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CSLB Announces Stings and Large Fines for Jobs Without Permits at IHACI’s 30th Annual Trade Show
At the Institute of Heating and Air Conditioning Industries, Inc.’s (IHACI) 30th Annual HVAC/R/SM Product & Equipment Trade Show, November 18, the California Contractors State License Board (CSLB) released its 2010 enforcement and permit requirements for the first time anywhere. CSLB said it would set up sting operations, targeting contractors not in permit compliance, and increase fines against those not pulling permits.
“At its quarterly meeting on June 11, 2009, CSLB board members voted unanimously to put a high priority on enforcing building permit requirements,” David Fogt, enforcement chief, CSLB, told the packed seminar.
He went on to say that building permits are necessary to ensure that construction is performed according to state and local code and safety standards. When work requiring a permit is done without one, a local building department has the ability to issue a “Stop Work” notice and assess fines against the property owner.
“Permit violations are not only a health and safety issue for the property owner, but can also become a financial liability should someone be injured, or if the un-permitted work is not disclosed during sale or transfer of the property,” he added.
Permit complaints may be filed by consumers, contractors or building department staff. Business and Professions (B&P) Code Section 7090, mandates CSLB to discipline contractors that violate permit requirements. Further, B&P Code Section 7110 specifically provides CSLB jurisdiction in regards to building laws.
Violators may be held responsible for any fine issued to the property owner by the building department, in addition to being subject to civil penalties up to $5,000 and/or suspension or revocation of their license. “The contractor’s complaint history and seriousness of the violation are factors considered when determining the appropriate level of discipline to impose,” Fogt noted.
Tom Garcia of the California Building Officials (CALBO) said that the CSLB has partnered with CALBO to effectively work with local building departments to help identify suspected offenders and perform proactive investigations of violations. In addition, CSLB has begun more stringent enforcement of permit requirements when performing regular investigation of consumer complaints. In January 2010, CSLB’s Enforcement Division will begin targeting suspected offenders for sting operations.
CSLB will continue to educate consumers and contractors during the mediation phase of the more than 20,000 complaints received each year and during community outreach events. “By stringently enforcing permit requirements, CSLB is complying with its mandate of public protection while, at the same time, preserving the integrity of the construction industry in California,” Fogt concluded.
Lyman Lockwood, president of George Haney & Son and president of the IHACI board of directors, noted that energy standards for residential and commercial buildings have changed the way C-20 contractors do business. The coming new Title 24 standards, which go into effect on Jan. 1, 2010, will further change the landscape of the heating, ventilation and air conditioning (HVAC) industries.
Bob Wiseman, president of Canoga Park Heating and Air Conditioning and past-president of IHACI, discussed the desire for a “level playing field” where contractors can compete fairly. He noted that about a third of jobs were permitted prior to the passage of the first California energy standards in 1978. “It became more difficult and expensive after that for contractors to follow the letter of the law,” he said. Today, the best estimates put compliance in the eight percent to 10 percent range. It’s likely far worse.
Wiseman expressed his support for serial-number tracking of equipment sold at the distribution level as the best way to up compliance. “It’s not part of new enforcement and permit regulations,” he said. “It’s something that will take time and may be revisited.”
While the new standards are more detailed, complex and difficult to comply with, Wiseman said there is good news. Through IHACI’s work with CSLB and CALBO, a dialogue has started between contractors and the officials that police their industry.
IHACI is also developing training in conjunction with CALBO. “Our goal is to have contractors and building officials in the same room, training on the same material, so that everybody is together as to what is expected,” said Wiseman. This training will focus on the new 2008 energy codes.
Tav Commins of the California Energy Commission (CEC), spoke of changes in the new Title 24 standards. The new Title 24 compliance forms were debuted and distributed to seminar attendees. Commins said questions about the standards could be addressed by calling the Energy Hotline at (800) 772-3300.
A big change for HVAC change-outs is there is no longer an alternative to duct testing. The new energy standards will be printed in the Jan. issue of Indoor Comfort News.
ARRA Stimulus Funds Make Home Performance Contracting Profitable
Curious heating, ventilation and air conditioning (HVAC) contractors filled the ballroom at the Pasadena Convention Center at the Institute of Heating and Air Conditioning Industries, Inc.’s (IHACI) 30th Annual HVAC/R/SM Product & Equipment Trade Show, in Pasadena, Calif., to hear a panel discussion on the subject of home performance contracting and how to take advantage of the millions of stimulus dollars available to reshape the HVAC industry.
“Why is this a good time to be looking at home performance?” asked Frank Nascimento, regional vice president, GreenHomes America, who sold his HVAC firm, Southern California-based Air King, to GreenHomes as one of its first acquisitions in the Western U.S. “Because we’re transitioning to a clean energy economy, and job growth is the big agenda for the federal government.”
Nascinmento said that anything that will create jobs would become a catalyst for economic growth. HVAC contractors are in a strong position to capitalize on growth in the so-called green-collar jobs because of the magnitude of incentives offered by the federal government.
The $800-plus billion in the federal stimulus package, the American Recovery and Reinvestment Act (ARRA) of 2009, includes $26.5 billion allocated toward energy reduction and renewable sources of energy. “In California, about 15 percent of that figure will find its way into our market,” Nascinmento said.
That $26.5 billion figure is comprised of tax credits for home and business owners. In addition to the federal tax credits and incentives, there are monies that states and utilities will receive from the ARRA to disseminate to contractors, home and business owners in the form of rebates. Federal stimulus dollars will be filtered to the local level.
“Prior to the recent ARRA stimulus funds, the federal tax credits were not large enough to interest most homeowners. But now, homeowners can get up to 30 percent of certain projects as direct savings via a federal income tax credit,” Nascinmento said. “This dramatically improves the return-on-investment dynamic, and we have seen tremendous interest from clients who wish to take advantage of this generous incentive. HVAC and home performance contractors now have a better motivated buyer seeking their services, which is a bright spot in a down economy.”
Nascinmento added that the Retrofit for Energy and Environment Performance (REEP) bill has passed the House and is being debated in the Senate. “This will add significant incentives for prescriptive- and performance-based home energy efficiency improvements, making it easy for a homeowner to do retrofit, whether it be air conditioning, insulation, air sealing, solar hot water, tankless hot water, etc.” he said.
Recently, vice president Joe Biden held a press conference where he revealed a “Recovery Through Retrofit” report. Also, President Obama is contemplating “Cash for Caulkers,” an incentive program that would create jobs focused on home energy efficiency. “The government is proactive on this, they know there’s a huge housing stock that is grossly inefficient and needs to be modernized by skilled contractors to do that work,” Nascimento observed.
He went on to cite aggressive residential energy goals to reduce California’s 13 million residential homes’ energy use by 40 percent by 2020. All new residential construction in California will be zero net energy. The state will run consumer-targeted marketing to get the word out and there will be homeowner incentives. Nascimento also spoke of AB 811, the Property Assessed Clean Energy (PACE) prgram, which, if it passes, will allow local government entities to offer sustainable energy project loans to eligible property owners.
“Property owners benefit by avoiding the upfront installation cost of renewable onsite generation systems and energy efficiency measures and eliminating concerns that they will sell the property before recovering the system investment from utility bill savings,” he said. “The result is that property owners in participating jurisdictions can finance their greening efforts with a minimal level of financial risk.”
Look for the full article in the Jan. 2010 issue of Indoor Comfort News.
