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How To Handle Mold And Avoid Liability As A Contractor

Posted by Shawn McCadden on Mon, May 16,2016 @ 05:00 AM

How To Handle Mold And Avoid Liability As A Contractor

What contractors should do if they find moldMold remediation experts are not the only contractors who encounter mold on a fairly regular basis. Often times, the homeowner does not learn that there is mold in their house until a contractor points it out. This may be a restoration contractor, an HVAC contractor or even a plumbing contractor.  Read on to find out how contractors can handle mold at their job sites and avoid liability.

 

Contractors should always warn homeowners if they spot mold on the job even if that is not why they are there. Mold can pose a serious risk to the foundation of the home as well as the health and safety of the inhabitants. The homeowner can then contact an Indoor Environmental Professional (IEP) to fully diagnose the problem.

This should be good news to the homeowner. However, this puts the contractors in a tough position. Over the past few years, there have been a growing number of lawsuits against contractors who pointed out the mold to the homeowner. The homeowners often attempt to place the blame on the contractors as the source of the mold, but why?

 

A Way Out For The Insurance Companies

The number of claims made to insurance companies regarding mold damage began to skyrocket in the 90s and 2000s. This was good for the homeowner because the insurance providers paid to have the mold removed and the area restored. It was also good for the restoration contractors because the insurance companies were paying them to do their job. The only entity that didn't benefit from this growing awareness was the insurance provider who had to cover the costs.

Insurance companies found a way out of this predicament by including new and more severe mold exclusion clauses in their policies. This meant the insurance companies were no longer paying for mold remediation. The funds had to come from the homeowner, the contractor, a lender, or a third-party source.

Homeowners didn't want to be stuck with the bill so they began opening lawsuits against contractors claiming that the mold was a result of their work. This greatly increased the risk of working for homeowners as well as in commercial buildings.

 

How Can Contractors Avoid Liability?

Contractors must rely on their own insurance policies to avoid liability in many cases. Their Commercial General Liability (GPL) insurance policy is a standard tool of protection. However, there is a pollution exclusion clause included in this policy. The exclusion states that the insurance does not cover any bodily or property harm caused by the escape, dispersal, or release of pollutants.

Whether mold is considered a pollutant that is not covered by this policy is a widely debated issue. Court cases often tip one way or another without offering any universal standings. Some cases have found the policy to be too ambiguous with their definition of pollution. Others have classified mold as an airborne pollutant.

Contractor Insurance coverage for moldContractors are not advised to leave their career up to chance. Instead, contractors should consider investing in new insurance policies that are specifically designed to cover mold and pollutants. (As well as the standard GPL policy) Contractors Pollution Liability (CPL) covers liability for such pollutants with a clear definition that includes mold or fungi.

CPL may be the best tool currently available for contractors to avoid liability when mold is discovered on a property. That is in addition to proper risk management. Properly managing risk means carefully choosing what customers to work with and how the problem is approached if detected.

 

Dealing With Customers

The customers a contractor chooses to work with, how well they document their work, and how they approach the customer regarding mold will play a big role in how the situation unfolds. First, it's a good idea to avoid working with customers that already seem disgruntled with insurance companies.

This is especially true for mold remediation contractors where the homeowner already knows of the problem and isn't happy that their insurance policy doesn't cover the loss. They may still try to pin further damage on the contractor that outweighs the bill for the services provided. These customers are time bombs that should be avoided when possible.

Addressing the issue as carefully as possible is the final point of recommendation. It's important for contractors to put themselves in the homeowner's position. Mold remediation can be expensive work and the insurance providers have dumped the costs on the homeowner. They need to approach the subject carefully, with empathy, and with a proper course of action.

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Risk Exists

It is impossible to work as a contractor and avoid risk altogether. However, by utilizing ethical work standards, by carefully choosing and approaching customers, and by adding CPL policies to their arsenal they can greatly reduce the risk associated with mold.

RS Hall, Mold expert

 

Guest Blogger: R.S. Hall is the owner of several successful businesses and the publisher of the website www.moldremovalrescue.com which provides solutions for mold problems.

 

 

Topics: Production Considerations, Guest Blogs, Legal Considerations, Customer Relations, Insurance Considerations, Risk Management

Protect Your Business and Your Prospects By Not Leaving Your Plans and Proposals Behind

Posted by Shawn McCadden on Wed, May 13,2015 @ 12:55 PM

Protect Your Business and Your Prospects By Not Leaving Your Plans and Proposals Behind

construction_proposal-wrThe information you include in your proposal comes from your many years of experience and education. For this you deserve to be compensated. I would also suggest your proposal probably only contains a level of detail adequate for you and your team to build from. In reality your proposal may not have adequate detail for others to build from. This may be the best reason to explain to your prospect why you won’t leave it with them unless they buy from you.

