What’s in a Name?

Actually, a name can make all the difference.  Contractors are licensed in the State of Louisiana in either their personal name or the name of a company.  Before the Louisiana State Licensing Board for Contractors (LSLBC) can issue a license to a company, the company must be registered with the Secretary of State as a legal entity.  Once the license is issued, it can only be used legally by the name as it appears on the actual certificate.  Contractors are required by LSLBC Rules and Regulations, Section 109, to conduct business in their properly licensed name.  This means that bids must be submitted in the name as it appears on the license.  Likewise, contracts must also contain the properly licensed name.  To do otherwise is a violation which subjects the contractor to a fine, suspension or revocation of license.  An awarding authority should reject any bid that is not in the properly licensed name of the contractor even though the contractor may have a proper license with another name on it.

If you are licensed in your personal name, you may submit bids using a DBA (“doing business as”) as long as the properly licensed name is used.  For example, if I am licensed as Bob Smith, I must bid as Bob Smith, but may legally add Bob Smith DBA Smith Construction.  However, to submit a bid as Smith Construction would be a violation.  In this scenario, the contractor risks losing the job and being fined by the Board.

Doing business in your properly licensed name means just that, your bids, contracts, invoices and even your signage should all reflect the name as it appears on your license.

“Properly licensed and qualified contractors……It’s the Law!”

For any questions or further information, please visit our website at www.lslbc.louisiaana.gov or contact us by phone a at 225-765-22301 Ext. 2213 or send an email to newslettter@lslbc.llouisiana.goov

BULLETIN: 11-08

August 15, 2011

Trust, but Verify

On his desk in the White House, President Truman had a sign that famously stated, “The Buck Stops Here”! As a state licensed contractor, you should be aware that the law holds you accountable to contract exclusively with properly licensed contractors.  According to La. R.S. 37:2158A(4), the board may revoke, suspend, refuse to renew a license, or issue cease and desist orders to stop work, or debar a person or licensee for “entering into a contract with an unlicensed contractor involving work or activity for the performance of which a license is required…”

This prohibition not only applies to subcontractors that you may hire, but also to contractors that hire you. Even though you may not actually sign a contract, to verbally agree to perform work for an unlicensed contractor for a fee would still be considered a violation. Contractors found in violation of this statute may be subject to a maximum fine of $1,000 plus $500 court costs, as well as possible suspension or revocation of their contractor’s license. The unlicensed contractor is liable to the State Licensing Board for up to 10% of the value of his contract plus court costs, and will, in most likelihood, be removed from the project.

Don’t take a chance on unnecessary delays on your project, or put your license at risk. Take the time to know the status of contractors that you are working with.  Our website provides easy access for current information on all state licensed contractors.

If you still have any questions, contact the Compliance Division at the main office located in Baton Rouge for assistance. Don’t find out the hard way that when it comes to licensing law in Louisiana, “the buck stops with you.”

 “Properly licensed and qualified contractors…It’s the Law!”

For questions or further information, please visit our website at http://www.lslbc.louisiana.gov/ or contact us by phone at 225-765-2301 Ext. 213 or send an email to newsletter@lslbc.louisiana.gov.

Have you ever tried to save a dime and wound up spending a dollar?  At times it is embarrassing, but when it happens to the largest investment you will possibly ever make, it often turns tragic.  Over the last 30 years, I cannot tell you how many times I have heard from a disgruntled homeowner…after the damage is done.  It is what some call a “Horror Story.”  I’ve heard it and I know you have, or possibly even experienced it.

Story after story, job after job, stories keep surfacing.   About one out of three calls received are from troubled buyers, dissatisfied with the results obtained by not properly vetting  the most important player in their new home or remodeling project:  The Builder.  So what can we do about this and how can we keep these unwanted results from occurring?

Recently, I was appointed by Governor Jindal to serve on the Louisiana State Licensing Board for Contractors.  This commitment, to making our industry a safer and more reputable environment in which to do business, is the goal of the board.  Actually, being able to make a difference for the industry is an honor and a way for me to give  forward to those future homeowners and builders.  Getting the “bad guys” off of the street and out of commerce is just treating the symptom and not curing the problem.  As long as there is a demand, there will be a supply.  The construction process starts with a need from a consumer and properly educating the buyer is one way of tackling the challenge.

