18VAC50-22 Board for Contractors Regulations  

  • REGULATIONS
    Vol. 30 Iss. 5 - November 04, 2013

    TITLE 18. PROFESSIONAL AND OCCUPATIONAL LICENSING
    BOARD FOR CONTRACTORS
    Chapter 22
    Proposed Regulation

    Title of Regulation: 18VAC50-22. Board for Contractors Regulations (amending 18VAC50-22-260).

    Statutory Authority: §§ 54.1-201 and 54.1-1102 of the Code of Virginia.

    Public Hearing Information:

    December 2, 2013 - 10 a.m. - Department of Professional and Occupational Regulation, Perimeter Center, 9960 Mayland Drive, Board Room 4, Richmond, VA 23233

    Public Comment Deadline: January 3, 2014.

    Agency Contact: Eric L. Olson, Executive Director, Board for Contractors, 9960 Mayland Drive, Suite 400, Richmond, VA 23233, telephone (804) 367-2785, FAX (804) 527-4401, or email contractors@dpor.virginia.gov.

    Basis: Section 54.1-1102 of the Code of Virginia provides the authority for the Board for Contractors to promulgate regulations for the licensure of contractors in the Commonwealth.

    Purpose: The proposed amendments address board concerns to increase consumer awareness about the existence of the Virginia Contractor Transaction Recovery Fund. Amending these regulations offers an extra layer of protection to the health, safety, and welfare of the general public. Also, the intent of the planned regulatory action is to review the existing regulations and propose amendments to empower the board to take disciplinary action against licensees who fail to comply with such amendments.

    Substance: 18VAC50-22-260 outlines the board's prohibited acts, which includes contract provision requirements. The proposed amendments will expand the terms of the written contract requirements for residential contracting specified within the board's regulations.

    Issues: The change includes a requirement that language be added to all residential contracts notifying consumers of the existence of the Virginia Contractor Transaction Recovery Fund and adds information on how to contact the board for claim information. This change is advantageous to the consumer as it provides pertinent information regarding a level of protection, currently in the statutes, but often not known to consumers. The addition of contact information gives direction to consumers, who can then contact Virginia Contractor Transaction Recovery Fund staff for assistance in filing a claim or in determining eligibility.

    In amending the regulations, the Board for Contractors is continuing to provide necessary public protection tasked to them through existing statutes. The proposed amendment will increase consumer awareness about the existence of the Virginia Contractor Transaction Recovery Fund and offer an extra layer of protection to the health, safety, and welfare of the general public.

    Department of Planning and Budget's Economic Impact Analysis:

    Summary of the Proposed Amendments to Regulation. The Board of Contractors (Board) proposes to amend its regulations to require that a statement notifying consumers of the existence of the Virginia Contractor Transaction Recovery Fund that includes information on how to contact the Board for claim information be included in all written contracts for residential contracting services.

    Result of Analysis. Benefits likely outweigh costs for this proposed regulatory change.

    Estimated Economic Impact. Current regulations include a list of nine specific elements that must be in each written contract for residential contractor projects. The Board proposes to amend this list to also require contractors to include a statement informing consumers of the existence of the Virginia Contractor Transaction Recovery Fund and how to contact the Board for claim information. Board staff reports that this recovery fund is a fund that contractors customers can apply to for reimbursement of monies paid to contractors for work that the contractors then utterly failed to do or does so inadequately that their customers find it necessary to try and recover their money.

    Board staff reports that the claims against the recovery fund are a last resort solution for customers after they have sought relief in civil court and have tried to recover their money directly from their contractor through, for example, filing liens. Only after other possible solutions have been exhausted would individuals then be able to apply to this recovery fund to get their money back (up to the statutory limit of $20,000). The recovery fund is funded through monies collected from contractors upon initial licensure ($25) and when licensure is renewed ($50 biennially). Since 2003, 1,390 claims have been filed against the recovery fund and $14,408,062 has been paid out (average claim of $10,365.51). Board staff also reports that the Board can get back some or all of the money from claims if the claimant later is able to recover money directly from their contractor.

    Adding the proposed required language to written contracts may cost contractors a likely small amount initially to reprint existing contracts with the added required language or to print an addendum that includes the required language. This should be a onetime cost, however, and would not be expected to be ongoing once the language is part of their base contract. Contracting customers will benefit from the additional disclosure of existence of the recovery fund and their right to access it.

    Businesses and Entities Affected. Board staff reports that, as of February 1, 2013, there are 65,274 contractors that have either a Class A, B or C license in the Commonwealth and that the overwhelming majority of contractors qualify as small businesses. All of these individuals, plus their customers, will likely be affected by this proposed regulatory change.

