For some 40 years, in an effort to protect homeowners against fraudulent and abusive practices by a variety of home-improvement contractors, the City of New York has required that people engaged in the "home improvement, remodeling and repair business" be licensed. [New York City Administrative Code section 20-385]
The regulation defines "home improvement" as
the construction, repair, replacement, remodeling, alteration, conversion, rehabilitation, renovation, modernization, improvement, or addition to any land or building [including cooperative and condominium units] ... which is used or designed to be used as a residence or dwelling place and shall include but not be limited to the construction, erection, replacement, or improvement of driveways, swimming pools, terraces, patios, landscaping, fences, porches, garages, fallout shelters, basements, and other improvements to structures or upon land which is adjacent to a dwelling house.[New York City Administrative Code section 20-386(2)]
While a quick read of this definition would lead one to believe that contractors would need to be licensed in all instances, the regulation does carve-out a few exceptions. Of particular relevance to this analysis, is the following language in the law:
"'Home improvement' shall not include ... the construction of a new home or building ...."
In a case reported in the New York Law Journal on Wednesday, April 12, 2006, (page 19, column 3), the Honorable Alan Saks of the Bronx County Supreme Court was asked to decide whether a property owner could object to paying an unlicensed contractor when the agreement was to demolish an existing residence and replace it with two new homes. According the Judge's decision in Marciano Construction Corp. v. Stout,
It is uncontested that the contract between the parties called for the total demolition of an existing home and the construction of two new homes on defendants' property. Moreover, it is undisputed that neither of the two new homes utilized what had been the foundation of the demolished house. As such, the contract here sued upon falls within the new-home exception to the rule that requires a contractor to have a valid home improvement contractors' license in order to enforce the contract.
Maybe the next time this property owner is contemplating an "extreme makeover," he may want to try giving Ty Pennington a call?
[Note: The City's law includes within its licensing ambit those involved in the "installation of central heating or air conditioning systems, central vacuum cleaning systems, storm windows, awnings or communications systems," but exempts "painting or decorating of a building, residence, home or apartment, when not incidental or related to home improvement work ...." (New York City Administrative Code section 20-386(2))]