If you leave your proposal and specifications behind and the home owner in turn uses them to engage with another business bad things may happen. Although you may not be doing it on purpose or for any devious reasons, by allowing the possibility that other contractors will work from your proposal, inexperienced contractors and homeowners may be making incorrect and costly assumptions. I am referring to assumptions about what is or should be included to do the job correctly, and to comply with building codes as well as safety requirements. By allowing such things to happen you may be putting other contractors, the home owners and or the success of the project at risk.

gavel_on_legal_dict-wrI also suggest you consider the possible liability you take on by creating specifications, in particular project plans, and leaving them with a prospect that does not do business with you. By doing so you may have put yourself into a position where the prospect or another contractor actually works from them. If they have challenges when building the project and decide those challenges were caused by your plans and or specs, they may have legal rights to sue you. Even if they technically don’t have legal grounds, what if they do sue you? Regardless of whether you feel you are innocent or guilty, you will need to cover your own legal expenses if you end up in court. Most likely you will not be able to re-coup your legal costs even if you are found innocent. If you are found guilty you may actually be required to pay the legal expenses incurred by the person suing you.

If you decide to take this risk, I highly recommend you obtain Errors and Omissions insurance coverage or Professional Design Liability coverage. Discuss these insurance policies and how they work with your insurance provider.

 

Some big picture thoughts for remodelers to chew on before deciding to leave their work behind:

  • I suggest you are in the business of selling remodeling, not giving away free designs.
  • Some consumers will contact you just to steal your knowledge. Avoid being used as an unpaid consultant.      
  • Don’t let your proposals, specifications and plans facilitate the ability for “Bubba” to get the job rather than you.
  • Not every lead you get should or will be YOUR customer.
  • If you think you have to leave your work behind because every other contractor does, you are wrong.
  • If you have not had professional sales training you may be leaving your plans and a lot of money on your prospect’s table!

 

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Other related articles:

All Plans and Specifications Will Be For The Exclusive Use Of …

Managing Risks With The Right Design/Build Insurance Options

Design and Spec Considerations for Remodelers Looking to Break $1Million

Four Considerations for Contractors Offering Design - #4 is Most Important!

Is A Contractor Really A Salesperson If He Or She Hits Send?

 

Topics: Contracts, Differentiating your Business, Legal Considerations, Plans and Specifications

5 Examples How IRS Determines If a Construction Worker Is an Employee

Posted by Shawn McCadden on Tue, Jan 21,2014 @ 06:00 AM

5 Examples of How the IRS Determines If a Construction Worker Is an Employee

How does the IRS Determine If a Construction Worker Is an Employee

 

A good number of contractors are deciding not to hire employees as the economy and their workloads improve.  Instead, they plan to hire sub contractors to get the work done. I have talked with many of these contractors and the majority of the ones I spoke with are putting themselves at significant risks.  If you don’t know how to properly differentiate between an employee and an independent contractor you better find out.  If the IRS or another government agency decides a worker is an employee, not a sub contractor, it could cost you and your business big time.


Below are some examples of how the IRS would determine whether a worker is an employee or an independent worker. This information comes from a 2014 IRS Publication titled “Employer’s Supplemental Tax Guide”.

I hope these examples will help you properly classify your workers and help you avoid unneeded fines and sleepless nights.

 

Example 1:

Jerry Jones has an agreement with Wilma White to supervise the remodeling of her house.

The details: She did not advance funds to help him carry on the work. She makes direct payments to the suppliers for all necessary materials. She carries liability and workers' compensation insurance covering Jerry and others that he engaged to assist him. She pays them an hourly rate and exercises almost constant supervision over the work. Jerry is not free to transfer his assistants to other jobs. He may not work on other jobs while working for Wilma. He assumes no responsibility to complete the work and will incur no contractual liability if he fails to do so. He and his assistants perform personal services for hourly wages.

IRS Says… 

Jerry Jones and his assistants are employees of Wilma White.

 

Example 2:

Milton Manning, an experienced tile setter, orally agreed with a corporation to perform full-time services at construction sites.

What is an Independant ContractorThe details: He uses his own tools and performs services in the order designated by the corporation and according to its specifications. The corporation supplies all materials, makes frequent inspections of his work, pays him on a piecework basis, and carries workers' compensation insurance on him. He does not have a place of business or hold himself out to perform similar services for others. Either party can end the services at any time.

IRS Says… 

Milton Manning is an employee of the corporation.

 

Example 3.

