NUMB:
970129
VERS:
SUBSTITUTE 4
REF:
XXBY:
ALD. BUTLER
TITL:
A substitute ordinance relating to home improvement contractors and salespersons.
SECS:
81-60-1 am
81-60-2-b am
81-60-2-c am
95-14 rc
ANLS:
- Analysis -
Beginning January 1, 2000, this ordinance modifies the current regulations and licensing requirements for home improvement contractors and salespersons as follows:
1. Contractors and salespersons must perform work in a workmanlike manner that meets industry standards and must complete work by the completion date in the contract.
2. Objections to license applications can be made by the police department, common council members and any other persons. Whenever there is such an objection the application is referred to the utilities and licenses committee. Notice of each license application is given to the police department and the state department of agriculture, trade and consumer protection (DATCP).
3. A license may be denied, suspended or revoked when the applicant has violated a relevant provision of the state statutes or administrative code, has not complied with an DATCP order or agreement or has received repeated DATCP warnings.
4. Applicants for new licenses must provide documented evidence of home improvement work experience or training, which may consist of consumer statements and photographs. For corporate applicants, the evidence must be provided for supervisory workers and workers who are unsupervised.
5. A contractor is specifically made responsible for the acts of the contractor's salespersons and may be subject to penalties for violations committed by salespersons.
6. The ordinance clarifies that a salesperson's license may only be issued to an individual and a contractor's license may be issued either to an individual or to a corporation or other business entity.
7. The ordinance clarifies that a person that contracts for home improvement work and then subcontracts all or part of the work must be licensed as a home improvement contractor.
8. The amount of the bond that must be posted is increased from $1,000 to $5,000 to conform to changes in state statutes.
9. The ordinance deletes a prohibition against advertising that a contractor is licensed. The prohibition is replaced with a requirement that any advertising that refers to a contractor's license must also include a statement that holding a city license does not mean that the city guarantees or recommends the contractor.
10. The ordinance includes common council findings.
11. The term "salesperson" replaces "salesman" and "license" replaces "certificate."
The ordinance makes no fee changes and retains all other provisions of the current ordinance, including the existing, detailed regulations of financial arrangements, disclosure of information to customers and misrepresentation.
BODY:
The Mayor and Common Council of the City of Milwaukee do ordain as follows:
Part 1. Section 81-60-1 of the code is amended to read:
81-60. Home Improvement Contractor's or [[Salesman's]] >>Salesperson's<< License. 1. Each home improvement contractor's or [[salesman's]] >>salesperson's<< license shall be issued for a 2-year period and shall expire on February 28 in odd-numbered years.
Part 2. Section 81-60-2-b and c of the code is amended to read:
2.
b. The fee for each new [[salesman's]] >>salesperson's<< license shall be $30.
c. The fee for the renewal of each [[salesman's]] >>salesperson's<< license shall be $18.
(See s. 95-14.)
Part 3. Section 95-14 of the code is repealed and recreated to read:
95-14. Home Improvement Contractors and Salespersons to be Licensed.
1. LEGISLATIVE FINDINGS. The common council finds that:
a. In order to protect homeowners against unscrupulous home improvement contractors and salespersons, the city of Milwaukee should rigorously scrutinize the competence and activities of home improvement contractors who perform work for Milwaukee homeowners.
b. Contractors who perform shoddy work and are dishonest with homeowners create serious financial and emotional damage to their customers who live in Milwaukee, and may unfairly create a negative reputation even for honest home improvement contractors who perform competent work and abide by state and local laws.
c. Some contractors fail to obtain needed permits or engage in practices rendered illegal by state law or regulation, particularly those provisions of the Wisconsin administrative code that deal with home improvement contractors and basement waterproofers, Wis. Adm. Code chs. ATCP 110 and 111.
e. Some contractors that have been repeatedly warned by the Wisconsin department of agriculture, trade and consumer protection about their business practices may continue to do business in Milwaukee.
e. This section will require shoddy and dishonest contractors to risk losing their Milwaukee home improvement contractor licenses and salesperson licenses if they engage in prohibited shoddy, illegal or dishonest practices in the city of Milwaukee.
