Veteran local builder finds out the hard way the price of not having contractor's license

Friday, July 13, 2007

HOLIDAY ISLAND -- Builders constructing spec houses in Arkansas without a contractor's license have been put on notice: get the license or pay a hefty fine.

Local builder F.T. Hamblin found this out the hard way when he reported to the Holiday Island Planning Commission (HIPC) Friday that he had been contacted by Arkansas State Licensing Investigator Burkett Wootton.

Wootton fined Hamblin 1.25 percent on a 1,396-square-foot spec house he is building at 47 Summit Drive. Hamblin has built houses in the area for years, but does not have a license.

"I thought everything was fine," he told the commission. "I remember when they changed the rules a few years ago and said you couldn't build three houses anymore, but you could build one a year."

He asked whether the Planning Commission could do anything on his behalf, as the commission issued the permit and did not inform him he was not legally able to build.

"Years ago they came in here and said you could build one," Chairman Joe Schuler remembered. "We'll have to look that up. We're just volunteers here. You acted in good faith. We'll do what we can, but I don't know that we'll be able to help."

In fact, Investigator Wootton came to the Planning Commission on Sept. 12, 2003, and informed them the new law had gone into effect July 16 that year. Basically, the change in the law, which pertains to residential licensing, stipulates that general contractors must be licensed to build even one home in Arkansas. Commercial contractors must always be licensed.

Property owners can act as their own general contractor and build one home per year, but they must live in the home.

In that case, Wootton said, the property owner must do all the jobs a general contractor would do: supervise subcontractors; schedule, purchase and supervise the handling of building supplies; and generally be on site during the construction of his or her home.

"Many people don't understand what's involved in being a general contractor," he said.

He said some unlicensed builders have tried to circumvent the law in the past by having the homeowner say he is the general contractor but really having a framer, who is considered a subcontractor and does not have to be licensed by the Arkansas Licensing Board, act in the capacity of general contractor.

"There's a problem with that," Wootton said, "if he says he's the framer but he's the one scheduling the subs. If the owner doesn't know how to build a house, he's not a contractor."

At that time, Wootton, whose territory includes Eureka Springs and Holiday Island, told the commission he has several ways of finding violators. Some cities send him lists of new building permits. He also reads newspaper stories on permits issued. Sometimes neighbors will turn people in.

And there are some licensed contractors who turn in unlicensed contractors, which may have been the case with Hamblin, said Building Inspector Morris Dillow.

Wootton said in 2003 he spends three days a week driving his territory.

Whether a contractor is licensed or not may have no bearing on the quality of his work. Dillow said he told Wootton that Hamblin's job was "up to standards and up to date." HIPC has noted in the past that Hamblin does excellent work.

Nevertheless, Wootton said in 2003 that getting a contractor's license from the state was not difficult or expensive, and the intent is to protect the homeowner from contractors who are unscrupulous.

Requirements for a license consist of furnishing proof of sufficient construction experience, taking a test on business and law, providing a compiled financial statement showing a positive net worth and paying a $100 licensing fee, with a $50 renewal fee each year.

In 2003, Chairman Joe Schuler said HIPC used to try to enforce licensing requirements and worker's compensation requirements, but it became too much for the five-person volunteer board to handle.

"We admonish people who want to build their own homes that they need to worry about workers' compensation," he said. Under state law, subcontractors can give waivers to general contractors that claim they will provide their own workers' compensation, but if they don't do so and an accident occurs, it can fall back on the homeowner to pay medical expenses.

In other business Friday, HIPC:

* Approved the final draft of additions and revisions to its Regulations for Construction and Residential Habitation. The revisions include provisions for mechanical permits, mechanical drawings, new permit fees, concrete requirements, electrical wiring, trash containers at construction sites and the Certificate of Occupancy checklist.

* Agreed to send a letter to a property owner in Unit 9 whose renters are storing trash and trailers full of unsightly items on their lot.

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