New York City has promulgated regulations relating to home improvement contractors, the purpose of which are presumably to protect consumers against contractors’ deceptive and fraudulent practices. However, the requirements go beyond such a prohibition and impose a number of precise requirements with which all home improvement contractors must comply. Home improvement is broadly defined under the law as “the construction, repair, replacement, remodeling, alteration, conversion, rehabilitation, renovation, modernization, improvement, or addition to any land or building, or that portion thereof which is used or designed to be used as a residence or dwelling place and shall include but not be limited to the construction, erection, replacement, or improvement of driveways, swimming pools, terraces, patios, landscaping, fences, porches, garages, fallout shelters, basements, and other improvements to structures or upon land which is adjacent to a dwelling house.” Home improvement does include the construction performed with respect to a new home or building.
One such requirement is that all contractors need to be licensed in order to solicit, sell or perform home improvement services. Where a contractor performs home improvement services without a proper license, he may be deemed guilty of a misdemeanor and subject to imprisonment of not more than one year and/or a penalty not to exceed $1,000.00. Furthermore, a contractor who is not licensed to engage in home improvement services may also be precluded from recovering monies due and owing by a homeowner under a contract. In other words, if a homeowner does not pay, you can’t sue for unpaid monies. In New York City, the public policy underlying the license requirement is so strong that some courts have even precluded an unlicensed contractor from recovering under quasi-contract theories such as quantum meruit. In other words, contractors may as demonstrated in Nemard Construction Corp. v. Deafeamkpor not even be able to recover the reasonable value of the services they provided if they fail to comply with the licensing requirement.
In addition, where a violation of the New York City’s administrative regulations is found, the Commissioner of the Division of Consumer affairs may order the contractor to pay the owner treble damages.
Aside from the requirements that all contractors be licensed, the regulations also prohibit home improvement contractors from engaging in certain acts, including without limitation (a) deviating from the plans or specifications or terms of the contract without the written consent of the homeowner; (b) making a substantial misrepresentation or false promise to induce a homeowner to enter into the contract; or (c) making false statements in connection with advertising their services. Moreover, the regulations further require that a contractor provide written notice to the homeowner that he may cancel the contract at any time prior to midnight of the third night after either the contract was executed or such notice was provided, whichever is later. Again, where a contractor engages in any such prohibited acts, he may be deemed guilty of a misdemeanor and subject to imprisonment of not more than one year or a penalty not to exceed $1,000.00.
In addition to the New York City administrative regulations governing home improvement contractors, there are statutes in New York that also govern home improvement contractors. Specifically, the home improvement contractor must be registered in the municipality where the work is performed. As demonstrated in Price v. Close, a contractor is precluded from recovering unpaid monies from an owner because he is unlicensed. The definition of a home improvement is identical to the definition set forth in the New York City regulations.
Furthermore, New York also requires contracts that exceed the cost of $500.00 to be in writing and signed by both parties. In addition, the contract must be legible and in plain language and clearly describe the other documents that are to be incorporated into the contract. The contractor must provide the owner with a copy of the written contract before any of the work is performed. New York also requires that the contract contain certain information including
(i) the name, address, telephone number and license number of the contractor;
(ii) the estimated dates when the work will begin and be substantially completed;
(iii) the contingencies that would materially change the approximate completion date;
(iv) a description of the work to be done, the materials to be provided to the owner and the agreed upon consideration for the work and materials.
In addition, the New York statute governing home improvement contracts also requires that certain notices be provided in clear conspicuous bold face type notifying the owner, among other things, that he has three business days to cancel the contract. The statute sets out the specific language of these notices.
© 2008 Nissenbaum Law Group, LLC