News - Special Packages - Hurricane Katrina

Saturday, Oct. 24, 2009

Industry leaders call for tougher regulation of home builders

Any Tom, Dick or Harriet with a truck and tool box can work as a home builder in Mississippi.

Reports of home repair fraud have slowed since Hurricane Katrina, but groups representing licensed home builders believe Mississippi needs stronger laws to protect consumers from the heartbreak and expense of shoddy or fraudulent work.

The Attorney General’s Office says Katrina fraud cases are tapering off, but complaints are becoming more common in other parts of the state. Cases referred to the attorney general’s Consumer Protection Division decreased almost 39 percent from 2007 to 2008, when 423 cases were reported.

“People have become more aware of the problem,” said Meredith Aldridge, director of the attorney general’s Consumer Protection Division. “We’re seeing cases throughout the state and not just on the Coast.”

Rhonda Rhodes, executive director of the Hancock County Housing Resource Center, has seen firsthand the economic devastation suffered by Katrina survivors. She estimates that 30 to 40 HCHRC clients need help rebuilding because they lost their recovery funds to incompetent or dishonest builders.

Construction suppliers suffer, too, when builders fail to pay for supplies received on credit.

Attempts to strengthen licensing and insurance requirements have repeatedly failed in the Mississippi Legislature. Only about half the states in the country have licensing requirements, according to the National Association of Home Builders, which is neutral on the licensing issue.

The national association says workman’s compensation insurance for builders is almost universally required by states. Mississippi, however, is an exception. The state does not require builders to secure workman’s comp or general liability insurance.

“We feel like as an industry that it’s hard to understand,” said Marty Milstead, executive vice president of the Mississippi Home Builders Association. “For heaven sakes, you have to take a test to drive a car. You have to have insurance to drive a car, but not to build a house.”

Milstead said the state House of Representatives has been unwilling to require insurance.

Mississippi has licensing requirements, but professional organizations believe the threshold for a license should be lower than state law currently mandates.

Under state law, a person can build two houses a year without a license as long as the house is not intended for resale. On the Coast, however, home repair fraud after Katrina has prompted localities to create lower thresholds for licensing.