Homeowners can be left holding the bag if they hire unlicensed contractors

A thin layer of snow shifted across the bare plywood floor of the unfinished house when construction contractor Ward Adams lifted one of the panels aside. Beneath it, an empty space yawned, mounds of gravel fill piled unevenly where Kimbra Mensch expected the foundation of her house to be.

 

Supporting the house were two concrete pavers on a single joist, running the length of the house. One of them was cracked. The joist was not nailed at either end. Adams pointed to the overhead trusses, saying they were not fixed, and whacked them with a long board to demonstrate. The trusses swayed and trembled with the impact.

Adams and another contractor have since pulled the structure apart and started over with the pieces because he says there were too many mistakes to work with. Mensch’s Nikiski house was brand new. By now, she expected to have a complete house with drywall, plumbing and wiring. The result of months of work by a builder she paid did not meet code for a finished house, and concerned about its stability, she was advised to just tear it down and start over.

“The first time Ward took a look at it, he came back up and said, ‘He built you a playhouse,’” she said. “This is supposed to be my home.”

After months of paperwork, back and forth with the builder and with the Alaska Department of Law, she has not reached a resolution, in part because the builder she hired does not have a contractor’s license and they did not have a formal building contract. Property owners around the state have similar stories, and the Legislature has tried to get a handle on it with a variety of bills over the years.

In cases like Mensch’s, the homeowner is left financially holding the bag for the unfinished home.

What happened

Mensch sold her home in Wasilla to relocate to Nikiski for a fresh start. She is now staying on a friend’s couch. She hired Mark Weathers to construct a small house and a rental cabin on property she purchased on Cabin Lake, where she intended to run her business and rent out a cabin for extra income. She said she paid for much of the work up front with the savings and proceeds she had from selling her home in Wasilla, coming out to about $30,000.

Weathers said he met Mensch last summer when he was helping her find some property to buy in the area. After they found the Cabin Lake property, she asked him to build the cabins. He’s not a licensed contractor — he builds some structures in the winter when he’s not installing tanks with his family’s business, D&W Tank, in the summer.

He said he told Mensch he was not licensed before he began building in September 2017. They never had a formal contract. Mensch paid Weathers for the construciton with personal checks. He said she visited the site often and revised the plans for the house, and he restructured and refitted as the plans changed.

Weathers worked until mid-January, when disagreements between him and Mensch led to him stopping work.

That month Mensch called in an inspector after a friend pointed out issues with the ongoing construction. The inspector, Robert Moss of Wisdom and Associates, listed 48 building code violations. Mensch confronted Weathers about the issues, and threatened him and his father, D&W Tank co-owner Doug Weathers, with a lawsuit if they did not correct the mistakes or pay to have them corrected.

Mensch hasn’t brought a lawsuit, but did file a consumer complaint against D&W Tanks with the Alaksa Department of Law. The department declined the complaint, saying the business could not be held liable because the builder was not acting as a D&W Tank employee and they did not have a contract. The department also declined partly because of factual dispute.

On Jan. 17, Mensch gave Mark Weathers a list of items she wanted fixed at the house, telling him to return the money he had been paid and continue to work, which he interpreted as an order to stop working. After Weathers stopped work, Mensch mounted a sign on the house reading “Mark Weathers with D+W Tank stole my money + left me homeless!” She posted pictures of the sign and wrote about it on social media.

Doug Weathers said he doesn’t want to be involved in the dispute and tried unsucessfully to resolve the issue with Mensch in January. He said he was considering legal action if she continued to defame D&W Tank, which he has owned and operated on the Kenai Peninsula since 1986, installing tanks at homes and facilities such as the Kenai Peninsula Food Bank.

Mark Weathers said he started receiving phone calls about the dispute as soon as the sign went up, with people asking what had happened. He said the situation has been stressful.

“I can’t let (the dispute) disrupt my home or my family,” Doug Weathers said. “I don’t want to cause her any more problems than she’s got, but she’s just about pressed me to the limit that I need to go.”

He acknowledges two mistakes in the construction but says the other deficiencies identified as violations in the inspector’s report were because he hadn’t finished the work yet. He said he tried to work with Mensch at first but has since stopped.

“As soon as you’re told to stop, you go get your equipment and go,” he said. “The next day I got a really nasty text about it.”

Unlicensed contractors

While Mark Weathers isn’t a licensed contractor, he said it’s never been an issue before; he’s been able to work on other cabins and sites with no trouble. He does own a license for a handyman business, through which he finds jobs in the winter.

“No one has ever complained,” he said.

In Alaska, construction contractors are required to obtain a professional license with the option of a further endorsement for residential construction. Within that licensing process comes the requirement for a bond, which the state holds as a surety in case the licensee violates a contract. Contractors also have to be insured.