Wallace Black agreed with the Sawdust Co. to supply the construction labor for a group of houses.

The details: The Company agreed to pay all construction costs. However, he supplies all the tools and equipment. He performs personal services as a carpenter and mechanic for an hourly wage. He also acts as superintendent and foreman and engages other individuals to assist him. The company has the right to select, approve, or discharge any helper. A company representative makes frequent inspections of the construction site. When a house is finished, Wallace is paid a certain percentage of its costs. He is not responsible for faults, defects of construction, or wasteful operation. At the end of each week, he presents the company with a statement of the amount that he has spent, including the payroll. The company gives him a check for that amount from which he pays the assistants, although he is not personally liable for their wages.

IRS Says… 

Wallace Black and his assistants are employees of the Sawdust Co.

 

Example 4.

Bill Plum contracted with Elm Corporation to complete the roofing on a housing complex. 

IRS Independent Contractor ruleThe details: A signed contract established a flat amount for the services rendered by Bill Plum. Bill is a licensed roofer and carries workers' compensation and liability insurance under the business name, Plum Roofing. He hires his own roofers who are treated as employees for federal employment tax purposes. If there is a problem with the roofing work, Plum Roofing is responsible for paying for any repairs.

IRS Says… 

Bill Plum, doing business as Plum Roofing, is an independent contractor.

 

 

Example 5.

Vera Elm, an electrician, submitted a job estimate to a housing complex for electrical work at $16 per hour for 400 hours.

The details: She is to receive $1,280 every 2 weeks for the next 10 weeks. This is not considered payment by the hour. Even if she works more or less than 400 hours to complete the work, Vera Elm will receive $6,400. She also performs additional electrical installations under contracts with other companies, that she obtained through advertisements.

IRS Says… 

Vera is an independent contractor.

 

Related articles:

Contractors, Will Your Use Of Subcontractors Land You In Jail too?

RRP Nightmare-GC and His Subcontractor Both Get Nailed By EPA

 

 

 

Topics: Subcontractor Considerations, Legal Considerations, Government Regulations

All Plans and Specifications Will Be For The Exclusive Use Of …

Posted by Shawn McCadden on Tue, Sep 03,2013 @ 06:00 AM

All Plans and Specifications Will Be For The Exclusive Use Of …

Contractor does plans for free

 

Do you give your plans and specifications away to prospects for free, or do you only leave plans and specifications with paying customers? 

Remember, people who want stuff for free hang around with other people who want stuff for free.  How you decide to answer this question will have a long term effect on your business and future referrals. 

If you choose to not leave your proposal with prospects unless they commit to your company, this policy should be discussed with your prospects during the initial sales call.  By doing so it will not become a surprise to them when you come back to present your proposal. 

You are presenting, not emailing proposals, right?

 

Sample text

Here is some sample language you can consider using inside the remodeling proposals you create for prospects.  This information is for your reference only.  Be sure you have it reviewed by your own legal council before using it.

This proposal and any related plans and specifications shall be for the exclusive use of; and will remain the property of “Construction Company” until a Construction Contract agreement for the proposed work is reached between both parties.  The acceptance of this agreement will require the owners’ signature(s) and payment in full of the specified deposit.   If this proposal is not accepted at the time of presentation, owner(s) are welcome to view all plans and specifications at the contractor’s office at a mutually agreeable time.

 


selling remodelingThis language is best used at the beginning of your proposal

Include your policy in beginning of your proposal so you can remind your prospect about your policy very early during the proposal presentation meeting.  If they have a problem with your policy you can discuss their concerns and both of you can decide whether it makes sense to continue and present/discuss the rest of the proposal. 

 

 

By not leaving your proposal behind you are protecting your business as well as your prospect

The information you include in your proposal comes from your many years of experience and education.  For this you deserve to be compensated.   Also, because you and your team have expereince working together, I would suggest your proposal probably contains a level of detail adequate for you and your team to build from.  But, your proposal may not have adequate detail for others to build from.  If you allow other contractors to work from your proposal they and the home owner may be making assumptions about what is or should be included to do the job correctly and to building code or safety requirements.  By allowing such things to happen you may be putting other contractors, the home owners and or the success of the project at risk. 

 

How much risk are you willing to accept to sell a deal?

Should you leaving plans and specifications behindI also suggest you consider the possible liability you take on by creating specifications and or project plans and leaving them with a prospect that does not do business with you. By doing so you may have put yourself into a position where the prospect or another contractor actually works from them.  If they have challenges when building the project and decide those challenges were caused by your plans and or specs, they may have legal rights to sue you.  Regardless of whether you feel you are innocent or guilty, you will need to cover your own legal expenses if you get to court and most likely will not be able to re-coup your legal costs even if you are found innocent.  If you are found guilty you may even be required to pay the legal expenses incurred by the person suing you.