    Localities Particularly Affected. No localities will be particularly affected by these proposed regulations.

    Projected Impact on Employment. This proposed regulatory action is unlikely to have any effect on employment in the Commonwealth.

    Effects on the Use and Value of Private Property. The use and value of private property is unlikely to be affected by this proposed regulatory change.

    Small Businesses: Costs and Other Effects. Affected small businesses may incur some small additional printing costs initially on account of this regulatory change but are unlikely to incur any recurring costs.

    Small Businesses: Alternative Method that Minimizes Adverse Impact. There are likely no alternative methods that would both further minimize any adverse impact and meet the Boards goal of better informing contracting customers of the recovery fund and their right to access it.

    Real Estate Development Costs. This regulatory action is unlikely to affect real estate development costs in the Commonwealth.

    Legal Mandate. The Department of Planning and Budget (DPB) has analyzed the economic impact of this proposed regulation in accordance with § 2.2-4007.04 of the Administrative Process Act and Executive Order Number 14 (10). Section 2.2-4007.04 requires that such economic impact analyses include, but need not be limited to, a determination of the public benefit, the projected number of businesses or other entities to whom the regulation would apply, the identity of any localities and types of businesses or other entities particularly affected, the projected number of persons and employment positions to be affected, the projected costs to affected businesses or entities to implement or comply with the regulation, and the impact on the use and value of private property. Further, if the proposed regulation has an adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include (i) an identification and estimate of the number of small businesses subject to the regulation; (ii) the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the regulation, including the type of professional skills necessary for preparing required reports and other documents; (iii) a statement of the probable effect of the regulation on affected small businesses; and (iv) a description of any less intrusive or less costly alternative methods of achieving the purpose of the regulation. The analysis presented above represents DPB's best estimate of these economic impacts.

    Agency's Response to Economic Impact Analysis: The Board for Contractors concurs with the economic impact analysis conducted by the Department of Planning and Budget.

    Summary:

    The proposed amendment requires language to be added to all written contracts for residential contracting services that (i) notifies consumers of the existence of the Virginia Contractor Transaction Recovery Fund and (ii) includes information on how to contact the Board for Contractors for claim information.

    18VAC50-22-260. Filing of charges; prohibited acts.

    A. All complaints against contractors may be filed with the Department of Professional and Occupational Regulation at any time during business hours, pursuant to § 54.1-1114 of the Code of Virginia.

    B. The following are prohibited acts:

    1. Failure in any material way to comply with provisions of Chapter 1 (§ 54.1-100 et seq.) or Chapter 11 (§ 54.1-1100 et seq.) of Title 54.1 of the Code of Virginia or the regulations of the board.

    2. Furnishing substantially inaccurate or incomplete information to the board in obtaining, renewing, reinstating, or maintaining a license.

    3. Failure of the responsible management, designated employee, or qualified individual to report to the board, in writing, the suspension or revocation of a contractor license by another state or conviction in a court of competent jurisdiction of a building code violation.

    4. Publishing or causing to be published any advertisement relating to contracting which contains an assertion, representation, or statement of fact that is false, deceptive, or misleading.

    5. Negligence and/or incompetence in the practice of contracting.

    6. Misconduct in the practice of contracting.

    7. A finding of improper or dishonest conduct in the practice of contracting by a court of competent jurisdiction or by the board.

    8. Failure of all those who engage in residential contracting, excluding subcontractors to the contracting parties and those who engage in routine maintenance or service contracts, to make use of a legible written contract clearly specifying the terms and conditions of the work to be performed. For the purposes of this chapter, residential contracting means construction, removal, repair, or improvements to single-family or multiple-family residential buildings, including accessory-use structures as defined in § 54.1-1100 of the Code of Virginia. Prior to commencement of work or acceptance of payments, the contract shall be signed by both the consumer and the licensee or his agent.

