If you’re planning to expand your remodeling operation into another state, make sure you can manage regulatory compliance and customer relations in the new location(s). Each state has registration requirements for any business to be authorized to operate in the state, and failure to meet those requirements could result in the loss of lien rights or the loss of the right to use the state’s courts to enforce contracts. Plus, contractor licensing, customer contract requirements, and the agencies that handle remodeling customer complaints can vary from state to state. Compliance obligations: First, find out your contractor’s license compliance obligations. Some states that manage contractor licensing from a state level through state agencies or specific contractor license boards have reciprocity programs that allow registered out-of-state contractors to operate under their home contractor’s license. Other states require that out-of-state contractors meet in-state license requirements.
Contract requirements: Many states’ consumer protection and home improvement acts define contract language that must be used in a home improvement contract. Other states may not specifically regulate home improvement contracts but still have consumer protection requirements for any type of consumer contract, including remodeling contracts. Certain states have state-required consumer information brochures that must be provided to any consumer entering into a home improvement contract.
Worst-case scenarios: Determine which regulatory agency manages contractor-customer complaints in the new state. Knowledge of and compliance with these regulatory obligations will help assure your smooth transition.
—Attorney Richard Feeley is president of Feeley Mediation & Business Law, which provides legal solutions for remodelers.