PLATTSBURGH, N.Y. (Legal Newsline) - New York Attorney General Eric Schneiderman announced a settlement with 47 home improvement contractors on Friday.
The lawsuit follows the alleged discovery of widespread violations of the law by the contractors, including the failure to provide written contracts or honor the most basic terms of consumer work agreements.
"It happens all too often, homeowners hire contractors without having a signed contract stating what work will be done and how long it will take," Schneiderman said.
"And all too often, they end up with a much larger bill than expected, or with a project that was never started or completed. Homeowners need to know their rights and home improvement contractors need to obey the law. My office will fight to protect consumers' hard earned dollars and ensure that bad contractors are held accountable."
Home improvement contractors are required by Article 36-A of the General Business Law to provide consumers with a written contract signed by both parties before beginning work that sets out specific information and disclosures.
The required contract must provide an estimated starting and completion date, describe the work that will be done, include materials that will be provided and give the consumer notice of an unconditional three day right to cancel the contract without penalty.
The law also requires any advance deposits taken out by the contractor to be placed in an account at a banking institution separate from the contractor's other funds. Consumers must be notified of the banking institution where the deposit is kept.
Four-hundred contractors were sent letters two years ago informing them of the statutory requirements as a means of education. When consumer complaints about contractors did not decrease, Schneiderman's office sent a survey to more than 100 area contractors regarding compliance with the law.
Schneiderman says more than 30 percent of contractors were found to not provide written contracts, while an additional 50 percent did not even provide the most basic contract provisions required by law. Almost none of the contractors put customer deposits into a separate account, he claimed.
Notices of violations were sent out in July to approximately 47 contractors for failing to comply with the law. The contractors then settled into agreements to do home improvement work only under written contracts that are in compliance with the law. The contractors also agreed to put all advance deposits into a customer account at a local banking institution and paid penalties and costs of up to $1,5000.