2. DEFINITIONS. In this section:
a. "Contractor" means any person engaged in the business of home improvement work, and includes any person who enters into a contract with a consumer for home improvement work and subcontracts the performance of all or part of the agreed-upon home improvement work.
b. "DATCP" means the Wisconsin department of agriculture, trade and consumer protection.
c. "Home improvement work" means installing, repairing, servicing, improving or remodeling any permanent installation or improvement attached to an existing home or building used for residence purposes but not exceeding 6 living units, any accessory buildings or appurtenance thereto and any sidewalks, driveways or other approaches to such building. The term includes but is not limited to roofing, walls, siding, windows, doors, floors, partitions, ceilings, porches, awnings, heating, furnace cleaning, air conditioning, chimneys, water softeners, humidifiers, purifiers, electrical installations, plumbing installations, concrete work, painting, sheet metal work and other construction, installation, maintenance and repair.
c. "Key worker" means an individual who performs work without direct supervision on behalf of a home improvement contractor or who directly supervises other individuals who perform work for a home improvement contractor.
d. "License committee" means the utilities and licenses committee of the common council.
e. "Person" means an individual, firm, partnership, corporation, association or other entity.
f. "Salesperson" means an individual who solicits or sells home improvement work at any place within the city, other than within a building or structure used as a place of business. The term does not include a person performing emergency services requiring the installation of parts where the total cost does not exceed $100.
3. EXCEPTIONS. This section does not apply to a company or industry regulated under ch. 196, Wis. Stats., or to any persons who are employes thereof.
4. LICENSE REQUIRED OF CONTRACTOR. A person who acts as a contractor within the city shall first obtain a contractor's license, except that a licensed master plumber licensed under the Wisconsin statutes and a licensed electrical contractor licensed by the city need not obtain a contractor's license but in all other respects shall comply with this section. Where the contractor applying for a license is a partnership or corporation, each partner and officer of the partnership or corporation shall have a salesperson's license whenever the partner or officer acts as a salesperson.
5. LICENSE REQUIRED OF SALESPERSON. An individual who acts as a salesperson within the city shall first obtain a salesperson's license, except that an individual who has a contractor's license, is a licensed master plumber licensed under the Wisconsin statutes or is a licensed electrical contractor licensed by the city need not have a salesperson's license but in all other respects shall comply with this section.
6. APPLICATION. An application for a new or renewal contractor's or salesperson's license shall be in writing on a form furnished by the city clerk and shall be sworn to by the applicant. The application shall state:
a. The applicant's name.
b. The applicant's date of birth.
c. The applicant's permanent street address. A post office box address is not acceptable as a permanent street address.
d. The name and street address of the applicant's employer.
e. Whether the applicant or any agent, officer, director, owner or partner of the applicant has been convicted of any crime, misdemeanor or violation of any municipal ordinance other than traffic violations.
f. Whether, in connection with home improvement contractor work, a DATCP special order or warning has been issued to the applicant or the applicant has given DATCP an assurance of compliance or agreement to comply and whether such order, warning, assurance or agreement has been complied with.
g. Any other reasonable and pertinent information required by the license committee, subject to ss. 111.321, 111.322 and 111.335, Wis. Stats.
7. EXPERIENCE OR TRAINING. Each applicant for a new contractor's license shall attach to his or her application documented evidence of experience or training. If the applicant is an individual, the evidence shall relate to the applicant. If the applicant is not an individual, the evidence shall relate to each individual who will be a key worker on behalf of the applicant. Documented evidence of experience or training may be any of the following:
a. The applicant's home improvement work experience, which documentation may consist of written statements from consumers with photographs of completed work.
b. The applicant's home improvement work training from an accredited educational institution.
c. The applicant's home improvement work training through a qualified apprenticeship program.
8. FINGERPRINTING. Each individual applicant and each agent, officer, director, owner or partner of an applicant that is not an individual shall be fingerprinted and have his or her picture taken. If the applicant for a contractor's license is a Wisconsin corporation, the president, vice president, secretary and treasurer shall sign the application and be fingerprinted. If the corporation is a foreign corporation, the registered agent, officer or employe whoever is authorized to bind the corporation to a contract in Wisconsin shall sign the application and be fingerprinted. If the applicant is a partnership, each partner shall be fingerprinted. Fingerprinting shall not be required for an individual who has previously been fingerprinted in connection with an application for a license under this section.