If you decide to take this risk, I highly recommend you obtain Errors and Omissions Insurance Coverage or Professional Design Liability Coverage.

 

Some big picture thoughts for remodelers to chew on before they decide:

  • I suggest you are in the business of selling remodeling, not designs.  Can you earn a living selling designs?
  • Avoid being used as an unpaid consultant.  How does that feel when it happens?
  • Don’t let your proposals, specifications and plans facilitate the ability for some guy named “Bubba” to get the job rather than you.
  • Not every lead you get should or will be YOUR customer.
  • If you work for the wrong customers, they will be referring you to people just like them!

 

 

Topics: Contracts, Sales Considerations, Differentiating your Business, Legal Considerations, Prequalifying, Business Considerations, Plans and Specifications, Insurance Considerations

Contractors, Will Your Use Of Subcontractors Land You In Jail too?

Posted by Shawn McCadden on Tue, Aug 27,2013 @ 06:00 AM

Contractors, Will Your Use Of Subcontractors Land You In Jail too?

Contractor Sent to Jail for workers comp fraud

 

Being a contractor is no longer an amateur sport.  Due to government regulations and laws a contractor can get into serious trouble if he or she is not following the rules of law.   Even if you were ignorant of those rules, the government will still hold you accountable to the legal responsibilities you must accept if you run a residential construction or remodeling business.  A few weeks back I shared how a GC and his subcontractor both got fined for not following the EPA’s RRP rule on the same job due to an anonymous tip.   Between the two businesses they could end up paying about $120,000.00 in fines.   In this blog article I want to make you aware of a contractor who may just go to jail for purposely cheating regarding workers compensation.

 

The facts

The owners of Triple Star Roofing in Wood County Ohio were recently found guilty of fraud for failing to report their payroll to the Ohio Bureau of Workers' Compensation.  Like the RRP violations mentioned above, their business was investigated after an anonymous tip.   During the investigation bank records were analyzed for the 2004 to 2008 time period.  The investigation found that checks were issued to the same individuals on a weekly basis with many of them indicating “payroll” in the memo section.  As a result the company owners now face possible prison terms of one to five years and fines of up to $10,000.  Additional charges are still pending for the 2009 to 2012 time periods.  I am sure you would agree, they are feeling a world of hurt and are probably scared as hell.

Ohio Bureau of Workers Compensation“Schemes like this to avoid paying premium undermine the purpose of workers’ comp insurance – to protect workers who are injured on the job – and will result in unwanted attention from our investigators.”

Steve Buehrer, Administrator/CEO, Ohio Bureau of Workers’ Compensation (BWC)

 

What about you and your business? 

Are you operating illegally to save money and or to be the lowest bidder?  How would you answer the list of questions I pose below?  I don’t know the laws in your location, but remember, if you were in Ohio, and answered yes to any of them, you too might be facing jail time if you get caught.

  • Are you paying employees “under the table” to avoid paying payroll taxes or workers compensation premiums?
  • Are you treating employees as subs to avoid paying payroll taxes or workers compensation premiums by giving them 1099’s?
  • Are you misclassifying workers to put their payroll into a lower cost workers compensation rate?
  • Are other legal and legitimate contractors frustrated that you are stealing work away from them?

These are some of the reasons the owners of Triple Star Roofing are facing potential jail time.   I wonder how their families are doing while they all wait to see what will happen.

 

So let’s just say you get caught, have to pay fines, but don’t actually have to go to jail.  

ohio contractor goes to jail for fraudHow would you look at that?   I know one contractor who had that happen to him.  When I asked him about it he told me he was definitely scared about going to prison so he spent big money to hire a good lawyer to try to keep him out of prison.  He said the lawyer was successful but he was definitely sweating it right up until the final verdict.  He didn’t get any jail time but did have to pay a lot of money in fines.  He also told me that when everything was said and done, and based on all the money he saved over the years by cheating, the fine and lawyer fees were far less than the money he saved.  He told me he felt it was worth the risk.

I then asked him if I asked his wife and kids if they thought it was worth it what their response would be.  He told me he had never thought about that…

Read More Here

 

Topics: New Business Realities, Legal Related, Legal Considerations, Government Regulations, Insurance Considerations, Workers Compensation, Enforcement and Inspections, Violation Reports

Government to Contractors: Start Hiring Convicted Felons!

