Thursday, October 15, 2015

Bucks lawmaker: Unregistered home contractors could face felony charges

Posted: Sunday, October 11, 2015
Sen. Tommy Tomlinson



On paper, John Chmielinski looked like a legitimate home-improvement contractor.
His company was registered with the Pennsylvania Attorney General’s Office, which requires contractors to carry a minimum of $50,000 insurance coverage. His registration stated he had no prior civil judgments against him, no related criminal convictions and no bankruptcy filings.

But the 46-year-old Trenton man lied about his professional past, including a New Jersey conviction for failing to register as a contractor and more than $20,000 in prior civil judgments there. He also canceled his insurance coverage without notifying Pennsylvania.
None of that information surfaced, though, until after Chmielinski was arrested for ripping off three Bucks County homeowners for more than $22,000. He recently pleaded guilty to home improvement-related criminal charges in Bucks County Court and was sentenced to two to four years in prison.
Under the current law regulating more than 66,000 home-improvement contractors in the state, lying on a registration — or not registering at all — isn’t a crime. One Bucks County lawmakers wants that changed.
“Now, we’re letting them slip through the cracks,” said Sen. Tommy Tomlinson, R-8, who introduced the Home Improvement Consumer Protection Act, which took effect in 2009.
This week, Tomlinson said he plans to introduce proposed legislation in the Consumer Protection and Professional Licensure Committee he chairs that would add new criminal and civil penalties against contractors who violate the law. The draft amendment already has 10 cosponsors, including Montgomery County Sen. Stewart Greenleaf.
The amendment would make it a third-degree felony for a contractor to enter into a home-improvement agreement for more than $2,000 without first registering with the state. If the contact is for less than $2,000, the charge would be a first-degree misdemeanor.
The amendment would also give the Attorney General Office’s Bureau of Consumer Protection new power to refuse, suspend or revoke a registration if it can prove the applicant obtained it through fraud, deception, misrepresentation or otherwise violating the home-improvement contractor law, according to the draft legislation.
The AG could reject or revoke a registration for individuals convicted of a crime involving theft, deception, fraud, misrepresentation or “moral turpitude,” as well as for gross negligence, incompetence or professional misconduct. Contractors with a suspended or revoked license in another state for similar reasons also couldn't register in Pennsylvania.
Tomlinson cited Calkins Media's two-part series — "Building a Case"— with raising awareness of the law’s shortfalls and leading to his proposed amendment. The series, which ran in March, examined how lax enforcement and legal loopholes has led to slow justice for Pennsylvanians who allege home improvement fraud.
Chmielinski 
“We must continue to protect homeowners and the hardworking home-improvement business owners from unscrupulous contractors who seek to skate around the law and rob homeowners of their biggest investment,” Tomlinson said. “We think this is a very important tweak that will make the law stronger.”
The amendment is designed to close loopholes in the 2009 law that requires state registration for contractors who perform at least $5,000 worth of work annually. It also established new regulations, contract requirements, civil and criminal penalties for home-improvement crimes, as well as created an online public database of registered contractors and their information.
So far this year, at least five home-improvement contractors in Bucks County have been accuse of ripping off homeowners. Four of the accused had state registrations at one time, according to the state registry.
Over the last six years, at least two Bucks County contractors with theft and fraud convictions continued working in home repair and construction with valid state registrations — until they were arrested a second time for home-improvement fraud.
While contractors are required to provide business information, the AG’s office doesn't routinely check its accuracy unless a complaint is filed. Contractors caught lying on registrations — or failing to register — face fines of up to $1,000 to $3,000 per violation, but no criminal penalties under the current law.
The law also doesn’t keep contractors convicted of home-improvement crimes off the registry without a court order to do so. Court-barred contractors can petition to be reinstated to the registry after five years, according to the AG.
Following complaints of lax enforcement, the attorney general last year created a new consumer regulatory compliance unit: the Pennsylvania Bureau of Consumer Protection. The office pursues civil actions, such as fines and restitution agreements, against contractors when a complaint doesn’t meet the threshold for criminal prosecution. Criminal offenses are handled at the county court level.
The Legislature also adopted the first updates to the original law, such as adding a 30-day window for contractors to provide changes in registration information, including phone numbers, addresses, civil judgments, or insurance coverage, or face fines. Previously, information updates were done when registrations were renewed every two years.
During the biennial renewal period that ended in September, 21, 305 contractors applied to renew registrations and were subject to the new update requirement, AG spokeswoman Sadie Martin said. Others may have updated information as well, but the agency’s database doesn’t track those changes, she added.
The AG’s office recently has cracked down on contractors, mediating 3,149 consumer complaints, opening 143 investigations and filing 37 legal actions. The Bureau of Consumer Protection also initiated its first-ever undercover sting operations targeting unregistered and non-compliant contractors. The sting resulted in the filing of 25 legal actions and the assessment of more than $25,000 in restitution and civil penalties.
Tomlinson said the initial purpose behind the law was to register contractors so if a complaint was made there was a way to find the individuals. But he didn’t anticipate contractors would use false or incomplete information to circumvent the law.
“Obviously that was a miscalculation,” he said.
He added that his office is discussing other potential updates, including whether to require municipal zoning and building offices to check contractor registrations before issuing building permits and the feasibility of creating a fund to help victims of crooked contractors.
Bucks County’s Director of Consumer Protection Michael Bannon believes Tomlinson’s amendment would give the law much needed teeth.
“It’s been very frustrating. While the law has certainly helped us, some of those issues have come up with contractors. This really needed to be tweaked and I think this is good the direction we’re headed in now,” Bannon said. “People will have more faith in the law.”
Peter Gallagher, president of the Pennsylvania Builders’ Association, declined to comment on the proposed amendment until it was introduced. But he said the lack of enforcement of the current law has been a disappointment for contractors who follow it.
“We believe in doing things the right way,” Gallagher said. “Builders are frustrated when our members follow the rules and there is no enforcement of those who do not. When this happens, it puts our members at an unfair disadvantage.”

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