9. FEES. See s. 81-60 for the required license fee.
10. BONDS AND INSURANCE. Before being issued a license, each applicant shall file with the city clerk a performance bond in the sum of $5,000 annual aggregate of all losses and a certificate of insurance as provided in this subsection.
a. The performance bond shall be conditioned that the applicant will perform and sufficiently complete all work engaged in as a result of being granted a contractor's license and guarantee that the contractor will perform in accordance with all the provisions of this section and all other ordinances of the city. The bond shall extend for the same period for which the license is issued and shall not be canceled except on 20 days' written notice to the city clerk. The form of such bond shall be prepared and furnished by the city clerk.
b. The certificate of contractor's general liability and property damage insurance shall be in the sum of not less than $25,000 per person and $50,000 per accident for bodily injury liability and $10,000 for property damage liability, and shall require the insurer to give 10 days' written notice to the city clerk of cancellation, expiration or the insurer's intent not to renew. If such notice is not given, the insurance shall continue in full force and effect.
c. In the event of cancellation or nonrenewal of either the performance bond or the certificate of insurance, the contractor's license shall be automatically suspended. The suspension shall terminate upon presentation to the city clerk of a performance bond or certificate of insurance, as the case may be, that complies with par. a or b, respectively, and with par. d. No person shall perform home improvement contracting or solicit work as a home improvement contractor while the person's license is suspended under this paragraph.
d. Each bond and certificate shall be executed by a corporate surety or insurance company licensed to do business in the state of Wisconsin and shall have affixed thereto an affidavit of no interest.
e. Licensed master plumbers and licensed electrical contractors bonded under the provisions of chs. 222 and 225 are not required to file the bond and insurance described in pars. a and b.
11. NOTICE AND INVESTIGATION OF APPLICATION. a. Upon receipt of the application, notice of the application shall be furnished to the regional office of DATCP and the chief of police.
b. The chief of police shall cause an investigation to be made and report the findings to the city clerk.
12. COMMITTEE ACTION. a. Hearing. Whenever an objection to an application is made by the police department, a common council member or other individual, the license committee shall hold a hearing on whether to recommend granting the application. Any such objection shall be in writing and shall specify the reasons for the objection.
b. Notice. b-1. The city clerk's office shall provide written notice of the license committee hearing to each applicant whose application will be considered by the license committee. The notice shall be sent to the applicant so that the applicant has at least 4 calendar days' notice of the hearing.
b-2. The notice shall contain:
b-2-a. The date, time and place of the hearing.
b-2-b. A statement to the effect that the possibility of denial of the license application exists and the reasons for possible denial.
b-2-c. A statement that an opportunity will be given to the applicant to respond to and challenge any reason for denial and to present witnesses under oath and to confront and cross-examine opposing witnesses under oath.
b-2-d. A statement that the applicant may be represented by an attorney of the applicant's choice at the applicant's expense, if the applicant so wishes.
c. Hearing procedure. c-1. At the hearing, the committee chairperson shall open the meeting by stating that a notice was sent and read the notice into the record unless the applicant admits notice. The chairperson shall advise the applicant that the applicant has an option to proceed with a due process hearing, represented by counsel, with all testimony both direct and cross-examination under oath, or that the applicant may simply make a statement to the committee.
c-2. A due process hearing shall be conducted in the following manner:
c-2-a. All witnesses shall be sworn in.
c-2-b. The chairperson shall ask those opposed to the granting of the license to proceed first.
c-2-c. The applicant shall be permitted an opportunity to cross-examine.
c-2-d. After the conclusion of the opponent's testimony, the applicant shall be permitted to present the applicant's own witnesses, subject to cross-examination.
c-2-e. Committee members may ask questions of witnesses.
c-2-f. Both proponents and opponents shall be permitted brief summary statements.
d. Recommendation. d-1. The recommendation of the committee regarding the applicant shall be based only on evidence presented at the hearing. Probative evidence concerning whether or not the license should be granted may be presented on the factors enumerated in sub. 14.
d-2. The committee may make a recommendation concerning whether the new or renewal license shall be granted or denied immediately following the hearing or at a later date. Written notice of the committee's decision will be provided if the decision is made at a later date or if the applicant was not present or represented. The committee shall forward its recommendation in writing to the common council for vote at the next meeting at which such matters will be considered.
