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Homeowners face double jeopardy in contractor disputes

September 20, 2024 | Contractors State License Board, Other State Agencies, Executive, California


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Homeowners face double jeopardy in contractor disputes
In a recent government meeting, stakeholders discussed pressing issues surrounding the construction of Accessory Dwelling Units (ADUs) and the financial protections for homeowners engaging contractors.

One contractor proposed a new funding mechanism, suggesting a tax on ADU permits to support a fund aimed at improving contractor accountability. This could involve creating specialized licenses for ADU builders, which would help regulate the market and protect homeowners from unscrupulous practices. The contractor emphasized the need for a licensing system that would deter fraudulent claims and ensure quality work.

Christopher Peterson raised concerns about homeowners facing double jeopardy when contractors fail to pay subcontractors, leading to liens against the homeowner's property. He proposed that large payments to contractors be placed in escrow accounts, allowing subcontractors to file liens against these accounts instead of directly against homeowners, thereby reducing financial risk for homeowners.

Douglas Washboard highlighted issues with the banking industry's handling of fraud claims related to contractor payments. He called for legislative changes to improve consumer protections, particularly regarding the timelines for disputing unauthorized transactions.

Janine Carroll echoed concerns about the financial burden on homeowners when contractors fail to pay subcontractors, advocating for better communication and accountability within the construction process. She criticized the slow response of regulatory bodies in addressing fraudulent activities, urging for more proactive measures to protect consumers.

Katie Lucas suggested implementing a law requiring subcontractors to notify homeowners within 30 days if they have not been paid, aiming to foster better communication and quicker resolutions to payment disputes.

The discussions underscored a collective call for enhanced regulatory measures and improved communication in the construction industry to safeguard homeowners and ensure fair practices among contractors.

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