Soiled Hands

It's no surprise that builders take shortcuts to make money. What might shock you: Government officials -- from regulators to legislators -- do little to stop them

The reason that most never end in discipline? Few ever make it to a hearing. Roughly four of every five complaints are dropped by homeowners before they get that far.

Sometimes they just give up. The process isn't easy, and it relies on homeowners who are willing to push, and to keep pushing.

Often, though, just the threat of a hearing can bring a builder around. Hearings always start with the judge asking if both parties are willing to negotiate privately, one more time. It's a rare builder who isn't.

Bill Albright, who runs the Registrar's legal department, believes that's a good thing. "We try to help resolve complaints," he says, adding that it's in the best interest of the homeowner to solve things quickly.

But there's a bigger picture beyond resolving things for the homeowner, as the Arizona auditor general has concluded.

After all, the auditor wrote, there should be two parts to the Registrar's job: Helping the homeowner, and disciplining the builders.

That finding comes from a 2003 performance audit of the Registrar. The auditor general's chief complaint in that report: The Registrar did too little to help consumers.

The auditor noted that the Registrar closes complaints once the homeowner is satisfied. But that system ignores contractors who do terrible work, or make the same mistakes repeatedly, so long as they eventually make corrections.

"This process allows contractors to commit multiple violations but never receive discipline," the report concludes. "While the complainant may be satisfied, this process fails to protect future consumers who may hire such a contractor."

The audit was released during a time of transition at the Registrar's office. Michael Goldwater -- son of Barry and appointee of Governor Fife Symington, himself a developer -- had recently resigned. Governor Napolitano had appointed a young lawyer named Israel Torres, previously a hearing officer for the city of Phoenix planning department, to take his place.

Torres, a personable, articulate guy who calls himself a "pro-business Democrat," promised to act on the auditor's findings.

In particular, he responded by outlining a plan to discipline problem contractors.

But the plan didn't fit the problem.

In his response to the audit, Torres wrote that his legal staff would monitor cases due for a hearing. If a builder settled more than six cases just before a hearing in any one year, the agency would look at the cases and decide whether to cite the builder.

But, as Torres' staff now admits, the program never really got off the ground.

As head of the legal division, Albright says he monitored incoming cases for "several months."

He only spotted one contractor who seemed to fit the profile.

"I never found a contractor who in my understanding was just using the system that fashion, other than that guy," Albright says. He now concedes that the idea of pursuing claims, either with a complaining homeowner or on its own, isn't an agency priority.

So why not develop a system that actually catches problem builders? Albright acknowledges that the agency could monitor every complaint that's filed, not just the one-third that make it to the hearing stage.

If the goal was to bust people, he admits, they'd probably find people to bust.

But that would strain the office's resources to the point of breaking.

The Registrar's legal staff, he notes, has "one lawyer, one gentleman who serves as a paralegal, an office manager, and two ladies who process the 3,000 cases that come in for a hearing."

It's no wonder the agency relies on consumers to act as their own attorneys. Monitoring all 10,000 complaints, Albright says dryly, "would be very difficult."

Booth, the former inspector, blames finances: "It has to be a complaint-driven process. If they started seeking out cases, they would quickly be broke. There's no budget for it."

But that's not the agency's attitude toward unlicensed builders. There, the agency is only too willing to "seek out" cases.

As Albright explains, agency investigators regularly operate stings against unlicensed contractors. For example, they search the billboards at home improvement stores for ads from guys without a license. They'll actually call the guy and offer him work; if he shows up and agrees to take a job worth more than $750, he gets arrested.

Investigators also "sweep" every job site in a given area, checking that the guys on the job have the right paperwork.

Albright believes such activity has a chilling effect: A builder will think twice about using unlicensed workers if he knows the agency is on the case.

"Our sweeps have not necessarily got a whole lot of unlicensed contractors," Albright explains. "We looked at 298 sites in Casa Grande, and we got six unlicensed violations. But we get the word out."

Rooting out unlicensed contractors, even without a homeowner's complaint, takes up a good chunk of the agency's resources: It employs 26 "investigators" to bust unlicensed contractors -- and just 28 inspectors to examine the 9,000 complaints against licensed builders.

Torres, who recently resigned from the Registrar's office to challenge Jan Brewer for secretary of state, says he believes the agency does a good job of protecting consumers.

It's also important, he says, to work with builders.

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