Posted by Shawn McCadden on Sun, Mar 24,2013 @ 09:30 AM

D.S. Berenson

 

Guest Blogger: D.S. Berenson is the Washington, D.C. managing partner of  Berenson LLP (www.homeimprovementlaw.com), a national law firm specializing in the representation of contractors and the remodeling industry. He may be reached at info@berensonllp.com.


Equal Employment Opportunity Commission to Contractors:  Start Hiring Convicted Felons!

EEOC Says Hire Convicted FelonsOur friends at the Equal Employment Opportunity Commission (EEOC) have recently decided that “equal opportunity” should include convicted felons.  That is according to a bizarre and confusing “guidance report” recently issued by the EEOC directing employers to hire more felons and other ex-offenders .  And if you refuse?  Well, then you risk committing a federal crime.

The EEOC was originally established to enforce Title VII of the 1964 Civil Rights Act – allowing workers to bring suits and claims against employers for illegal hiring practices against minorities.  But like a number of federal agencies, the EEOC seems to be reinterpreting and expanding their mandate to fall into a more “politically correct” frame of mind these days. 

Some History

Hiring convicted felons

In the late 1980’s the EEOC sued a Florida trucking company because the company refused to hire a Hispanic man applying for an open truck driver position.  The company, Carolina Freight Carrier Corp., showed the EEOC that the man had multiple arrests and had served 18 months in prison for larceny.  “So what?” said the EEOC, that has nothing to do with his qualifications to be a truck driver.  The EEOC stated that company’s hiring practices created a disparate or unequal impact on minorities - and as a result was illegal.

The case went to court and was heard by U.S. District Judge Jose Alejandro Gonzalez Jr. (and, yes, he was Hispanic).  The judge, in ruling against the EEOC, summed the situation up nicely: "EEOC's position that minorities should be held to lower standards is an insult to millions of honest Hispanics. Obviously a rule refusing honest employment to convicted applicants is going to have a disparate impact upon thieves."

Not surprisingly, the EEOC ignored the ruling and moved ahead anyway. In 2012, the agency formally declared that that "criminal record exclusions have a disparate impact based on race and national origin."  (In plain English, that means that refusing to hire convicted criminals results in discrimination against minorities).

 

Background Checks before hiring

Catch 22?

With the most recent guidelines, the EEOC is now warning employers that refusal to hire job applicants due to a criminal past will be seen as a violation of the Civil Rights Act.  Sadly, the EEOC doesn’t tell us what to do when we hire a convicted felon, but then get sued when the convicted felon commits crimes against our customers and office workers.

For those who believe in the domino effect, stay tuned:  President Obama has just nominated Tom Perez to head up the Department of Labor. Mr. Perez currently sues banks for discriminatory lending practices in his role as head of the Department of Justice’s civil rights division.  His legal theory in these suits?   That employers are liable if their lending practices result in a “disparate impact” to minorities – the same theory now pushed by the EEOC in regard to employers refusing to hire convicted felons!

 

Topics: Hiring and Firing, Recruting, Guest Blogs, Legal Considerations, Government Regulations

Videos About The EPA RRP Rule Offer Good Refresher Info

Posted by Shawn McCadden on Sun, Mar 10,2013 @ 06:00 AM

Videos About The EPA RRP Rule; RRP Information For Renovators

RRP Instructor Shawn McCadden

 

Back in 2010 when the RRP Rule first went into effect I completed a series of seven videos about the EPA RRP rule. The RRP videos were done for Remodeling magazine. They are posted to the Remodeling TV area of Remodeling’s web site.

The series is titled “The Insider's Guide to the EPA's Renovation, Repair and Painting Rule”. It covers critical information about the Environmental Protection Agency's RRP rule and certification process, and explains how the rule can or will affect your contracting business.

 

Below is a list of the videos, with a brief description of what is discussed in each one as well as links to view them:

Video One: The EPA RRP Rule and Your Business

This video covers the business responsibilities, associated liabilities and risks related to the RRP Rule. Kermit Baker, Senior Research Fellow at Harvard University's Joint Center for Housing Studies stresses that remodelers need to become experts in this area or leave the work to others who are. Attorney Mike Sams of Kenney & Sams, P.C. warns about the legal liabilities for failure to follow the regulations. Shawn McCadden discusses the firm and worker certification process, related fees as well as certified renovator and firm responsibilities.

 

Video Two: RRP Training

This video covers the worker training requirements of the rule and the content of the EPA Certified Renovator training class. Shawn McCadden also discusses the importance and benefits of choosing a training class conducted by a training instructor with real life renovation experience.

 

Video Three: EPA RRP Notification Requirements

The EPA RRP rule specifies certain notification requirements depending on where the work is done and who occupies and or visits the building being renovated. This video covers these requirements, related firm documentation requirements as well as the information and documentation that must be given to property owners and others. Shawn McCadden also discusses many of the important details that must be included in the required documentation.

