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Condo Co-Op Help Line: Home Improvement Contracts Revisited

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Mann Report Management - March 2018

By: Carol Sigmond

When condominium unit owners or cooperative shareholders opt to have renovations or other construction work performed in apartments, the salesmen and contractors must have home improvement licenses issued by the New York City Department of Consumer Affairs. Cooperative and condominium boards should be insisting that any contractor working in the building for a unit owner have such a license.

Under the New York City Home Improvement Business Law, anyone who undertakes to solicit or perform any home improvement or "owns, operates, maintains, conducts, controls, or transacts" a home improvement business must be licensed by the New York City Department of Consumer Affairs. In this context, condominium and cooperative apartments are considered homes as commercially rented apartments.

Other licensed parties or trades such as plumbers, electricians, architects, engineers, or alarm installers are not subject to the New York City Home Improvement Business Law, as each of them is subject to a different regulatory program.

In order to obtain a license either to solicit home improvement projects or to perform home improvement contracts, the applicant must take and pass a test. Applicants also undergo a criminal record check, pay a license fee, post a bond, or contribute to a trust fund for restitution to consumers. In addition, successful applicants are supposed to provide proof of insurance. Licensed home improvement contractors are required to provide written estimates and contracts to customers with the option to cancel the contract with no penalty within three days. The contracts are required to be fair to the homeowner and fairly inform them of the cost and scope of the proposed work. A standard form of agreement is available at: www1.nyc.gov.

Licensed home improvement contractors have the full scope of remedies available for non-payment, including access to the courts and use of notices of mechanic's liens. Unlicensed home improvement contractors have access to neither the courts or use of notices of mechanic's liens, which means they cannot sue homeowners. Homeowners may sue them, but because the homeowners who deal with unlicensed parties do not have access to the Department of Consumers Trust Fund, recovery from unlicensed home improvement contractors is unlikely. If an unlicensed home improvement contractor liens your building, based on work in an individual apartment, having the lien removed is a simple matter of making an application to the court.

From the perspective of a board of managers or a board of directors, requiring licensed home improvement contractors reduces the likelihood of work done in the building that is contrary to code. Licensed home improvement contractors know that doing non-compliant work could cost them their license. Licensed home improvement contractors have also been tested on safety, which should reduce the likelihood of construction accidents in the building. Finally, licensed home improvement contractors usually have a real business, so they tend to be more responsible and responsive and are more likely to have insurance, Certainly, as a board member, you cannot be criticized for insisting that the home improvement contractors working your building are licensed.

With regard to insurance offered by any contractor working in your building, do not simply rely on certificates, Ask for a policy face sheet so that you know the policy really exists and that it applies in New York. Many contractors, including licensed home improvement contractors working in New York but based in New Jersey, have insurance that is good in New Jersey, but not in New York, Always verify that the policy exists and verify that the coverage includes New York workers compensation, property, and general liability.

This column presents a general discussion. This column is not intended to provide legal advice. You should consult your attorney for specific legal advice.

This article was originally published by Mann Report: Management. You can access the article on their website.