Complaints prompt probe of Contractors Board

The Nevada attorney general's office is investigating the State Contractors Board at the request of a state senator who said he was bombarded with complaints from homeowners.

State Sen. Jon Porter, R-Henderson, said Tuesday that many constituents told him they weren't getting satisfactory responses to allegations that contractors were placing unwarranted liens on their homes or leaving jobs unfinished.

"I've had numerous constituents in my office in tears who lost their life's savings in their homes based on rogue and unscrupulous contractors," Porter said. "I'm hoping we have enough statutes in place but, if necessary, we'll find a better way to protect the homeowners."

Porter also requested that the Legislative Counsel Bureau audit the board and report back to the 1999 Legislature with recommendations for improvement. His actions have been endorsed by fellow state Sen. Randolph Townsend, R-Reno, who promised to use his position as chairman of the Senate Commerce Committee to improve the board's effectiveness.

Among Porter's concerns are that board employees are slow to respond to complaints and that there is high staff turnover.

"I'm hoping it's only a management problem and can be resolved," Porter said.

Bob Harmon, a spokesman for Attorney General Frankie Sue Del Papa, said he couldn't comment on the ongoing investigation, which was prompted by a May 1 letter from Porter. But Harmon noted that Nevadans "must have confidence in state agencies that license contractors and other professionals."

The board, which oversees Nevada's 15,000 licensed contractors, already has undergone an overhaul this year. Margi Grein, who served as the board's director of finance and public relations, was promoted to its executive officer. She replaced Kay Barber, who resigned in February.

The board consists of six licensed contractors and a lay member, all of whom are appointed by the governor. Among the licensed contractors they oversee are 3,104 home builders.

From July 1 through Tuesday, the board received 1,602 complaints, mostly from homeowners, about workmanship or money owed by contractors. Of those, 1,179 were deemed valid complaints. More than 700 were resolved, with the rest yet to be settled.

Grein said Porter's call for an investigation wasn't unexpected. They worked together on legislation last year aimed at increasing homeowners' rights, and they respect one another. Porter described Grein as "part of the solution, not part of the problem."

Under Grein, the board hired a Reno accounting firm, Solari & Sturmer, to perform an ongoing internal audit. The board also hired a Sacramento, Calif., firm to search the country for competent investigators to work for the board.

Grein conceded that some previous state employees who were supposed to investigate homeowners' complaints lacked proper experience. Her preference is to hire investigators with a background in law enforcement and construction.

She said the internal audit also is exploring whether staff members are being paid competitive wages. Employees of other state agencies have long complained that they weren't paid as much as their counterparts in city and county government.

"This is not a case where this board is asleep at the switch," Grein said. "We will address any recommended changes that we haven't addressed in our own audit."

David Clayton, now deputy metro editor for the Sun, wrote a series of stories in 1994 that exposed homeowners' problems in the Las Vegas Valley and their frustrations with the state board.

One of those homeowners, Richard Kersenbrock, said Tuesday that Porter's action was long overdue. Kersenbrock, a retired construction supplier, approached the board after discovering problems with the foundation of his $170,000 home. But he was told the board had limited jurisdiction, and it was suggested he hire a lawyer.

Because of a lack of funds and health problems, Kersenbrock never went to court and therefore never had his home repaired. He still has plenty of pent-up anger about his experience with the board.

"They need to have a set of guidelines that meet the universal building codes," he said. "Now, they just eyeball a home. They do not look at (the home's) specs or plans at all.

"The board itself should be made up of more of a cross-section of people, not just contractors. It should include engineers and suppliers."

Porter said he thinks the board itself needn't be changed. Gordon Absher, a spokesman for Gov. Bob Miller, agrees, saying the governor believes that the boards are independent and should be run in the best judgment of their members.

"A lot of people are expressing confidence in Margi Grein," Absher said.

Grein said she has prepared several bill-draft requests for the 1999 Legislature designed to allow the board to respond more quickly to homeowner complaints and fight contractor fraud.

She also said she would like to establish a "residential contractors' recovery fund," similar to funds used by 15 other states, that would provide up to $20,000 per homeowner to pay for problems caused by builders. The fund would include money from home builders, but the details of her proposal haven't been finalized.

She said she hopes the fund will alleviate concerns about the board's limited jurisdiction. As of now, the biggest hammer the board possesses is the ability to revoke a contractor's license. And that occurs only after staff members have failed to convince the contractor to settle the complaint.

"We get involved after the damage is done for the most part," Grein said. "We need to get the word out to people about how to protect themselves. They can do more to protect themselves before they hire a contractor than we can do after the damage is done."

Grein recommended that Nevadans use only licensed contractors and read the builder's "notice of owner," which discusses how to avoid liens, before hiring that company. She also recommended that consumers take out a project performance bond, which ensures there will be money to complete the job even if the initial contractor fails to do so.

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