Wednesday, November 16, 2011

When the EPA Comes to Call

I received a call last week from a home contracting company in the Midwest about a franchisee who had received a letter from the EPA.  They were advised that a representative would be coming to their offices or the job site to review their procedures under the Renovation, Repair and Painting Rule.  Given that the federal fine can be as high as $37,500 per day, per infraction, they were quite concerned about how to handle this visit and avoid any problems.  I advised the following:

1.  Establish whether your work is covered.
   a. Is renovation work being done on pre-1978 homes?
   b. Does the work disturb at least 6 interior sq. ft. of paint or 20 exterior sq. ft.

2.  Put together a loose-leaf notebook with your certified firm and certified renovator certificates.  Include any  initial course completion certificate and the most recent refresher course completion certificate.

3.  Have a file for each homeowner with an acknowledgement that the Renovate Right booklet was received by the homeowner.

4.  Maintain documentation to show that the certified renovator was on site during posting of signs, work-area containment and cleaning verification.

5.  Demonstrate that on-the-job training was provided  to other workers (who have not taken the certified renovator training course) on the lead safe work practices to be used in performing their assigned tasks.

6 Ensure that the work practices are being followed, including maintaining the integrity of the containment barriers and ensuring that dust or debris does not spread beyond the work area.  Take pictures to provide evidence that the rules were followed!

7. When requested by the party contracting for renovation services, must use an EPA recognized test kit or
must collect paint chip samples, submit them to an EPA-recognized laboratory, and obtain test results from the laboratory to determine whether components affected by the renovation contain lead-based paint.
(For more information regarding test kits call the National Lead Information Center at 1-800-424-LEAD
(5323), or check our web site at www.epa.gov/lead/pubs/renovation.htm).  Note: you must assume leadbased paint is present for housing and buildings covered by this rule, unless testing is done that determines
the components affected are lead-free.

8. Show that the certified renovator was available, either on-site or by telephone, at all times the renovations were being conducted.

9. Keep documentation of the  project cleaning verification.

All documents must be retained for three years following the completion of a renovation.
Records that must be retained include:
Reports certifying that lead-based paint is not present.
Records relating to the distribution of the lead pamphlet.
Documentation of compliance with the requirements of the Lead-Based Paint Renovation,
   Repair, and Painting Program.  This information must also be given to the owner and, if different, the
occupant of the housing or unit that was renovated (EPA has a sample form that is available at
   www.epa.gov/lead/pubs/samplechecklist.pdf)

Thursday, November 10, 2011

When the Homeowner Cuts Corners

I have encountered a new issue in home renovation projects that should put contractors on alert. Perhaps it is even time for a new contract clause.  I assume this is due to the state of the economy and the widely available access to information on the Internet, but homeowners are taking their construction into their own hands.  In one situation, the homeowner insisted on buying her own fixtures at a well-known hardware chain and asked the contractor to back the allowances out of the contract price.  In another, the contractor was told which personnel were acceptable on the job and was presented with a never-ending punch-list.

In both situations, the outcome was the same; contractors were seeing their profit margins dramatically reduced. What to do?  As always, the responsibility for educating the homeowner falls on the contractor.  The homeowner needs to understand that the budget should allow for at least a 10% increase over the contract price as a result of unanticipated change orders.  In addition, I strongly recommend that contractors build in a cushion into their pricing and that they mark up all supplies and labor.

You may think you are doing the homeowner a favor by passing on items at cost, but you are not allowing for overhead and other costs.  The homeowner must understand that the contractor has a relationship with his suppliers and will have more control over quality, timing of delivery and installation of fixtures if he arranges for the purchase of these items.  For that reason, I am considering including a clause in my contracts that states that the homeowner may not start bargain-hunting for supplies.  I already include a disclaimer for owner-supplied materials, but perhaps it is time to insist that homeowners stop micro-managing the process.  Or, alternatively, perhaps the contractor should insist on a mark-up if the homeowner wants to buy his own materials.

Finally, the homeowner needs to be taught what is an appropriate punch-list item and what is not.  I have a lengthy description in my contracts about what constitutes punch-list, latent defect and warranty items.  There should be a time limitation for identifying punch-list items and having them addressed.  Projects need to end.

These situations are remarkably similar to parenting.  Contractors need to set limits with their clients and define the scope of the relationship in addition to the scope of the work.  After all, they need to be able to earn a living!