The solution is a cooperative effort from both the building professionals and the consumers.  What are the warning signs a consumer should be wary of?  What are questions that should be asked?  Learn how to identify the building professional and the following is a quick summary:

• Proper Permitting.  The first indicator is if your project is permitted.  If you are asked to take out the permit, you become the contractor of record.  Becoming the contractor of record brings along with it the responsibilities of liability and workers compensation insurance, code compliance and OSHA regulations.  Unlicensed builders cannot pull a permit within the state of Louisiana as licensed builders are required to properly permit the project.
• Proper licensing.  The Louisiana State Licensing Board for Contractors maintains a database of contractors who are licensed.  Louisiana Licensed Builder.  Select the “Is a contractor licensed or registered?” button.  If your contractor is not on the list, ask for a license number and verify.  Contractors doing remodeling projects $7,500 or more are required to have a license.
• Proper Insurance.  Ask for general liability and worker’s compensation insurance certificates with you as the certificate holder.  This should be sent directly to you from the contractor’s insurance agent to prevent the document from being altered.  Insurance is required for proper licensing.
• Check References.  Your contractor should have many references from previously completed projects.  Ask for a list and make the calls.  Past clients will be honest and you will gain valuable information from this source.
• Continuing Education.  Proper licensing requires continuing education.  The National Association of Home Builders promotes continuing education and has created the University of Housing to administer their education curriculum.  To gain a list of builders in your area that have attained theses credentials, go to Builder Education Link  By completing 64 hours of training, a builder can receive his first designation.  Not only does continuing education demonstrate the discipline of gaining industry related knowledge, it symbolizes his commitment to the industry – a trait not found with the fly by night contractor.
• Ask for a firm contract price.  Never do “cost plus” work as it promotes two things, both not in your best interest.  First, it signifies the person or firm you are hiring is not capable of providing the most essential element of the contract, the price.  It may also show the only skill you are hiring is their ability to call and schedule subcontractors and material suppliers.  Secondly, the aim to reduce costs also reduces the contractors profit, and the motivation to save on costs is not part of this model.  New home projects should never use the cost plus method and only very complicated remodeling projects should even consider using this contracting method.
• Ask for a written contract.  If you don’t get it up front, you certainly will not get it when there is a dispute.  Make certain the contract includes a detailed scope of work and most importantly the price as defined above.  It should define the payment method and terms along with the completion requirements for final payment.
• Have the contractor sign a Lien Waiver.  This should be executed at each payment and also before the final payment.  You certainly do not want to pay for the work on your home two times!
• Ask for the warranty.  In Louisiana, the New Home Warranty Act is the base warranty for any new home constructed within the state.  Go to:  New Home Warranty Act   for a copy.  The law requires the contractor of record to produce a signed copy at closing.  Note that the warranty begins on the date of sale of the residence.  An owner building their own home is bound by this law and the warranty does not begin until they sell the home some 5 to 20 years later.

Home building should be a very exciting and pleasant experience when you use a building professional.  I hope that by using the aforementioned techniques, your venture will progress smoothly without blemish.  Should you need further building information please contact one of our home professionals at the number above.

At this point, I’m sure you are wondering what I mean by “wide open spaces.”  I’m talking about “wide, open floor plans.” Like most families, we lead a pretty busy life and when we are home — we like to be connected.  So, an open floor plan is the perfect way for me to cook dinner, the kids to do their homework and dad to catch up on the evening news…all within earshot of each other.

Kitchen opens to Breakfast Room with added cabinet storage and a window seat.

Since this series is primarily talking about remodeling and renovating homes, let’s talk a few minutes about your kitchen.  When Mike is consulting on a remodel, he is often asked about knocking down walls and taking several of the smaller rooms and opening things up.  Many of the older homes he looks at have a “galley style” kitchen, and owners want more room.  Let’s be realistic – we don’t just “cook” in out kitchens anymore…kitchens are where we live and entertain!

