC for any licensing violation. Sometimes, though, it cannot be avoided (for example, when a homeowner files a complaint about workmanship). Regardless of the underlying complaint, should you find yourself holding that letter demanding your appearance, you should not hesitate in contacting an attorney. For one, the procedure during an LSLBC hearing is almost entirely different from what one would normally expects at a hearing.

You will be required to enter a “plea” before the proceedings begin (sounds like criminal court). You will be entitled to review the evidence compiled against you, but this review happens on the day you show up for the hearing. You might be questioned by an attorney for the Board, or be able to ask questions of the Board’s investigator. Sometimes you might be able to have a more informal discussion of your matter with the Board itself, or they might just see all the evidence and make a determination. Sometimes, you might not even need to show up if you  offer to settle the matter, in writing, beforehand. It is, however, almost a guarantee that you will be fined with at least the administrative fee of $500.00. To se a general outcome of 2012 cases, see here.

The moral of the story: agency hearings are a different kind of animal, which is more likely to throw people for a loop. Your best bet is to prepare yourself by preparing your best case. Even though the situation is more informal than a court proceeding, the question is the same: has there been a violation of some law. Who better to help navigate that course than a lawyer with experience in that field of law?

 

 

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Contractors Prepare: 2013 Hurricane Season

From his vantage point high above the earth in...

(Photo credit: Wikipedia)

Last week, the Office of the Attorney General issued a general letter from Attorney General Buddy Caldwell to the public regarding the 2013 hurricane season. Sometimes, for unfortunate reasons, this time of the year and leading into the late fall and early winter can see a spike in the need for contractors and subcontractors. More unfortunate still is that when we see this spike in demand, we sometimes read or hear about the negative, and instances of “contractor fraud.” Since Buddy has taken the time to inform the public about how to handle these situations, I thought it fitting to inform contractors how they can better prepare for the 2013 hurricane season, and avoid problems in their own right.

Keepin’ It Current

Louisiana has pretty strict guidelines for determining who is allowed to bid, contract and work on a project. The foundation of all that governs contractors in this state is the license. Long story short and in general: you need one (there are always exceptions, depending on the work being done). But I’m an attorney, so I can’t keep it that short. Whether you are an out-of-state contractor or an in-state contractor, in order to operate within the law, there are certain qualifications that must be met. One such necessity is being licensed by this state before even bidding on a project. In my experience, this isn’t usually a problem when people come to us here at the Wolfe Law Group. However, knowing that this license expires is just as important as knowing that you are licensed in the first place. As we enter into a potentially busy season, take the time to review your license. Is it a one-, two- or three-year license? When was it issued? Make sure you keep it current. Your license expires on the anniversary of the date on which it was originally issued. You only have 15 days from that expiration to renew your license without paying a penalty, or worse, being treated as a new applicant.

To all you new applicants out there: now is the time to begin the process of acquiring the proper licensing or registration if you have not already done so. As I said before, any hurricane season has the potential for a spike in business. However, acquiring a license isn’t a quick turnaround. Depending on your status, it could take anywhere from 4 to 10 weeks to get your license. During a time when competition could become rather fierce, this is a delay that could potentially kill your ability to turn a profit.

More important, though, is the need to avoid penalties, losses and lawsuits in the future. The last thing you want to do is go through the entire process and expense of completing a project to then have difficulties with the homeowner and you NOT be licensed. For example, if they decide to not pay you but you don’t have your license, you almost definitely do not have any lien rights under the Private Works Act. If they decide to report you and you don’t have a license, you risk exposure to civil and potentially criminal penalties. If they decide to sue you, well, you get the point. As we enter the 2013 hurricane season, the first item on your contractor preparedness checklist should be to make sure everything is current.

Keepin’ It Active

Less “do or die,” but in my opinion important, is maintaining an active status with the Secretary of State. You would be amazed at how many times a simple search on the Secretary of State’s website reveals that a company actively doing business in this state is actually listed as inactive or that its charter has been revoked by the Secretary. Why? Because people get sloppy. It takes almost no time and very little expense to maintain an active, good standing status with the State of Louisiana, yet people so often let this fall by the wayside. While it doesn’t necessarily impact one’s ability to work or provide services in the state, it could have ramifications if you’re sued by a disgruntled homeowner.

Remember, you are running a business. In so doing, there are certain guidelines and requirements that you need to follow depending on the type of business you are operating. Stay on top of it, or better still, have your lawyer stay on top of it for you. Let’s get back to that disgruntled homeowner from above. Say, the project is complete and, for whatever reason, they sue your company. You’re safe, though, personally right? Maybe. Have you been keeping up with those state requirements for your business? Have you been filing all the correct paperwork every year? Have you been maintaining your accounts correctly? Has your business been operating as a true business, or is it just a front for either yourself or another business? If you can’t answer yes to these questions, you have a problem and you might not be protected. An easy way to avoid this is to keep it active. Make sure you are consistently keeping records with the state and you consistently keep good records for your business. Don’t let the “business-y” end of your construction business lag, especially moving into a time when you could potentially become much busier than usual. If this isn’t your thing – hire that attorney to do it for you.

