2008 Home Construction Workgroup Draft Recommendations

October 2008

The 2008 Home Construction Workgroup has determined that the current registration requirements for residential contractors are inadequate to protect consumer homeowners. The workgroup recommends:

Establishing a certification requirement for the five areas of greatest potential home damage (roofing, siding, framing, foundation and doors/windows), along with enhanced contractor registration.

Creating an ombudsman’s office within the Attorney General’s Office to receive consumer complaints, provide consumer education, and in the future provide an alternative dispute resolution mechanism for lower cost consumer/ contractor disputes.

Requiring some residential construction warranties for homeowners with a narrow statute of limitation. These recommendations are outlined in more detail below.

Contractor Certification and Enhanced Registration

1. A certification requirement would be instituted for the five subcontractor specialties with the greatest potential for home damage: roofing, siding, foundation, framing and windows/doors.

• A state agency would direct the certification program and investigate compliance.
• Certification in one of the subspecialties would require training regarding best industry practices.
• The training curriculum would be developed and approved by the State Building Code Council. The State Board for Community and Technical Colleges may be consulted regarding implementation of the curriculum.
• This requirement would be phased in over three years.
• Training would take place in person. No online training would be permitted.
• Training would be conducted by experts in the field.
• Classes would be self-supporting.
• Contractors with many employees in the five designated areas would be able to offer in-house training to meet the requirements, provided the training was approved by the State Building Code Council.
• Specialty contractors not working in these five areas would be exempt from certification at this time.
• Certification would only be required for residential home contractors working on single-family dwellings, duplexes, triplexes and four-plexes, not for commercial or condominium contractors.
• Certification would be required of the individual, not the company.
• The general contractor would be responsible for hiring certified workers in the five specialties.
• The oversight agency would determine penalties for contractors hiring non-certified workers in the five specialty areas.

2. The certification would need to be updated periodically (for example—every 4 years).

3. The certification would require continuing education in actual construction techniques, not business practices.

4. Registration requirements would be enhanced for greater consumer protection, including: increasing bonds, requiring background checks, reporting of education/training, providing financial information and claim history, and disclosing of past LLC/corporate names and licenses and their claim histories (consistent with HB 1843).

Ombudsman’s Office

1. An Ombudsman’s Office for home construction would be created within the Office of the Attorney General.

2. The Ombudsman’s Office would be the central repository for all complaints made in Washington against contractors. Consumers would be able to phone or post contractor complaints online. The office would record all consumer complaints and post them to a website. Complaints regarding failure to use certified contractors in the five specialty areas would be referred to the oversight agency.

3. The office would develop a consumer rights brochure outlining the consumer’s rights and remedies. Residential contractors would be required to attach the brochure to every residential construction contract.

4. The Ombudsman’s Office would provide consumer education, including information on how to contract for services and contractor best practices.

5. The Attorney General’s Office would develop request legislation regarding how it would resolve consumer complaints in a timely and cost-effective manner. The legislation would consider limiting the dollar amount for claims that the office can handle or the types of claims that it would adjudicate.

6. The Ombudsman’s Office could be funded by a slight increase in construction permit fees.

7. The oversight agency and the Ombudsman’s Office would be required to report back to the appropriate committee(s) of the Legislature within five years regarding the success of the programs.

Legal Remedies

1. The implied warranty of habitability would be non-waivable.

2. Three non-waivable warranties for residential home construction would be included in statute: that the construction was suitable for ordinary use, that it was free from defective materials, and that it was constructed in accordance with sound engineering and industry practices. These warranties would only apply to the five identified specialty areas of greatest concern: roofing, siding, framing, foundation and doors/windows.

3. The three non-waivable warranties would have a two-year statute of limitations, from the date of possession by a new homeowner or from the date of substantial completion for a remodel. There would be no discovery rule.

4. Mediation would not be mandatory.

5. Arbitration would be mandatory for claims at $50,000 and below. The cost would be shared equally between the parties. Either party can request a trial de novo. If the side requesting the trial de novo does not improve its position, that party would be required to pay the attorney fees for the other party. Nothing would prevent the parties from settling before going to trial.