So, what are your options:

• take down some walls, maybe add some columns to create more space
• new cabinets or at least put new doors and cabinet knobs on existing cabinets (if they are in good shape)
• countertops – make sure you research this one…lots of options!
• how about new appliances —
• lighting is very important – both task lighting and ambiance lighting
• need space for your computer and printer? include a home tech area right next to the kitchen…monitor the kids computer activity while preparing dinner
• add an island – creates more storage and gives more  counter space

If I’ve learned one thing from working at Penn Homes, it is to think out of the box when remodeling your kitchen.  If you are going to gut your kitchen and do a total remodel, look at the space as a blank canvas.  Don’t limit yourself on where the refrigerator “used to be” or where the stove “has always been.”  Remodeling your kitchen is probably the most expensive project you will do – it’s also #1 in popularity and has the most impact on resale.  So, here’s my 1-2-3 on wide open spaces:

• Take time planning.
• Look for affordable alternatives.
• Hire a licensed contractor.

Mike Penn finds that families want to spend time together – they want to reconnect after a day of work and school.  If you are looking to remodel your home, we’d love to help with your project…or…if you are interested in new home plans, we have a large selection of floor plans that feature an open floor plan.  At Penn Homes, we want you to have a pleasant experience and love your kitchen…your new “wide open spaces.”

Now that we’ve been ‘invited’ to your home…we are happy to accept the invitation.  When giving someone directions to your home, you always describe your house.  ”Take a right on Oak Street, we live in the second block, third house on the right…our house is the one with ____________.”  So, what does one see when looking at your house?  What is the descriptive trademark of your home?  What’s the ‘curb appeal’ of your home?

This is one area that could be an inexpensive project for your home and would have an immediate impact.  It could be as simple as a new coat of paint, a new front door and maybe some shutters, or it could be an exterior project with an interior impact.

First, the simple project.  Many times we are asked if we would do something as simple as replace a front door and some rotten wood.   The answer is “Yes!  We’d love to help.”  We’d take a good look at the exterior of your home and make suggestions.  Are the columns in good shape?  What about the shutters – do they need painting, are they the right size shutters for your windows, does the shutter fit the style of your home?  Are the flower beds or shrubs compromising the integrity of the foundation?

"Before" - the owner wanted a new look for her bungalow

Next, let’s take a look at an exterior project with an interior impact.  ”Recently, I was asked to consult on a project where the owner wanted to update her exterior, but she had an interior problem.  She didn’t have enough closet space” said Mike Penn. After measuring and sketching, Mike had the following solution.  ”We were in luck, the Master Bedroom faced the front of the house.  It was a pretty easy fix — she had enough room between the front door and an existing window to extend the front porch which allowed for a nice sized closet addition into the Master Bedroom. Then, the front of the house could be re-faced with stonework, shutters and a new front door.”

Penn Homes Sketch

Mike recommended a combination of products to create a focal point that added historic strength to the home.   The use of cultured stone and cedar beams from an old sugar mill gave a distinct look that was also durable and weather resistant.  Additionally, he recommended adding a Bevolo gas fixture for ambiance and additional lighting.  The owner had a great looking house with fantastic curb appeal while solving her interior problem of inadequate closet space.  A simple solution the owner could afford yet couldn’t visualize without the help of a professional builder like Mike Penn.

These are the type things Penn Homes has to offer.  We’d look at your project – then make recommendations based on what you were interested in investing in your home.  Mike Penn would break them down into the things necessary and those things which are optional, yet would add value to your home.  We would help you determine the cost of the project and work out a construction schedule to suit your family’s needs.

Curb appeal is what makes someone want to see the inside of your home and we’d love to help.  Can’t wait to hear from you.

Our children in the Courtyard. Justin Penn, center, is a Project Manager at Penn Homes.

At  Penn Homes, we consider it an honor and privilege to be invited into your home.   What do I mean by ‘invited’ into your home?  You know…’invited.’ Invited to come and look at your home to discuss remodeling, renovation or a home addition.  I get an adrenaline rush when I walk in the front door — endless possibilities.  I love it!  Mike is the more analytical one who can turn the dream into reality, but I love the creative side.