13. APPEAL. Any person aggrieved by the recommendation of the license committee relating to nonrenewal of a license, or suspension or revocation of a license issued under this section, may within 10 calendar days appeal to the common council by filing a request in writing with the city clerk. After the filing of an appeal to the common council, the common council shall set a time and place for hearing the appeal. Notice shall be given to the appellant at least 7 calendar days prior to the hearing date. After the hearing, the common council may sustain, modify or reverse the recommendation of the license committee.
14. REASONS FOR DENIAL OF NEW OR RENEWAL LICENSE. The license committee may recommend denial of an application for a new or renewal contractor's or salesperson's license for any of the following reasons:
a. The applicant is not of good character.
b. The applicant has not complied with the requirements and prohibitions of this section.
c. The applicant has been convicted of a violation of this section.
d. The applicant's previous license has been revoked, suspended or not renewed for any reason whatsoever.
e. The applicant's inability to substantially understand the required business regulations in this section.
f. The applicant has a recurring problem of unresolved consumer complaints that are substantially related to the circumstances of the licensed activity.
g. The applicant has been successfully sued for activities that are substantially related to the circumstances of the licensed activity and evidence of the judgment is presented to the license committee by an objector. Evidence of a judgement may be considered regardless of whether an appeal of the judgment is pending.
h. The applicant's failure in the past or refusal in the future to act in accordance with this section or with statutory or Wisconsin administrative code provisions that are substantially related to the circumstances of the licensed activity.
i. The applicant's failure in the past or refusal in the future to act in accordance with a special order of DATCP or assurance of compliance or agreement to comply made by the applicant to DATCP, where such failure or refusal is substantially related to the circumstances of the licensed activity.
j. In the immediately preceding 12 months, the applicant has received 2 DATCP warnings that are substantially related to the circumstances of the licensed activity, or has received 5 such warnings in the immediately preceding 36 months.
k. The applicant has been convicted of offenses the circumstances of which are substantially related to the circumstances of the licensed activity.
15. LICENSE. a. The city clerk shall issue a license to each applicant who meets the requirements of this section. The license shall show the number of the license, the license expiration date and a statement that issuance of the license does not constitute an endorsement of the person or product by the city.
b. If the applicant is a partnership or corporation, the license shall show the name of the partnership or corporation. If the applicant is an individual, the license shall show the applicant's first name, surname and middle initial and the photograph of the applicant. The license shall be in such form as to avoid alteration.
16. REQUIRED AND PROHIBITED PRACTICES. a. Each contractor or salesperson licensed under this section shall:
a-1. Whenever engaged in selling or soliciting business, carry the license issued under this section on his or her person and show it to any person upon request.
a-2. Complete agreed upon home improvement work by the date specified in the contract, as required under subd. 6-d.
a-3. Perform all home improvement work in a workmanlike manner that meets industry standards.
a-4. Pay all subcontractors and materialmen so that no liens are filed against the owner of the property to whom the sale has been made and furnish the customer with waivers of liens from materialmen and subcontractors within 30 days of completion of any job, except that, whenever a subcontractor or materialman's bill is the subject of a bona fide dispute in a legal action, no waivers need be furnished until the determination of that legal action. The term "legal action" includes any type of arbitration or 3rd party determination of the dispute recognized by the trade.
a-5. Furnish to the customer a copy of all written documents which the customer signs.
a-6. Before starting work of any kind, enter into a contract or firm agreement with the customer as to the price and the work to be done, provided that no written contract shall be required where the work to be done is of an emergency nature and the total cost does not exceed $100. Any such agreement shall include therein a complete statement as to:
a-6-a. The specific work to be done.
a-6-b. The material to be used, describing it by brand name, if possible, and by weight, size and color.
a-6-c. Guarantees and warranties made or represented to buyer in writing setting forth by whom guaranteed or warranted, and any and all exclusions and limitations as to cost of repair, replacement of parts, service charges and labor charges.