Keepin’ It Honest

The final note is just one of general good business practice. Keep it honest. When you start bidding and contracting, a lot of times you can avoid future headaches by just playing the game fairly. Of course, there will always be those difficult people you will encounter along the way. It’s amazing, though, how far someone can get (and how much trouble they can avoid) by developing an honest and trusting relationship with the people they are working with. Now is as good a time as any to make that a work mantra.

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Posted in:     Construction Contracts, Hurricane, Licensing, Regulations  /  Tags: , , , ,   /   1 Comment

In The Pipeline – Changes in Louisiana Construction Law

Louisiana State Capitol, Baton Rouge

Louisiana State Capitol, Baton Rouge (Photo credit: Wikipedia)

If there is any one constant in the legal profession, it is that the law is an ever-evolving, dynamic thing. While there are some general principles that tend to not change all that drastically over the years, the devil truly is in the details. Having to keep abreast of these changes is why you’ll hear people refer to the “practice” of law – we attorneys must continue to learn and adapt as we continue through our careers. Here at Wolfe Law Group, we make sure to have our ears to the ground in order to provide the most up-to-date information for our clients and their businesses. This legislative session, there are several proposed changes in Louisiana construction law, all of which may critically impact how contractors do business in this state. This post is the first of two parts discussing those changes.

 Proposed Changes to the Private Works Act

There are currently three bills in various stages of the legislative process that would significantly change how different parties secure their rights to payment. The first, Senate Bill 183, is the furthest along of the three, having successfully passed through the Senate and out of the House Committee on Civil Law and Procedure. It is the only bill this session, and the first bill since 1999, that seeks to amend La. R.S. 9:4802. This statute outlines which parties are entitled to assert claims for payment against an owner and a contractor. Should this bill become law (which is likely given the total lack of opposition in the Senate or in the House Committee), lessors of movables would be required to provide formal notice to contractors and owners within 10 days of their materials being used on a project, as opposed to simple delivery of a lease. This change might sound insignificant, but it is because of that very reason why it is important for us to keep our clients informed. Without paying proper attention to how the law evolves, current or potential clients might lose their ability to secure payment because they were unaware of this formalizing shift in the law.

The other two bills, House Bill 190 and House Bill 362, propose changes to La. R.S. 9:4822. This statute is arguably the most important in the Private Works Act because it outlines and defines the time and notice requirements that must be met in order for parties to secure their right to make a claim to secure payment. House Bill 190 has passed through the House and awaits a vote in the Senate Committee on the Judiciary. This bill proposes the least significant of changes, merely stating clearly that statements of claim and privilege need not have attached copies of unpaid invoices unless the statement specifically states they are attached. House Bill 362, however, would extend the time requirements for parties to file their claims by double. When notices of contract have been properly filed and you are one of the parties entitled to a privilege by La. R.S. 9:4802, you would have sixty (60) days to file your claim after the notice of termination, as opposed to the current thirty (30) day window. If you are a contractor that properly filed your notice of contract (if necessary), you would have one hundred twenty (120) days to file your claim following termination or substantial completion, instead of the current sixty (60) day window. These deadlines are extended throughout the statute: all 30 day limits are changed to 60 days, and all 60 days are changed to 120 days. The success of this bill has yet to be seen: unlike the others, it hasn’t even made it out of committee yet, and the session is fast coming to a close.

An Easing of Home Improvement Contracting Registration

Securing and maintaining the proper licensing and registration is incredibly important in the construction world here in Louisiana. The knowledge and expertise required in performing such work or providing these services is why it is always recommended that people seek out professional assistance, especially for work around the home. Surprisingly, and not necessarily wisely, Senate Bill 81 proposes to modify the status quo in relaxing registration requirement for home improvement contracting. Currently, no person shall undertake or perform or agree to perform home improvement contracting services unless they are registered with the Residential Building Contractors Subcommittee of the State Licensing Board for Contractors as a home improvement contractor. The proposed law (which unanimously passed the Senate and is scheduled for floor debate in the House on May 16th), adds the following exception to La. R.S. 37:2175.2:

No individual shall undertake on his own property self-performed home improvement contracting services having a value in excess of seven thousand five hundred dollars unless registered with and approved by the Residential Building Contractors Subcommittee of the State Licensing Board for Contractors as a home improvement contractor.

Basically, the legislature is trying to make it easier for a homeowner to perform certain work on his or her property without having to go through the necessary registration channels. While this might not be an issue for some, it is worrying that something as particularized as home construction may be continuing down a path of non-regulation. The true extent of this relaxation, of course, will remain to be seen.

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Posted in:     Construction News, Filing Requirements, Law Changes & Updates, Licensing, Louisiana, Mechanics Lien, Payment Requirements, Regulations  /    /   1 Comment