For the first 15 years of our marriage, Mike and I lived in two new homes built by Penn Homes.  I loved them both, but I was interested in the challenge of taking an older home and customizing it for my family’s specific needs.  As I type this blog, I’m sitting at my kitchen table (the hub of every home) looking out a beautiful window into a koi and goldfish-filled pond.  The pond is situated in a beautiful courtyard with mondo grass nestled between blue stone pavers.  The iron fence and gate surrounding the courtyard were re-claimed from an estate down the street.  It’s the quiet place you’ll find us most afternoons after a long day at the office.  Simply beautiful…

I’ve often been asked how did we decide what to do.  What can you do to a home that gives  the most return on your investment?  What is the most value-added enhancement to a home?  How did we have the vision?  Over the next few weeks, I’ll blog about the renovation of our home and different remodeling and home addition projects for others that have been crafted by Penn Homes.  I’ll have comments from some of our remodel customers about the projects…and, hopefully, you’ll be inspired and see the potential in your home and ‘invite’ us over.

Many homeowners are surprised to learn that the equity in their home comprises a larger portion of their net wealth than the holdings in their stock market or retirement funds. Compared to conventional financial investments that rise and fall with regular frequency, housing has proven to be a relatively stable and sound investment that keeps up with inflation in most years and outpaces it in others.

Although few of us purchase a home strictly for its investment value, in practical terms it represents an asset that can pay high returns when it comes time to either refinance the mortgage or sell your home outright. Of course, a home that is well-maintained and offers up-to-date systems and amenities will have a higher value than a comparable home that is poorly maintained or lacking the conveniences and extra living space that today’s buyers want. Remodeling, then, becomes the key to protecting and enhancing the investment value of your home, not to mention its many other benefits.

“What improvements will add the most value to my home?” To answer that question, it is important to understand that remodeling – and your home for that matter – is different from other investments that are primarily financial in nature. What’s unique about housing is that the “investor” or owner receives the immediate benefit of being able to occupy and enjoy their investment; i.e., live in it, all the while it is growing in value. Stocks and bonds don’t deliver on this aspect.

The longer you intend to stay in your home and will enjoy the new family room or whatever improvement you make, the more weight this factor contributes to your overall return on investment.

The other part of your investment return is the increase in resale value that the remodel adds to your home. Ultimately it is a professional real estate appraiser who will decide the financial return of any remodeling you do through the price he or she assigns to your home when you decide to refinance your mortgage or sell your home. The cold hard truth, however, is that real estate appraisals are more an art than an exacting science.

The price of your home will largely depend on the prices that comparable homes recently sold for in your neighborhood. The value assigned to the improvements you made to your home depends on a number of variables but depend heavily on the location of your home as well as its overall condition. Some remodeling projects lift the value of a home by the entire cost of the remodel and sometimes by even more.

Despite the limitations of the appraisal process in allotting what you might consider fair value for all the improvements that you proudly made to your home since first moving in, there are certain rules that you should consider to increase the dollars you get back from your remodeling investment.

• Maintaining your home in good repair is the most critical of all investments that you can make to your home. The shape it’s in matters as much if not more than what other attributes your home may have.

• The quality of the work you have done on your home is another factor that can’t be ignored, if you are looking to make a good investment. Shoddy workmanship, low-grade materials and inferior products will wipe out any value the remodeling might have added to your home.

• Remodel for yourself and your own family, not the next owner. It is a gamble to predict what the likes and dislikes of the next owner might be. Keep in mind, however, the more your tastes stray from the norm of most of your neighbors, the less likely you are to get maximum return from your improvements. Stay with styles, colors and features that have broad appeal.

• Kitchens and bath remodels are the two most popular remodeling projects year-in and year-out, no matter where you live. Minor kitchen remodels tend to recoup more of their costs than major kitchen remodels. Bathroom remodels also vary on how much they add to resale value, depending on the extent of the makeover. These two rooms carry the most weight when it comes time to sell your home. Attractive kitchens and baths fully outfitted with popular features will not only help sell your home faster, they also can drive the price a buyer is willing to pay for your home.

• Extra space in the right place offers a high rate of return since existing homes tend to lack the roominess of new homes. New family rooms, larger master bedroom suites and eat-in kitchens are all examples of spaces that most buyers value highly.

