Indianapolis cracks down on unlicensed contractors
John Mack (right), supervisor of building inspections for the Indianapolis Department of Code Enforcement, issues a ticket to Gary Jackson of G&L Electric. (Photo by Meranda Watling)
Problems started almost immediately after Angie’s List member Lixuan Tackett says she hired Gary Jackson of G & L Electric in Indianapolis to perform electrical work on a foreclosed home she purchased. “I hired him for electrical work, and then he said he’s a contractor and can do all sorts of things,” the Indianapolis resident says. She agreed to hire him to do various projects, ranging from putting in new electrical outlets to plumbing repairs. “It needed all kinds of work.”
But the new tub surround he put in inexplicably fell off, she says, and he incorrectly installed plumbing for the water heater, leaving the house without hot water. Tackett ended up with a lengthy list of repairs that she hired other companies to do after Jackson stopped answering his phone. “He’s just very, very unprofessional,” she recalls. “It was a nightmare.”
During an undercover sting operation conducted last week by the city’s Department of Code Enforcement and the Indianapolis Metropolitan Police Department, Jackson and four other unlicensed contractors received an unpleasant surprise when they showed up to bid on a “staged job” to do electrical and HVAC work at what turned out to be a city-owned property in Fountain Square. Instead of bidding on a job for a young couple buying a foreclosed property, licensing officials cited the contractors with a $250 ticket for unlicensed contracting work. The other contractors included: Robert Goodbar of Goodbar Mechanical Heating & Cooling; Matt McGowen of McGowen Electric; Rick Adams of Lifetime Electric; and Todd Nunn of Phenomenunn Electric, all of Indianapolis.
To inform members, Angie’s List added a license citation recipient notice to the profiles for G & L Electric and for Goodbar Mechanical Heating & Cooling. The notice means these companies will be withheld from category searches until they’ve obtained required licensing. The other contractors who received tickets are not currently on the List, but a notice was added to their profiles in the event a member submits a report.
The code enforcement officials posing as the young couple contacted several unlicensed contractors — identified with help from Angie’s List and other local organizations — to bid on the work. Eight contractors agreed to an appointment over the phone, but two failed to show and one texted to cancel — telling “the client” he’d learned he needed to be licensed and couldn’t perform the work. It’s likely he was tipped off about the sting, says Kate Johnson, spokeswoman for the code enforcement office.
“When you talk about the electrical and mechanical systems, those are things that impact the safety of your house,” says Adam Collins, the city’s administrator of license and permit services. “A license is hugely important, and a lot of people take it for granted. But we’ve had a number of people who’ve had traumatic experiences with guys who don’t pull permits and won’t come back and fix it.”
When a contractor obtains a required trade license, it typically means they’ve passed competency tests and provided proof of insurance or bonding, and often both. Even mandated registration usually offers at least one or more of these consumer protections. Angie’s List expects contractors to be in compliance with any law or regulation governing their trade and considers noncompliance to be an indication they may not follow other quality work standards.
Tackett says she had no clue Jackson worked without a license when she hired him in April 2010. “I never asked him,” she says. “I just assumed he’s licensed.”
Plumbing, water well drilling and water well pump installers are the only trades licensed by the state of Indiana. However, some area cities, including Indianapolis, adopted additional licensing and registration requirements. In the city, electrical, wrecking, heating and cooling, and general contractors performing construction must obtain a license. This requires paying a fee — $247 for a business or $377 for an individual — and specific training related to the trade. State-licensed plumbers must also register to work in Indianapolis, which costs $151.
Subsequent offenses for working without a contractor’s license within 12 months of the first offense results in a $1,000 fine, Johnson says. If a contractor continues working without a license, the city can seek a permanent injunction against him in court. Johnson says her department’s issued 16 tickets, including last week’s sting, since the fines went into effect in August 2010.
Collins says it’s difficult to find and stop unlicensed contractors because his office must catch them in the act of working without a license or receive complaints about them. Playing the role of husband in the sting, John Mack, supervisor of building inspections for the code enforcement department, says Jackson told him on the phone, “I’m licensed, and yeah, I can get permits.” But to get a permit, contractors must be licensed, bonded and insured, Mack says.
Jackson told the ticket-issuing city officials, “I’m not paying it,” but declined to speak to reporters. He also faces additional legal problems. IMPD Sgt. Bill Carter says LaPorte County officials issued a warrant in October 2008 for Jackson’s arrest on a charge of check fraud. However, IMPD did not arrest Jackson at the Fountain Square home because the warrant can only be executed within 70 miles of LaPorte County, Carter says.
Several of the ticketed contractors offered a similar excuse for operating without a license: They’re able to pull permits for work under someone else’s license, such as an employee. Goodbar told Angie’s List Magazine that he’s been in business since 1992 and always believed he was following the law because he has an employee who’s licensed by the city. Goodbar says he plans to contact his lawyer to determine what he needs to do, beyond paying the $250 fine. “There’s no way I had any idea we’re doing something illegal,” he says. “Otherwise, we wouldn’t be doing it. I’ve been working off of someone’s license for years.”
When asked for the employee’s name to confirm licensing, Goodbar said he didn’t know the person’s last name. “If I have to get a license, I will,” he says. “I can still work outside of Marion County, so it’s not going to shut me down.”
McGowen, owner of McGowen Electric, says he works primarily in Hendricks County, which he claimed doesn’t require licensing. However, that county requires contractors to register and provide proof of insurance and a bond. He also admitted that he knew he needed a license to work in Indianapolis but he was just trying to make money. “I’ve got people who can get me a permit,” he says. “That’s how it goes when you don’t got a license.”
Using someone else’s license to pull permits poses a risk for the homeowner and the license holder, Mack says. “Those licensed contractors can have their licenses suspended or revoked,” he says. The city code allows only a full-time employee working under a licensed contractor’s supervision to pull a permit without his own license. It leaves the homeowner at risk, too, Collins says, because they’d have no recourse in the event something went wrong and homeowners’ insurance may not cover damages if a fire resulted from work completed by an unlicensed contractor.
Collins says his department wants to inform consumers and contractors about the legal requirements. “Our goal is to identify bad actors and let the community know what’s expected,” he says.
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The Angie's List stance on licensing
Angie’s List asks service providers on Angie's List to attest in writing to their compliance with trade licensing laws. When our Trade Licensing Department identifies potentially unlicensed contractors, we send “under investigation” letters asking them to provide evidence they hold the required license, that the work they do doesn’t require a license or they’re applying for the required license. If they agree to obtain the required license(s), they enter our licensing compliance program. Companies that fail to respond appropriately to our license investigations, fulfill the terms of the compliance program, or have a “No” license attestation are removed from category searches, and a notice is added to their record to inform members. When a regulatory agency notifies Angie’s List that they’ve cited a company for unlicensed contracting work, we also add a notice to their record.