Although the law we'll look at today specifically concerns a New York City regulation, everyone should continue reading. This case is important to most of you since many other municipalities around the country now have similar regulations or will probably enact one in the near future.

This regulation requires a "home improvement contractor" to obtain a local license if he is to engage in the business of home improvement in that county. The first question: Who or what is a home improvement contractor?

The New York City regulation, similar to most I've seen, contains the following definitions: Home Improvement is the construction, repair, replacement, remodeling, alteration, conversion, rehabilitation, renovation, modernizing, improvement or addition to any land or building or that portion thereof which is used or designed to be used as a residence or dwelling place.

Home Improvement Contractor is any person, or salesperson, other than a bonafide employee of the owner who owns, operates, maintains, conducts, controls or transacts a home improvement business and who undertakes or agrees to perform any home improvement or solicits any contract therefore whether or not such person is a prime contractor or subcontractor with respect to the owner.

Home Improvement Contract means an agreement, whether oral or written or contained in one or more documents, between a contractor and an owner, or contractor and a tenant, regardless of the number of residences or dwelling units contained in the building in which the tenant resides, provided said work is to be performed in, to or upon the residence or dwelling unit or such tenant for the performance of a home improvement and includes all labor, services and materials to be furnished and performed hereunder.

After providing these definitions, the N.Y.C. Code goes on to state, "No person shall solicit, canvass, sell, perform or obtain a home improvement contract as a contractor or a sales person from an owner without a license therefore." The penalties provided by the code for one who violates this section are substantial- he is guilty of a misdemeanor, and a home improvement contractor cannot enforce a home improvement agreement if he was not licensed when the agreement was made.

The consumer, in these cases, can simply tell the contractor he is not going to get paid and take a walk. It does not matter whether the work performed or the goods furnished were good or bad. These statutes are absolute: no license, no lawsuit, no money. As one judge stated, "The courts have been zealous in enforcing the licensing requirements, strict compliance with the licensing statute is required, with the failure to comply barring recovery, regardless of whether the failure to obtain the license was willful or, even whether the home owner knew of the lack of a license and planned to take advantage of its absence."

Why is this law so tough? Mostly because of the various abuses of home improvement contractors against consumers before these laws were passed. The licensing requirement forces the contractor to put his home address on the public record. He is required to have insurance and, in some locations, place certain deposits in escrow accounts.

So, where does a flooring installer fit into this law? Is the installation of carpet, linoleum or tile a home improvement? It most certainly is, and if you are in a location that has a home improvement license law, and you sub-contract out your installations, those subs most likely need to have their own license.

Knowing the licensing laws where you do work, and complying with them, may well save you a lot of money in the future. It's worth the effort.