North country contractors who were fined for breaking state law on home improvement contracts said they could lose future customers because of a recent announcement suggesting they ripped people off.
But in reality, the contractors said, most of the three dozen businesses from Jefferson, Lewis and St. Lawrence counties cited this month by the state attorney generals office were guilty of only minor violations they didnt realize they had committed. That wasnt obvious to the public, however, because their names were lumped together in a list that didnt say what they were cited for or how much they were fined.
Local contractors were among 211 businesses statewide fined for a range of violations associated with Article 36-A of General Business Law. The violations ranged from failure to provide basic information on written contracts to failure to place homeowners money in separate bank accounts before projects were finished and failure to honor work agreements. Fines ranged from $300 to $1,500.
Contractors said the states announcement misled the public by suggesting they were engaged in dishonest business practices, but most said they werent aware of the rules they need to follow.
This spring, the attorney generals office requested contractors send three copies of written homeowner agreements to ensure they were accurate, said Rick J. Davidson, owner of Davidsons Painting in Clayton. He was surprised when his business received a letter ordering it to pay a $350 fine because of problems with its written homeowner contract. If fines werent paid, the letter said, the state threatened to investigate the businesss past six years of contracts for violations.
We didnt understand this law because it was new to us, Mr. Davidson said.
The business was directed to make minor revisions to its contract form and send it back, he said. It was told, for instance, to add a space for the time and date on the form. He also agreed to open an escrow account in which customers payments will be held until projects are completed.
But Mr. Davidson, who has owned his business for 22 years, was taken aback when the state announced the names of the contractors in violation. Hes already been questioned by several customers about the news.
We have a good track record of business, and they made us look like weve had awful contracts or never had written contracts, he said. A lot of contractors are now fuming. Every one of these guys have done good work, and none of them should be on this list. Next time they do something like this, they should not come out with such a bad portrayal of good contractors. And they made it look like they did a widespread investigation, but we were the ones who sent in the contracts.
The attorney generals office defended its decision to announce the violations, pointing out that contractors are responsible for knowing state law. But it declined to respond when asked why names were listed together without naming specific violations. The Times published the list Aug. 16.
When contractors fail to obey the law, too often consumers pay the price, Deputy Press Secretary Robert Middaugh said in an email. The attorney general will continue fighting to protect consumers hard-earned dollars and ensure that contractors are held accountable.
Another small business fined for not using a written homeowner contract to do business was JMS Mechanical Contractors, Ogdensburg. It never saw a need to develop an official contract because its policy is to accept payments from customers only after projects are finished, providing invoices to them at that time, owner Jeffrey M. Skelly said. His 27-year-old company has had only about $3,000 in uncollected customer payments over its lifetime, despite that policy.
Mr. Skelly fined $300 for not having an escrow account or written contract didnt know about the state law. He hired a lawyer to fight the action, but acquiesced after paying $2,000 in legal fees.
They should have sent us an information packet to make us aware of this. Then, there would have been no reason to investigate us in the first place, he said. Because we didnt want to plead guilty, they said they were going to ruin my company and fine us for tens of thousands. I shouldnt feel afraid of my government, but to pay $225 an hour for a lawyer to fight someone with unlimited resources is scary.
Mr. Skelly is now concerned hell lose future customers who may have read the states announcement. The 12-man company hired two employees this year because of its growing customer base, he said. But a slowdown in business he attributes to the states news release could make it challenging to keep them employed.
If Ive had 20 people whove read this news and will never call us because they havent had us work, jobs could be in jeopardy, Mr. Skelly said. The hardest part for us is to get into peoples doors and show them were different than other contractors.
Some of the state rules also werent known by Bernard M. Bertrand, owner of Bertrands Construction, Ogdensburg. He was cited because the businesss contract did not include a provision allowing homeowners to back out of a contract three days after signing, or a mechanics lien giving the business authority to pursue uncollected customer payments in court. The 62-year-old, who has owned the business for 32 years, also didnt have an escrow account in which to place advance payments from customers.
Mr. Bertrand, who paid a $300 fine, was pleased mistakes were corrected by the investigation. But he said violations could have been avoided easily if state guidelines were explained clearly to contractors.
I dont have time to spend a week on the computer to go over all of these regulations, he said. It seems like there is a better way they can communicate these rules. They could send us a postcard in the mail saying, Here are 10 things you can do to avoid violations. This was a money grab.
Watertown contractor Griffin Roofing paid a $300 fine because it failed to include a phone number and project-completion dates on contracts. Owner Gary L. Denesha said the states announcement should have included corresponding violations with names of businesses to avoid misleading the public. While some contractors intentionally abuse the system, he said, they cant be identified if specific violations arent made public. While Griffin Roofing isnt expecting to lose any current customers because of the announcement, he said, it could deter new customers.
We were cited for not having a phone number on the contract, but the news made it sound like some contractors were ripping customers off, Mr. Denesha said. Thats an entirely different ball game. We wouldnt have been here 85 years by ripping customers off.
No problems were found with the companys homeowner contract, Mr. Denesha said, which is prepared by Deluxe Printing to comply with state law. The business always has deposited customers payments in an escrow account before projects are completed, complying with state law.
Adirondack Valley Builders, Lowville, paid a $300 fine because it never developed an official homeowner agreement. Rhonda L. Campeau, who co-owns the business with her husband, Paul D., said the business specializes mainly in commercial projects and never saw the need to produce a homeowner contract. Mrs. Campeau, who created an official contract and opened a bank account to comply with state guidelines, is pleased those mistakes were corrected. But she said she thinks the states announcement misrepresented violations contractors were actually responsible for.
We deserved the fines, because we werent doing it the way were supposed to, Mrs. Campeau said. But we were upset by the news because it sounded like were victimizing people.