a-6-d. The time in which the work is expected to be completed.
a-6-e. All financing, including the initial cost, any time charges and interest, and the total cost of the work including such charges, together with the amount of payment, the time at which the payments will begin and the length of time for which they will continue.
a-6-f. A statement agreeing to restore and repair any part of the customer's property that is destroyed or damaged as the result of the negligent acts of the contractor or the contractor's agents or subcontractors.
a-6-g. The fact that the contractor or salesperson has a license from the city does not constitute an endorsement of the person or product by the city.
a-7. Whenever a contractor's advertising makes any reference to the fact that the contractor holds a city home improvement contractor's license, include a statement to the effect that holding a city home improvement contractor's license in no way means, suggests or infers that the city warrants, guarantees, endorses or recommends that contractor or any other contractor.
a-8. Obtain all permits required by any municipality in which the contractor performs home improvement contracting work.
b. No contractor or salesperson certified under this section shall:
b-1. Imply that having a city license constitutes an endorsement or recommendation of the city.
b-2. Use any false or deceptive inducements or misrepresent or falsely state to a prospective customer that the customer's dwelling or building is to serve as a "prospective buyer" lure, "model home" or "advertising job" and that he or she will be paid a commission or other compensation for any other sales the seller may make in the area and in that way lead the customer to believe that the cost of the improvement or installation will be fully paid or reduced by such commission or other compensation.
b-3. Misrepresent to a prospective customer that he or she is being given a special, introductory, confidential, close-out, factory or wholesale price, discount or any other concession or that this price, discount or any other concession is made due to materials left over from a nearby job or as a test of the local market or a market survey.
b-4. Misrepresent that anyone, whether connected with the seller or not, is especially interested in seeing that the prospective customer gets a bargain, special price, discount or any other concession.
b-5. Substitute any product or material or deliver, install or apply a product of different brand, manufacture, grade or quality from that represented by any sample, illustration or model.
b-6. Misrepresent or mislead a prospective customer into believing that:
b-6-a. Fire resistant materials are incombustible or fire-proof.
b-6-b. A product needs no periodic repainting, refinishing, maintenance or any other service.
b-6-c. A product is of a specific or well-known brand name or manufacture or that the product is nationally advertised when it is not the identical product.
b-6-d. The product meets or exceeds minimum city, state, federal or other applicable standards or requirements when it does not meet or exceed those minimum standards or requirements.
b-6-e. The product is of a specific size, weight, grade or any other identifiable character when it is not of that size, weight, grade or character.
b-6-f. The product is approved or recommended by any government agency or other applicable organizations or that such agency or organization is a user of such product when the product is not approved or used by that agency or organization.
b-6-g. The product is, or will be, custom-built or specially designed for the needs of the customer when it is not, or will not be, so designed or built.
b-6-h. The buyer need not obtain any permit, authorization or approval from any city, state or federal government agency to apply or install the product when a permit, authorization or approval is required.
b-6-i. The product will not be damaged by hail or other storm.
b-7. Give any guarantee that is not specific, clear and definite which misrepresents or leads the customer to believe that the manufacturer or anyone else is the guarantor of the product or give any guarantee except a written guarantee.
b-8. Start installation or apply a small portion of the product with the misrepresentation that it is a tryout or test, or any other reason, where in fact such installation or application is done so the seller can claim partial performance or that work has actually begun on the job and induce or force the customer into the terms of the contract.
b-9. Misrepresent or mislead the prospective customer into believing that insurance or some other form of protection will be given if the customer in any way is unable to make the payments agreed upon.
b-10. Misrepresent or mislead the customer into believing that the signing of any completion slip, financial statement, advertising agreement, contract, bond, promissory note or any other document, either before or after completion of the job, will impose no obligation upon the customer or that such signing will relieve or end some or all of the obligations of the seller.
b-11. Ask or require the customer to sign a completion slip before the installation or job is completed in accordance with the terms of the contract.
b-12. Gain entry or access into a prospective customer's home or onto his or her property by misrepresenting a governmental inspection right or duty, misrepresenting that the seller has such authority or misrepresenting that the seller is an employe of or represents a public utility.