 

Video Four: RRP Work Practices

This video includes a summary of the required lead-safe work practices required under the RRP Rule. Shawn McCadden walks through critical considerations related to the rule that must be followed to stay in compliance with the rule, protect occupants and workers and to control costs. Shawn also discusses interior and exterior cleaning and cleaning verification requirements.

 

Video Five: RRP Record Keeping

Inspection of the required documentation under the rule will be a major enforcement tool used by EPA. In this video Shawn McCadden discusses the required documentation related to worksite activities as well as many business administration activities. Mark Paskell of the Contractor Coaching Partnership shares a few of the many methods EPA will have at their disposal to inspect and verify a firm’s compliance with the rule. Shawn adds several more methods to Mark’s list and also discusses the penalties and fines EPA can assess on violators.

 

Video Six: Exemptions to RRP Work Practices

In this video Shawn McCadden gives examples of when, where and why the RRP rule and work practices are not required under the rule. Shawn stresses that even if the work practices are not required under the RRP rule, your business will still be liable if lead poisoning and or contamination results from the way work is performed. Shawn and contractor insurance expert Tom Messier of Mason and Mason Insurance both stress the importance of verifying proper and adequate insurance coverage to protect your business, available coverage options as well as related costs for coverage.

 

Video Seven: Business Considerations and Summary

Shawn Mccadden stresses that this new rule is a game changer. Shawn tells us businesses must take this new rule seriously and adjust their business practices accordingly to protect profits and control liabilities. Mark Paskell of the Contractor Coaching Partnership stresses that contractors should verify that the documentation forms they use will comply with the rule and also assist the business in managing and performing the work. Gerry McGonagle of Belfor Property Restoration offers his advice on qualifying the right employees to do the work. Shawn also discusses some of the new responsibilities the rule brings with it for employees in all positions within the business.

Topics: Videos, Success Strategies, Legal Considerations, RRP Related

RRP Conundrum: To Test or Not to Test for Lead Paint.

Posted by Shawn McCadden on Sun, Feb 24,2013 @ 06:00 AM

RRP Conundrum: To Test or Not to Test for Lead Paint.

RRP Lead test considerationsSince the EPA RRP rule came into effect in April of 2010 renovation contractors have debated and bantered the topic of doing lead testing before they offer to sell and or perform renovations at pre 1978 properties. Due to lead testing disclosure requirements many contractors and properly owners have concerns about doing the testing.  Once a property is identified as containing lead many other laws, legal considerations (page of related articles) and potential liabilities kick in for both.   The catch 22 on this subject is that, under the RRP rule and the OSHA lead in construction regulations, if testing is not done before work begins, contractors must assume there is lead present.   It’s only natural under this scenario then that renovation workers, property owners and tenants at those properties are also left to assume, and worry, that there is lead and conducting renovations may leave them exposed.

Should I test for lead paintOften discussions on these topics get passionate when contractors express their concerns about the liability they feel the rule exposes them and their businesses to even if they follow the rule and comply with all of its lead safe work practices and documentation requirements. Many contractors feel the EPA should have written some level of protection from liability into the rule for those renovators who abide by it. 

Recently I discussed these considerations with John MacIssac of ASAP Environmental.  John is MA State Certified Lead Inspector and Risk Inspector and an expert in renovation and construction.  During that conversation John and I assembled a list of the considerations that seem to rise to the top during those discussions.  

Who pays for RRP lead testing?

If a certified renovator will not be the one doing lead testing for RRP purposes, the testing must be done by a licensed lead testing professional.  Licensed lead inspectors in Massachusetts and other states cannot accept money for lead testing from contractors under contract with a property owner.  Therefore the homeowner is responsible for payment of all services relative to the lead testing.

Are you removed from liability if RRP lead testing is done?

Depending on the contractor liability insurance that you have you may be removed from liability if you do the testing, cleaning and cleaning verification yourself.  If you do not have insurance you are not removed from liability.  If you have a licensed lead inspector do the testing and clearance you are removed from liability if the company you hire to do the testing has their own coverage.

Considerations related to doing testing yourself using test kits vs. using a licensed lead Inspector

    • Testing for lead with FRX gunTime it takes to do the testing and fill out the paperwork
    • Cost of test kits depending on number of components to test
    • Damage to components
    • The EPA recognized lead test kits are qualitative where as a XRF test is quantitative.   Under the EPA RRP rule’s legal definition of lead paint, the amount of lead present may be below RRP definition, but, if using test kits, any positive result triggers need for compliance even if below definition.

