Faux finishers frosted at influx of unlicensed and illegal competitors

Contractors specializing in faux finish decorative painting, plaster and wallpapering are finding their field inundated by unlicensed upstarts able to undercut prices and win bids.

Their gripe: contracting without a license is against the law. But there's not much they can do about it.

Licensed contractors Mark and Lesley Sexton, owners of Renderings, a faux finish decorative painting company in Reno, are frustrated at the Nevada State Contractors Board's lack of responsiveness to what

they call "the spate of unlicensed contractors in northern Nevada."

They've gone so far as to track unlicensed faux-finish painters who advertise their services and give the information to the contractors board.

But they say not much is happening, and unlicensed painters continue to flourish.

"In these lean economic times, we had hoped that the established, professional, experienced businesses would survive and the 'dabblers' would not be able to compete," says Mark Sexton.

"Instead we've found that the weaker players are not burdened with the expenses of licensing, worker's comp insurance, state unemployment insurance, MBT tax, and use tax, nor are they encumbered by the board's rules of advertising and contracting."

The contractors board, however, says it doesn't have much power to get unlicensed contractors out of the business.

The board issues citations which either require payment of a fine or set a court date when it discovers a contractor who is working without a license, says Art Nadler, public information officer for the board.

Should the unlicensed contractor simply ignore the fine or fail to show up for the court date, a court warrant is issued. Some offenders are discovered if the unlicensed contractor is pulled over on a traffic violation, when the warrant will pop up on a computer display in the police car.

Or the Washoe County Sheriff can decide to deploy officers to hunt down the unlicensed faux finishers.

Adding to the difficulty of enforcement, says Nadler, "Unlicensed contractors are always moving around."

The minimum mandatory punishment for a misdemeanor charge of contracting without a license is two days in jail or a $1,000 fine. But judges may suspend the sentence.

Another headache, Sexton says: The State Contractors board implemented a handyman exemption as directed by the Legislature that allows unlicensed contractors to work on projects that don't involve plumbing, electrical, heating or air conditioning and don't involve a bid of more than $1,000.

When the board ran a sting on one of Sexton's unlicensed competitors, he complains, the competitor's bid was found to be in the thousands of dollars.

"Yet that unlicensed 'muralist' is still competing with my business," he says.

At the state contractors board, says Nadler, "We investigate every complaint. But there is not a cookie cutter resolution. Every case is different." He says people who aren't satisfied with a decision by the board can file a new complaint and ask for a re-hearing.

Sexton's company, Renderings, received a warning letter from the board a few years back, telling about a new ruling that required all faux finish artists to carry a contractor's license for all work except murals.

"We spent the money and complied immediately," says Mark Sexton. However, he adds, "Since then our industry has been flooded with unlicensed upstarts. They are advertising everywhere, without including their state license number, as required by law."

Craig Getty, owner of Craig Getty Painting, says of the unlicensed upstarts: "They impact my business quite a bit. They take a course, get a business license, and claim that's their license to operate."

They also bypass the requirements of licensure by the state board, which include logging four years in the trade, passing a test to demonstrate competence, and filing a financial statement.

Kevin Cornell, general manager at HSP Painting Company, says the situation impacts wallpaper hangers as well, who comprise an even larger segment of the business.

"Those who don't have licenses don't have liability insurance, workers comp or operating insurance," says Cornell. Many work out of their house, and face much lower overhead costs than established companies.

And while homeowners many not care either way, they should, he adds, should on-the-job damage or injury occur because licensed contractors are required to carry insurance, says Getty, "The consumer is

protected by working with us."

And, should the customer be unsatisfied with the work, says Cornell, "They can turn to the contractors board to provide an arbitrator to work out a solution."

And, says Cynthia Fox of Fox Interiors, when a homeowner seeks recourse, they can regret having hired the unlicensed.

"Over the years I've had customers say people asked for money up front, but then the work was not what they had been led to expect. But then the homeowner can't find them. One woman said their contractor was living in a van, and then later, they couldn't find them."

But the contractors board find their hands are tied by regulations, says Fox.

"In order to pursue anyone, they must catch them in the act," Fox says. " But as soon as an unlicensed contractor finds someone is after them, they go underground and disappear."

Still, the expense of staying licensed may prove fatal to faux finishers, Sexton says.

"The State of Nevada is actually enabling illegal companies to maintain a competitive low-expense advantage that translates into lower bids, and companies like ours are losing too much business to survive," he says.

Getty counters says licensed contractors can compete through professional service. But he, too has reported unlicensed competitors. No action was taken, he recalls, because the statue of limitations on the transgression had expired.

Fox says, "I'm so glad this has come up after 23 years of calling the contractors board. There's been a proliferation of unlicensed competitors."

And the problem will only compound, says Cornell. "Due to the state of the economy, you're going to see more unlicensed people bidding for jobs."