b-13. Misrepresent or lead the customer to believe that some product or part is unavailable or that there will be a long delay in manufacture, delivery or service in order to induce or force a customer to buy a product from the seller.
b-14. Fail to disclose in advertising that the advertised price or offer does not include delivery or installation, when delivery or installation is not included.
b-15. Fail to disclose in writing all financial arrangements, interest, service fees, credit investigation costs and building or installation permit fees or that the promissory note or any other similar instrument will be placed with a financial institution for collection.
b-16. Misrepresent through the use of any picture, drawings or illustrations, scare tactics, demonstration devices or claims which threaten or imply any physical, mental or bodily harm.
b-17. Misrepresent that the seller is an employe, officer or representative of a manufacturer, importer or any other person, firm or organization or that such person, firm or organization will assume some obligation in fulfilling the terms of the contract.
b-18. Misrepresent that maintenance, service, repairs or replacement parts will be readily available within the customer's immediate trade area.
b-19. Disparage or degrade any of the seller's own advertised products or services in order to induce or attempt to induce the customer to buy higher-priced products or materials from the seller.
b-20. Misrepresent to the customer that his or her property is or will be condemned if no work is done.
b-21. Promise or give any money as an inducement for making the sale.
b-22. Represent to the customer that his or her taxes or insurance rates will or will not be affected as a result of the sale or installation.
b-23. Use a contract of any other person when not properly authorized.
b-24. File or cause another to file a false statement on an application for a city permit related to home improvement work.
c. A contractor shall be responsible for the acts of the contractor's salespersons regardless of whether the salespersons are the contractor's employes, agents or subcontractors. A contractor shall be subject to all the penalties to which the contractor's salesperson are subject, if the salesperson violates this section, including revocation of the contractor's license.
17. RENEWAL. A contractor or salesperson may renew his or her license as provided in this section.
18. SUSPENSION AND REVOCATION. The license committee may, following a hearing with the right of appeal as provided in 12 and 13, recommend to the common council suspension of a license for a period of up to 90 days or revocation of a license for any of the following reasons:
a. Conviction of a violation of this section.
b. A finding by the license committee, on hearing of evidence, that the person has violated this section but has not been convicted of the violation.
c. Conviction of a criminal statute, the circumstances of which are substantially related to the circumstances of the licensed activity.
d. Violation of an ordinance, statute or provision of the Wisconsin administrative code where such violation is substantially related to the circumstances of the licensed activity.
e. Failure to comply with a special order of DATCP or with an assurance of compliance or agreement to comply made by the applicant to DATCP, where such violation or failure is substantially related to the circumstances of the licensed activity.
f. In the immediately preceding 12 months, the applicant has received 2 DATCP warnings that are substantially related to the circumstances of the licensed activity, or has received 5 such warnings in the immediately preceding 36 months.
g. Loss of a civil suit in which the licensee was the defendant and the activities on which the case was based are substantially related to the circumstances of the licensed activity. Evidence of the loss of a civil suit may be considered regardless of whether an appeal of the judgment is pending.
h. Failure to obtain any permit required under the ordinances of the city or statutes of the state of Wisconsin, or employing persons not authorized to do any specific work as required under the ordinances of the city or laws of the state.
i. A finding by the license committee, on hearing of evidence, that the applicant knowingly made a material misrepresentation connected with his or her application for a license.
19. PENALTY. Any person acting as a salesperson or contractor without having obtained a license so to act or violating any other provision of this section shall be punished by a forfeiture of not less than $250 nor more than $3,000. On default of payment thereof, such person shall be committed to the county jail or house of correction for not less than 10 days nor more than 80 days. Each day in which any person shall operate as a salesperson or contractor without having obtained a license, after suspension of a license or after revocation of the same, shall constitute a separate offense.
Part 4. This ordinance takes effect January 1, 2000.
LRB:
APPROVED AS TO FORM
____________________________
Legislative Reference Bureau
Date: _____________________
CATT:
IT IS OUR OPINION THAT THE ORDINANCE
IS LEGAL AND ENFORCEABLE
___________________________________
Office of the City Attorney
Date: _____________________
ZDPT:
DFTR:
97191-10
CW
9/28/99