Pretesting to establish a point of reference when clearance testing will be a requirement at completion

A pretest for lead dust could establish whether the site is already contaminated or not.   If it is, who will perform and pay the related costs to get it cleaned up before the contractor starts renovation work so the contractor is only then responsible to clean up affected work areas and pass dust wipe clearance testingat completion?

 

Education will be key in preventing liability

RRP TrainingThere are typically no easy answers to these considerations or guaranteed ways contractors can sell and do their work to prevent the possibility of liability.  That said education about the considerations and available options is probably the best way for contractors to protect themselves and their business.

If you’re in Massachusetts and want to learn more about the RRP rule, lead testing considerations and lead testing options John will be hosting a free Lunch and Learn Session at National Lumber in Mansfield MA on March 3rd, 2013 from noon to 1PM.   The Lunch and Learn Session will be held before the start of a workshop presented by RRP Instructor and RRP Rule expert Mark Paskell titled RRP and OSHA Workshop for Contractors and Remodelers” that will also include a discussion about the differences between the EPA RRP rule and the Massachusetts RRP regulations.

 

 

Topics: Effects of the RRP Rule, OSHA Considerations, Legal Considerations, Government Regulations, Insurance Considerations, RRP Related, Lead Test Kits and Testing

Checklist for Contractors Offering Snow Removal Services.

Posted by Shawn McCadden on Fri, Feb 08,2013 @ 09:17 AM

Checklist of Consideration for Contractors Offering Snow Removal Services.

Making money doing Snow removal

 

When winter snows and ice dams hit many contractors see offering snow and ice dam removal as an opportunity to make money.   If you’re considering snow removal as an opportunity for your business thinking ahead about how and where you offer it, as well as how you will perform the work, can help protect your business from inherent risks.  Thinking ahead about your approach can even help you drum up additional work after the snow has disappeared.

Offering snow removal services makes sense for many contractors 

After all, if work is slow during winter months, snow removal can bring in extra revenue.   Also, many projects come to a halt when the weather makes working outside impractical or makes going in and out of a building while working on interior renovations dangerous and messy.   If you price it correctly, offering snow removal and ice dam removal can help keep employees working and help contribute gross profit to cover business overhead.

How the snow removal checklist list came about

Offering Snow and ice removal servicesSeveral years ago I helped one of my remodeler coaching clients plan out how to offer and perform snow removal services.   He called me because he realized there were a lot of things he should consider before just sending his guys out with there with shovels and axes.  Below is a list of considerations from my coaching session notes created during my discussions with him.   By sharing my notes my hope is that you will find them helpful, you will price the work for profit, you and your employees will be safer while performing the work, you can use the opportunity to create new customers and you will generate future work from those that hire you.

 

Checklist of Snow Removal Services Considerations for Contractors:

  • Suggested he consider the work is labor intensive, he will not be earning his typical gross profit on subs or materials, be sure to price hourly rates accordingly.
  • Agreed on $300 first hour with two men, $80/hr per additional man hour.
  • 4 men doing it currently.  Full employees with Workers Compensation (WC) coverage. 
  • Charging for snow removalDiscussed properly equipping his employees to avoid risk and health problems. Confirmed he has fall protection equipment needed to meet OSHA requirements and employees know how to use it.  Should try to do as much of the work as they can from the ground.
  • Confirmed that he knows which WC classification workers will be in while doing the work and what rate he will be charged on all related payroll.
  • Discussed a variety of ways to do the work to limit residual damages.
  • Discussed setting realistic expectation with clients before doing the work. Agreed that only using a verbal agreement about services would not be acceptable.
  • Help home owners understand nature of the work, let them know that damages will happen and that he cannot guarantee preventing leaks or any possible damages inside or outside.
  • Suggested he have an agreement; created and or reviewed by legal counsel.
  • Suggested he disclaim in the agreement any water damage prevention and or remediation responsibilities.
  • Target market area Look at the work as a good way to meet new clients.  Because there might be more demand than he can service, be selective about who he will work for, make sure they fit within his target customer/location niche.
  • Suggested he make follow up calls to verify home owners are all set and happy, ask if they should come back if it keeps snowing.
  • Collect contact info including e-mail addresses so he can re-market for future work.
  • If he uses any subs make sure they are properly insured and follow OSHA requirements.  Make sure subs know not to attempt to solicit or accept any work from his customers.
  • Keep emergency contact info on site and or in each vehicle.
  • Suggest he ask about future work, both snow related and remodeling.
  • Could create a checklist of things to ask or tell customers related to the work and future work; what his company does.  Said he has already created a simple sheet listing other work they do.
  • Suggested he should be prepared regarding how to differentiate his business from other businesses offering the work. Discussed one way is to offer all clients an insurance certificate that lists the home owner as an additional insured, sent direct to the client from his insurance agent before work starts.  Verify his agent is prepared and capable to do so.
  • Suggested considering doing a YouTube video commercial about the service and put it on his website ASAP.
  • selling Ice dam removal servicesDiscourage use of Red Bull, maybe even coffee. Suggested hot chocolate and donuts.
  • Suggested refrigerator magnets would be a good leave behind.  Also consider 5-5-10 door hanger package we had discussed on a previous call about jobsite marketing.
  • Asked him what his top three takeaways from our discussion were:
  1. Caution regarding liabilities, set expectations with clients in writing.
  2. Realizes the marketing opportunity, concentrate on working for his target customer.
  3. Keep an eye on the big picture to avoid liabilities and not miss an opportunity by being blinded by a just getting the work done mentality.

