Montana contractors aren't licensed

Allegations that a local contractor scammed customers have raised questions about how consumers in the fast-growing Flathead can protect themselves.

Contractors in Montana are not licensed. That means, as one property-casualty insurance agent sees it, that the person who cuts your hair has to be licensed, but the contractor who will manage what is most people's largest lifetime investment does not.

The average cost of a new home in Flathead County last year was $260,000, according to the Montana Building Industry Association. Some local contractors believe that customers should have some protection for that investment, particularly after a few contractors have closed their doors and left with projects unfinished in the past few years.

Contractors register with Montana for a $70 fee. Registration is required for all contractors except those without employees and for plumbers and electricians. The latter two professions do require licensing in Montana.

Registration is the state's attempt to ensure that contractor's pay worker's compensation insurance for employees. That is a protection for customers who could face claims by uninsured workers who are injured on the job.

The problem, according to Dennis Kelleher of Kelleher's General Contracting Service in Bigfork, is that registration provides neither oversight of contractors or enforcement capability if things go wrong. Anyone can build a garage or a house for a friend and no one really checks to see if the builder is certified.

"No matter what they do in government, if they don't enforce it, it's nothing," he said.

He believes the first two things a customer should ask a potential contractor is for proof that employees are covered by worker's comp and proof of insurance.

"What happens when your house burns" in the middle of construction? Kelleher asked. It's happened and homeowners using uninsured contractors have no protection against disaster, he said.

Ideally, he said, homeowners choose a contractor based on itemized bids and then have a project manager to oversee construction. They account to the homeowner for the purchase of every nail in the project.

"In God we trust. Everybody else, you should verify," he said.

That means that all bills submitted for supplies and those from subcontractors - the workers who put in concrete, wiring, framing, plumbing and finish work, for example - should be reviewed by the homeowner.

Contractors generally receive discounts from suppliers. A good contract will specify whether that savings is passed on to the customer or whether the builder will keep it. Either way, it should be agreed to by both sides.

There should be receipts, Kelleher said, as proof that the suppliers and subcontractors have been paid, either directly by the homeowner or by payments made to the contractor and passed down to the subcontractors. Some banks will also provide that service for homeowners whose loans they carry.

Subcontractors can place liens against houses if they go unpaid by unscrupulous contractors. Some professionals, such as Kalispell attorney Chad Wold, encourage owners to have signed lien releases from all subcontractors to prevent that.

That leaves the subcontractors to fend for themselves for payment from the contractor and some simply won't forfeit that protection against getting fleeced.

Chris Zarcone started a business called Any Home Service, Inc. in Kalispell to screen contractors for homeowners.

"I was so fed up with dishonest contractors giving other contractors like myself a bad name," Zarcone said. "One of our contractors decided to take a deposit from a customer and we never heard from him again."

His service verifies that contractors are legal and insured. It checks references, conducts interviews and produces a document Zarcone says hold contractors legally responsible for their work.

The company does follow-up with customers to rate their satisfaction with the builder, Zarcone said.

One contractor, Jack Bowerman, who works out of Proctor, said good references like that are invaluable to honest builders, but those who are new to the area are handicapped by not being well known.

Many residents are skeptical of small builders who move into the valley during this time of construction growth, wondering if their craftsmanship and integrity will equal the amount of money that can be made.

That's ironic, Bowerman said, because many of those builders are coming from states that require contractors to be licensed, even pass written tests.

The time for that has arrived in Montana, he said.

"I'm hurt these people take advantage" of local residents, he said of unsavory contractors.

"We've got to regulate," he said.