    9. Failure of those engaged in residential contracting as defined in this chapter to comply with the terms of a written contract which contains the following minimum requirements:

    a. When work is to begin and the estimated completion date;

    b. A statement of the total cost of the contract and the amounts and schedule for progress payments including a specific statement on the amount of the down payment;

    c. A listing of specified materials and work to be performed, which is specifically requested by the consumer;

    d. A "plain-language" exculpatory clause concerning events beyond the control of the contractor and a statement explaining that delays caused by such events do not constitute abandonment and are not included in calculating time frames for payment or performance;

    e. A statement of assurance that the contractor will comply with all local requirements for building permits, inspections, and zoning;

    f. Disclosure of the cancellation rights of the parties;

    g. For contracts resulting from a door-to-door solicitation, a signed acknowledgment by the consumer that he has been provided with and read the Department of Professional and Occupational Regulation statement of protection available to him through the Board for Contractors;

    h. Contractor's name, address, license number, class of license, and classifications or specialty services; and

    i. Statement A statement providing that any modification to the contract, which changes the cost, materials, work to be performed, or estimated completion date, must be in writing and signed by all parties.; and

    j. A statement notifying consumers of the existence of the Virginia Contractor Transaction Recovery Fund that includes information on how to contact the board for claim information.

    10. Failure to make prompt delivery to the consumer before commencement of work of a fully executed copy of the contract as described in subdivisions 8 and 9 of this subsection for construction or contracting work.

    11. Failure of the contractor to maintain for a period of five years from the date of contract a complete and legible copy of all documents relating to that contract, including, but not limited to, the contract and any addenda or change orders.

    12. Refusing or failing, upon request, to produce to the board, or any of its agents, any document, book, record, or copy of it in the licensee's possession concerning a transaction covered by this chapter or for which the licensee is required to maintain records.

    13. Failing to respond to an agent of the board or providing false, misleading or incomplete information to an investigator seeking information in the investigation of a complaint filed with the board against the contractor. Failing or refusing to claim certified mail sent to the licensee's address of record shall constitute a violation of this regulation.

    14. Abandonment defined as the unjustified cessation of work under the contract for a period of 30 days or more.

    15. The intentional and unjustified failure to complete work contracted for and/or to comply with the terms in the contract.

    16. The retention or misapplication of funds paid, for which work is either not performed or performed only in part.

    17. Making any misrepresentation or making a false promise that might influence, persuade, or induce.

    18. Assisting another to violate any provision of Chapter 1 (§ 54.1-100 et seq.) or Chapter 11 (§ 54.1-1100 et seq.) of Title 54.1 of the Code of Virginia, or this chapter; or combining or conspiring with or acting as agent, partner, or associate for another.

    19. Allowing a firm's license to be used by another.

    20. Acting as or being an ostensible licensee for undisclosed persons who do or will control or direct, directly or indirectly, the operations of the licensee's business.

    21. Action by the firm, responsible management as defined in this chapter, designated employee or qualified individual to offer, give, or promise anything of value or benefit to any federal, state, or local employee for the purpose of influencing that employee to circumvent, in the performance of his duties, any federal, state, or local law, regulation, or ordinance governing the construction industry.

    22. Where the firm, responsible management as defined in this chapter, designated employee or qualified individual has been convicted or found guilty, after initial licensure, regardless of adjudication, in any jurisdiction, of any felony or of any misdemeanor, there being no appeal pending therefrom or the time of appeal having elapsed. Any plea of guilty or nolo contendere shall be considered a conviction for the purposes of this subdivision. The record of a conviction received from a court shall be accepted as prima facie evidence of a conviction or finding of guilt.

    23. Failure to inform the board in writing, within 30 days, that the firm, a member of responsible management as defined in this chapter, its designated employee, or its qualified individual has pleaded guilty or nolo contendere or was convicted and found guilty of any felony or of a Class 1 misdemeanor or any misdemeanor conviction for activities carried out while engaged in the practice of contracting.

    24. Having been disciplined by any county, city, town, or any state or federal governing body including action by the Virginia Department of Health, which action shall be reviewed by the board before it takes any disciplinary action of its own.

    25. Failure to abate a violation of the Virginia Uniform Statewide Building Code, as amended.

    26. Failure of a contractor to comply with the notification requirements of the Virginia Underground Utility Prevention Act, Chapter 10.3 (§ 56-265.14 et seq.) of Title 56 of the Code of Virginia (Miss Utility).

    27. Practicing in a classification, specialty service, or class of license for which the contractor is not licensed.

    28. Failure to satisfy any judgments.

    29. Contracting with an unlicensed or improperly licensed contractor or subcontractor in the delivery of contracting services.

    30. Failure to honor the terms and conditions of a warranty.

    31. Failure to obtain written change orders, which are signed by both the consumer and the licensee or his agent, to an already existing contract.

    32. Failure to ensure that supervision, as defined in this chapter, is provided to all helpers and laborers assisting licensed tradesman.

    33. Failure to obtain a building permit or applicable inspection, where required.

    VA.R. Doc. No. R13-3390; Filed October 15, 2013, 3:36 p.m.

Document Information

Rules:
18VAC50-22-260