Although it is difficult to put an exact price on the resale value of a particular remodeling project, for most of us the real value of remodeling is the comfort and pleasure it adds to the years we spend living in our home.

Why remodel?

Remodeling your home can modernize the style, make it more comfortable, improve energy-efficiency and home functionality, increase the value of your home, and help with upkeep and maintenance. Remodeling is a sure investment in your home to ensure longevity, usefulness, and home value.

When is it time to remodel?

Perhaps it was that moment when you realized that avocado green and harvest gold are no longer the “in” colors for today’s trendy kitchens. Or maybe you had an epiphany one day as you stood in line to use your own bathroom. Whatever the impetus, the thought has crossed your mind: Maybe it’s time to remodel . . .

If you decide to follow through on that thought, you’ll join millions of others who decide to remodel their homes each year. The reasons for remodeling are as varied as the projects we undertake. Some of these include:

• Adding more space.
• Upgrading cabinets, counters, appliances, and fixtures.
• Creating a floor plan that’s customized for your lifestyle.
• Improving energy efficiency with new windows, doors, insulation, and climate control systems.
• Increasing the resale value of your home.

What are some remodeling ideas?

Before you head too far down the remodeling path, it’s a good idea to think through your wants and needs:

• Decide what changes you want to make.
• Ask yourself and other family members what you like and dislike about the house, then create a prioritized list.
• Look at magazines and collect pictures of what you like.
• Think about traffic patterns, furniture placement, colors, lighting, and how you want to use the remodeled space now and in the future.

How do I plan a remodel?

The first step is to develop an idea of what you want to do. Write a prioritized list of your needs and wants. Look at magazines and Web sites and collect pictures of what you like. The more clearly you can envision the project and describe it on paper, the better prepared you’ll be in making your decision.

Think about traffic patterns, furniture size and placement, colors, lighting and how you expect to use the remodeled space. If your decision to remodel involves creating better access for someone with limited mobility, you may want to consider contacting a Certified Aging-in-Place Specialist.

Figure out how much money you have to spend on the remodeling job, furnishings, landscaping or any other cost you might incur.

If you’ve decided you want to hire a remodeler, learn how to choose a professional, avoid contractor fraud, and make your dream home reality.

How do I pay for a remodel?

One of the most important considerations for your home improvement project is financing. After all, the project will go nowhere if you can’t pay for it.

Fortunately, there are several options that can provide the dollars you need. Four of the most common are a home improvement loan, a home equity line of credit, a home equity loan (second mortgage), and a cash-out refinancing of your current mortgage. However, the simplest method of financing is cash.

How do I find a professional remodeler?

When you hire a remodeler, you are buying a service rather than a product. The quality of service the remodeler provides will determine the quality of the finished product and your satisfaction with the result. To ensure your satisfaction, make sure you hire a qualified, professional remodeler.

Look at the How to Hire a Professional Remodeler resource page for tips, questions to ask potential remodelers, qualities to look for in a remodeler, and a searchable directory to find a professional remodeler in your area.

What should I expect during the remodel?

While remodeling can be an exciting process, it can also present unexpected challenges. Many problems can be avoided by planning ahead.

As summer approaches, many home owners grow eager to start remodeling projects to update and refresh their surroundings. Before getting started, it’s a good idea to hire a professional remodeler for a workable plan and better results, according to Mike Penn, Owner of Penn Homes.

“A professional remodeler knows how to translate a home owner’s dreams and budget into a beautiful reality,” said Mike Penn. “They have the expertise and skills to satisfy a customer while keeping the budget in check.”

Here are five tips for planning a successful home remodel that you can enjoy for many years to come.

1. Compile a list of home remodeling ideas and draft a budget for the work.
You likely have some projects in mind, such as modernizing the bathroom, renovating the kitchen, replacing windows or repairing the roof. Prioritize your wish list: Maybe you don’t have the budget for your dream remodel, but professional remodelers can maximize your dollars by doing the work in phases, suggesting budget-friendly products and materials, and implementing creative design solutions.