The Kenai Peninsula Borough does not have any formal building codes outside the cities, nor residential zoning. However, the state does. Moss said the state adopted basic building codes based on national standards in 1992 and has since updated them to comply with international building codes. Only Kenai and Soldotna have their own building codes, which he said are “99 percent the same.”

However, inspections are not mandatory in Alaska, so there’s little enforcement, he said. The only real enforcement comes through financing — financial institutions aren’t likely to allow financing on a home that doesn’t meet building standards and insurers may not insure it.

“If it’s new construction, it’s not uncommon to find a lot of problems, and sometimes major ones like this (one in Nikiski),” he said.

Borough Planning Director Max Best said when people call about building codes, he usually recommends they get an inspector and check for floodplain requirements as well as make sure they know where the property lines are and that they’re not building within the borough’s 50-foot setback from anadromous water bodies.

“That’s the advice I give them. Get yourself an (International Conference of Building Officials) inspector,” he said. “The financial institutions are pretty strict with building codes.”

Things have improved in terms of fly-by-night contractors and work that doesn’t meet code requirements over the years, Moss said. The additional licensing requirements, which require significant time and financial investment to obtain, help winnow out the contractors who are less than dedicated. Inspection and building homes up to code not only helps protect the first homeowner but anyone else who buys it, too, he said.

“You’re also protecting people in the future,” he said.

It’s all in the prep work

Dan Nelson, the 2018 president of the Kenai Peninsula Builder’s Association, recommends anyone looking to build a home communicate fully with a contractor, ask for references ahead of time and stay in touch throughout the process. Contractors rely on references, especially from homeowners whose property they’ve built or worked on, he said.

“Really, you’ve got to get references,” Nelson said. “If you come in here looking for a reference for a contractor, as the Spenard Builders Supply manager, I’m not going to give you one. I don’t see these guys’ work.”

John MacKinnon, the executive director of the Associated General Contractors of Alaska, said people looking to hire contractors can check for their licenses online through the Alaska Department of Commerce, Community and Economic Development’s website. If a contractor is licensed, he or she has to carry insurance. Insurers will provide a certificate of insurance to anyone looking to hire a contractor, MacKinnon said.

“If you’ve been issued a certificate of insurance, you get notified,” he said. “To me, it’s very important when you’re hiring somebody as a homeowner … that that person has insurance.”

The Legislature has tried several approaches to tighten regulations on unlicensed contractors. A 2014 bill added more requirements for contractors, requiring handymen and small construction contractors to be licensed and bonded. This session’s Senate Bill 45 would also require unlicensed construction contractors to tell the state that they do not have a license within two years of building a structure. It would help seam up the hole of people building homes and then flipping them to sell without having to comply with licensing requirements.

Rep. Gary Knopp (R-Kenai), who owns a general contracting business in Kenai, said SB 45 is partly in response to the increase in “buyer-builder” type sales when someone builds a home, lives in it for two years and then sells it. The builder does not have to live in the home for two consecutive years, only two years total of the last five. A number of people have patched together enough days living in properties to qualify them as primary residences, then sold them without a contractor’s license.

“I don’t have an issue with it,” Knopp said. “…(The bill is) not about professionalizing the industry, it’s about consumer protection.”

Nelson and MacKinnon stressed the importance of homeowners researching contractors before hiring them. Nelson said it makes sense for buyers to put in the extra effort for a contractor, especially since they have to live with the result. Contractors who go through the process to be licensed are likely committed to the industry and will want to keep up their reputations, he said. The Kenai Peninsula Builders Association does not give out references but keeps a list of its members for people to check.

MacKinnon said more regulation on contractors is a double-edged sword — laws can protect consumers but could make contractors feel harassed because of the additional enforcement. Buyers can check with the state and other contractors and customers to make sure they’re getting a good company, he said.

“It’s not unique to the peninsula — it happens everywhere,” MacKinnon said. “I think probably the general rule is ‘buyer beware.’”

Mensch disagreed with the Department of Law’s ruling, questioning the contention that there was a factual dispute. However, because she has not found legal recourse, she said she is seeking help from the community through a GoFundMe to finish the house. The contractors she hired to work on the house are doing so at a discounted rate to help her, she said.

“I don’t know what I would have done without them,” she said.

Reach Elizabeth Earl at eearl@peninsulaclarion.com.

Checklist for hiring a contractor

-Research ahead of time, call several contractors for price estimates

-Check online for license registration

-Ask for name of insurance company and call the insurer to obtain a certificate of insurance

-Ask for references for former clients in buildings or sites similar to the one you’re looking to build

-Ask former clients if you can see the contractor’s work

-Keep up communication with the contractor throughout the process

-Follow up when the construction is finished, work out any small remaining issues

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