International Door & Operator Industry

NOV-DEC 2017

Garage door industry magazine for garage door dealers, garage door manufacturers, garage door distributors, garage door installers, loading docks, garage door operators and openers, gates, and tools for the door industry.

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Page 14 of 126

12 International Door & Operator Industry™ LEGAL&LEGISLATION Continued from page 11 a license through reciprocity, a dealer must still meet the requirements for licensure, and must also pay any required fees. This should be done as quickly as possible before going to the jurisdiction, to give the most time to get the application processed. The risks of not being licensed, if licensure is required, can be quite severe. In most states where licensure is required, the unlicensed practice of contracting is a misdemeanor, and can expose contractors to civil penalties as well. Florida and California, among other states, even have enhanced penalties following declarations of disaster or emergency, which make unlicensed contracting a felony. Finally, in most states where licensure is required, unlicensed contractors are legally prohibited from demanding payment, or for suing to recover unpaid invoices. Florida also prohibits unlicensed contractors from avoiding the licensure requirement by entering into a "joint venture" with a Florida company. Code Compliance! Going into unfamiliar jurisdictions necessarily requires dealers to familiarize themselves with specialized building codes. Hurricane-prone areas often have more stringent building codes for certain elements – including garage doors – to be prepared to withstand high-force winds. Those codes may even vary on a county-by-county basis. Similarly, earthquake-prone areas, including California and Alaska, have seismic-related elements in their building codes, which have been periodically updated and increased as the years go by. Learning and being familiar with the newer codes is good for your customers. A Wall Street Journal article from September of 2017 reported that the building codes implemented in Florida after Hurricane Andrew were believed to have reduced windstorm losses by up to 72%. Many of the newer homes withstood Hurricane Irma with far less damage to roofs, windows, doors, and other components than did older structures. Additionally, in jurisdictions where building permits are required for disaster repairs, familiarity with code compliance will often be directly tied to licensure requirements. Price Gouging! In most of the disaster-affected states, there are state laws in place to prohibit "price gouging" during states of emergency. In those affected areas, it is typically unlawful to sell or lease "essential commodities" at a price that grossly exceeds the average price in a period prior to the declared state of emergency. The only significant exception to the prohibition is that sellers are permitted to increase prices if that increase is attributable to additional costs incurred in security the commodity, such as when wholesale prices for the material (such as lumber or gasoline) have also increased. Under those circumstances, the retailer is permitted to pass along those cost increases, but not to significantly increase their margins. In some states, including California, the area covered by the price gouging law includes not only where the emergency or disaster occurred, but extends to other surrounding areas where resulting increased demand may occur. The California price gouging statutes are also broader than many other states, because the relevant statute covers "any repair or reconstruction services or any services used in emergency cleanup," and because the law prohibits price increases more than 10% above the pre-emergency level. This code section would likely apply to garage doors, such as after a major fire or earthquake, whereas the hurricane states in the southeast would be less likely to deem garage door replacement or repair to be an "essential" or "necessary" service. Solicitation! Another business practice that is subject to scrutiny in disaster- impacted areas is door-to-door solicitation for construction work. This sort of practice, while legal, is already looked down upon by IDA's Code of Business Conduct, and is often viewed as more of a "Bad Bob" behavior. Engaging in door-to-door solicitation in affected states can put members in financial jeopardy as well. Linking back to the issue of licensure, if a door dealer is prohibited from performing work in the area, he is also prohibited from soliciting for such work. Entering into a contract, or even offering to do work, is unlawful if the specific work requires a license. Dealers who are working as subcontractors for another company should also investigate whether the higher-tier contractor is properly licensed. Also important is that newcomers may be prohibited by law from accepting pre-payment for work. In Texas, only construction businesses who have been residents of the state for at least a year are legally permitted to demand pre-construction deposits for home repairs. Just about every state has adopted the federal standard of mandating a three-business-day "cooling off" period for post-disaster home repairs. Most of the laws call for such contracts to be required to be in writing, and to advise the homeowner that he or she has three business days from entering into the contract to cancel the agreement. California's law goes even further, by giving homeowners seven days to void a post-disaster repair contract if it was made by either home or phone solicitation. Contracts that are entered into in violation of the consumer protection laws are deemed void, and others may be voided at the option of the homeowner. Continued on page 14 "Going into unfamiliar jurisdictions necessarily requires dealers to familiarize themselves with specialized building codes. Hurricane-prone areas often have more stringent building codes for certain elements – including garage doors – to be prepared to withstand high-force winds."

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