2. Look for a professional remodeler to help plan the project.
Start by searching NAHB’s Directory of Professional Remodelers at www.nahb.org.remodel. You’ll get a list of nearby remodelers to contact. Asking friends and neighbors for names of qualified remodelers will also help you find a match for your project.

3. Check the references and background of the remodeler.
After you start speaking with remodelers and find one or two who match your project’s needs, be sure to conduct some background research by checking with the Better Business Bureau, talking to their references, and asking if they are a trade association member.

The Louisiana State Licencing Board for Contractors is an excellent place to verify if a contractor is licensed in our state. Remodelers with these qualities tend to be more reliable, better educated, and more likely to stay on top of construction and design trends. http://www.lslbc.louisiana.gov/findcontractor_name.htm

4. Agree on a contract.
Talk over the details of the home remodeling project and begin reviewing the contract. You’ll want to check the remodelers’ insurance coverage, ask about any warranties on their work, know who is responsible for obtaining any building permits, and understand the process for making any change orders after the contract is signed. Make sure that you and your remodeler see eye to eye before you sign on the dotted line.

5. Take advantage of the energy efficiency tax credits.
If your remodel includes replacing windows or doors, adding insulation, installing new roofing, upgrading heating or air-conditioning units, updating the water heater, or installing energy generating products (such as solar panels, heat pumps, or wind turbines) then you can take advantage of federal energy efficiency tax credits through 2010 that will help defray costs and maximize your remodeling budget while reducing home energy bills. (Learn more at www.nahb.org/efficiencytaxcredit.)

Whether you’ve lived there for five months or 15 years, it’s not uncommon to find that you are delighted with your home — with one or two nagging exceptions. You’d really like to remodel, but the project often gets pushed to the end of the “to do” list, because it’s either too expensive or too inconvenient to be without a kitchen or bathroom for an extended period of time. Still, let’s face it, the harvest gold kitchen, worn carpeting, or the cracked bathroom tiles have got to go.

In many cases, the reason your home may feel inadequate is that the average American house was built in the 1960’s and is now pushing forty or fifty. In a sense, your home is in the throes of a mid-life crisis, and it’s up to you to address the situation with some remodeling. And, with interest rates at historic lows, there’s no better time to take advantage of home equity financing to fund your project.

Your first steps are to determine how much money you can spend and to define your vision of the completed project. Working with a professional designer will help ensure your vision comes to life and will prompt you to define your goals. For example, do you want an innovative new design, or are you striving for functionality?

If you’re having trouble getting started, there’s help. “Remodeling Your Home” offers valuable hints on how to set priorities, remodel within a budget, understand a contract, and apply for permits. In order to “avoid sticker shock” author Carol Davitt suggests hiring a design-build firm, which will significantly enhance communication between the designer and subcontractors. Using a design-build firm also will help you cut down on costs, and many companies will rebate a portion of the design fee, if you end up signing a construction contract with them down the road.

When interviewing remodelers for your project, asking several key questions may enable you to save money. If you’re adding windows, see if you can use snap-in window grilles instead of windows with true divided lights. This could save you up to $200 per window. Need new flooring?  Find out if you can substitute seamless vinyl for ceramic or unglazed tile; or if you can swap hardwood floors for carpeting.

Remodeling is a dirty business, and you may find yourself without the comforts you take for granted, such as hot water or a flushable toilet. When signing a contract to improve any room of your home, assess the capacity for makeshift spaces. You may find the disruption easier to weather if you can carve out room for a small refrigerator and coffee pot, while your kitchen is out of commission. If not, you may want to consider a temporary move to save both time and money. Moving out entirely also will speed up the remodeling process by allowing workers to forgo the meticulous nightly clean up.

Whether your remodeling project is large or small, it’s important to carefully think through your options and talk to several remodelers before you get started. “Remodeling Your Home” provides home owners new to the process with helpful hints ranging from choosing a remodeler who is a member of NAHB Remodelers to writing a proper change order — and everything in between.

“Remodeling Your Home” is available from BuilderBooks, the publishing arm of the National Association of Home Builders (NAHB). Contact the NAHB BuilderBooks store at 800-223-2665 or visit www.BuilderBooks.com to order.