 

Topics: Success Strategies, Differentiating your Business, Earning More Money, Marketing Ideas, Mentoring/Coaching, Marketing Considerations, OSHA Considerations, Subcontractor Considerations, Legal Considerations, Prequalifying, Seasonal Opportunities

General Contracting Starts With a Good Construction Contract

Posted by Shawn McCadden on Sun, Dec 30,2012 @ 06:00 AM

General Contracting Starts With a Good Construction Contract

Diane Menke and Tamara Myers

 

Guest Blogger: Diane Menke, VP/Operations Manager of Myers Constructs, Inc.  Diane Menke (left) and Tamara Myers (right) are the co-owners and principals of Myers Constructs, Inc., an award-winning design to build firm serving the greater Philadelphia region. A certified Women Business Enterprise, Myers Constructs is also a member of the U.S. Green Building Council, NARI, and NKBA.

 

 

General Contracting Starts With a Good Construction Contract

Construction ContractOver the years, I have heard from many contractors — some of them with very big companies — about how they handle drafting their business contracts. Many times, these documents consist of a collection of "stuff some guys I know have in their contracts" cobbled together. It doesn't even occur to these business owners that laws vary by state, or that they might need an expert to customize contracts to fit their own business's unique needs. By not having a professional create legal documents that fit a clear sales procedure and overall company goals, they are putting their company at serious risk. I know because we learned the hard way, too. 

When we first started our business, we used "homemade" and very simple carbon copy contracts that Tamara put together over the many years she was a carpenter working for herself.  Basically, it stated: "Seller will do X for Buyer for $Y." Like most carpenters and trades people, Tamara loved working with her hands and helping people. Carpentry was a joyous creative outlet for her. At that time, if a customer didn't pay, Tamara would "make nice" in order to "keep the peace and her good name" and move on to the next project. Lucky for Tamara, most of her customers were good people, the projects were small, and she probably didn't lose as much as she could have. 

What motivated us

Remodeling ContractIn 1998, we incorporated as Myers Constructs, Inc., because we had taken on a huge and complicated renovations project. We knew we needed serious business structures in place to protect us, so in 2001 we asked Dana Priesing, an attorney who is now our office manager, to read our contracts to look for problems. (She had us sign a contract before she did so!) Dana interviewed Tamara to better understand how she sells, and how our customers buy, and then gave us a few recommendations right off the bat:

  1. Don't give away design work. That was a huge lost income stream. It drained endless hours of Tamara's time, and sometimes we didn't even get the project. Dana advised us to bill for it, and she created a contract just for design work. We can now use the same contract if a customer with an architect needs consulting work during the design phase. 
  2. Our income streams should be separated out, and clear and simple contracts should be created for each one. We now have one for fixed price contracts and one for time and materials contracts, which are typically smaller, simpler projects.
  3. Don't use "softening statements" EVER in contracts. By softening the rules, boundaries and regulations of our agreements, and by being vague about price, payment schedules, and customer expectations, we had unintentionally created confusion. Our customers didn't know what we needed from them in order to do a good job, so Dana created a contract for us that clearly and separately identifies buyer's and seller's responsibilities, rights, and remedies.

 Protecting our investments

Contract Clauses for construction contracts

 

Our company supports a lot of people. We have invested decades into it, and we are depending on it to help us retire. It deserves great contracts to protect those objectives. And great contracts mean we can sleep soundly at night because we know we are doing what we agreed to do at the right price, and we are protected against any possible issues that may arise.

 

Liked this guest blog?   You might like this one too:

What Happens In Vagueness Stays In Vagueness!

 

Topics: Legal Related, Contracts, Guest Blogs, Legal Considerations, Opinions from Design/Builders, Design Options