by Don Keelan
The good news is that the legislation referred to as H.157 did not make it over the finish line last month before the Vermont General Assembly had adjourned. The bill, which passed the House, would have required construction contractors who work on residential projects over $2,500 to register with the State of Vermont’s Office of Professional Regulation by April 2022.
The bad news is that this poorly conceived legislation will be back in front of the Legislature later this month or next year. While there are some positive aspects to the bill, most of the 12-page document will play havoc on a segment of the Vermont economy already in deep trouble.
The motivation behind H.157, “an act relating to the registration of construction contractors,” is to create a master list of contractors, outline building codes and safety, adjudicate complaints, and inform fraud and training updates.
And, of course, no legislation is complete if it failed to mention how it would impact the Global Warming Solutions Act. Therefore, the registered contractors will have to enforce any residential thermal heating standards update.
But here is the real rub with this bill. Let’s start with how many of those Vermonters engaged in small residential projects are sole proprietors. Many are not incorporated. Many are over 50 years old (a real issue in Vermont). All will be required to fill out an application with the VOPR.
Such an application requires that one state that they are not in arrears with their taxes with the Vermont Department of Taxes (sales, payroll, and income taxes). Completing this question honestly will eliminate many contractors. The next question, are you behind in child-support or judgments–guess what?
The bill specifically requires that the contractor has an active workmen’s compensation policy, risk, and liability insurance–not unreasonable–but, again, guess what?
Assuming that the contractor can make it through the registration process, any work to be done for a customer over $1,000 will require a written contract “prior to receiving a deposit or commencing residential construction work.”
What I know about Vermont law is that a written contract is a legal document with only attorneys authorized to prepare such a document. Now, required under H.157 Section 5509, (b) there must be a written contract. And what if the customer just wants to do the transaction with a handshake?
And under Section 5510, (c) “failure to enter into a written contract when required by this chapter” will constitute unprofessional conduct, and (the contractor) may be disciplined by VOPR. God help us and those who drive around in a pick-up truck with a steel toolbox in the back.
The legislation adds two more bodies to the VOPR whose compensation will come from the biennial registration fee of $50 for an individual contractor and $200 for a business. The VOPR will consider offering special certifications at a later date, and additional fees may be generated. With thousands of projects being carried out around the State, one wonders how this will be enforced?
Misrepresentation and outright fraud are not absent from the residential construction industry and have caused serious harm to homeowners. However, this legislation misses two essential areas: it should require that all deposits placed with a contractor (over $1,000) be either escrowed until the work commences or, if used to buy materials, write a joint check to the contractor and supplier.
The legislation calls for the contract to include a materials description. This is vague and the cause of many disputes. What should be noted is a detailed material list with specifications. For example, if it is a pipe for wastewater, is it plastic, copper, or ductile iron, and what diameter?
Vermont needs thousands of housing units as noted by the Secretary of the Agency of Commerce and Community Development (5,000 units by 2024), the Department of Corrections (scores of apartments), and the Coalition for the Homeless (hundreds of homes), and in addition, 120,000 weatherization projects in ten years.
We need training schools for potential construction workers, not more bureaucracy.
The author is an Arlington resident and retired CPA.