Moving Wisconsin to a six year review of the Uniform Dwelling Code (UDC) has been a top WBA advocacy priority this session and one that members talked to members of the Wisconsin legislature about during our annual lobby day, Business Day in Madison this past February.

The stormchaser bill that was vastly improved with WBA’s input also passed the State Senate yesterday.  The amended version of the bill will still allow consumer, contractors and insurance companies to talk about work involved with an insurance claim.  Another substantial change that WBA requested in the final version of the bill was language requiring the consumer to let the contractor know when a job done on the exterior of a home is involved in an insurance claim.

These were 2 big wins for the WBA Advocacy efforts this legislative session!

A: There is no requirement that a home builder provide a warranty for his work.  However, a builder should understand that as a general matter defective work will be considered a breach of the contract with the owner.  Such a claim has a six year statute of limitations.  All contracts are different, and some contracts provide that the only remedy for construction defects is the warranty for the work.  In such cases, such claims are generally limited to the length of the warranty (the warranty the builder affirmatively gives the owner).

Moreover, when a builder or developer conveys new construction (for example, a “spec home” or “turn-key home”), Wisconsin law implies a covenant that such improvement shall be performed in a workmanlike manner, and shall be reasonably adequate to equip the premises for such use and occupancy unless such warranty is disclaimed.  Wis. Stat. § 706.10(7). In other words, if you are selling new construction and you do not intend to provide such a warranty, you should make sure that your contract disclaims all implied warranties such as those implied under Wis. Stat. § 706.10(7).

This Wisconsin Builders Association Hot Line is a service provided  by Axley Brynelson, LLP on behalf of the Wisconsin Builders Association.  The service and the answers to the questions in this blog should be considered a general statement of applicable legal information. Given this format, it is impossible to fully address all potential legal issues which might apply in any particular situation. A determination of any individual’s legal rights in a transaction can only be obtained after complete analysis of the law and its applicability to the particular fact situation. Please contact the WBA Legal Hotline if additional information is needed, or private counsel, if legal advice is needed. Thank you for using the WBA Legal Hotline service.

As you may remember, WBA has spent a great deal of time seeking major changes to the bill that was originally introduced.  Changes suggested by WBA are now contained in two amendments to the bill that were passed in both the state assembly and now the state senate committee.

The biggest changes that are contained in the amendments are the ability for the contractor, consumer and insurance companies to continue talking about a proposed project and scope of work.  Language in the original bill would have made this very difficult.  WBA also supported language that requires a customer to indicate to the contactor right away that the job is involved in an insurance claim.  The original bill draft did not contain this provision.

This legislation is now expected to be considered by the full State Senate, possibly as soon as June 11.

Earlier this week, JFC Co-Chair John Nygren (R-Marinette) stated that the committee could be done working on the state budget as soon as June 4th.  If things really accelerated this week, there was mention of the possibility of being done as soon as Thursday.

Once the JFC completes their work, it will take some time for their work to be drafted and submitted as a substitute amendment to Governor Walker’s original budget.  If the JFC wraps up their work in early June it is very likely that both houses of the legislature will take up the bill during the final week or two in June.

A: No!  This is one of the most misunderstood areas of law for contractors.  If the following tests are not satisfied, then the State of Wisconsin will consider the “independent contractor” your employee for unemployment insurance and/or worker’s compensation purposes. For example, if a general contractor hires a subcontractor to frame a house, the subcontractor will be considered an employee of the general contractor for unemployment insurance and/or worker’s compensation purposes unless the general contractor can prove to the State of Wisconsin that the subcontractor meets the following tests.  The fact that the general contractor may not know the information as it applies to the subcontractor is not a defense.

Unemployment Insurance Under Wisconsin law, anyone that does work for a contractor is considered an employee for unemployment insurance purposes unless the contractor satisfies the department that the individual meet both 1. and 2. below:

1. The services of the individual are performed free from control or direction by the contractor over the performance of the individual’s services.  In determining whether services of an individual are performed free from control or direction, the department may consider the following nonexclusive factors:   a.Whether the individual is required to comply with instructions concerning how to perform the services. b.Whether the individual receives training from the contractor with respect to the services performed. c.Whether the individual is required to personally perform the services. d.Whether the services of the individual are required to be performed at times or in a particular order or sequence established by the contractor. e.Whether the individual is required to make oral or written reports to the   contractor on a regular basis.

2.In addition, the individual must meet 6 or more of the following conditions: a.The individual advertises or otherwise affirmatively holds himself or herself out as being in business. b.The individual maintains his or her own office or performs most of the services in a facility or location chosen by the individual and uses his or her own equipment or materials in performing the services. c.The individual operates under multiple contracts with one or more contractors to perform specific services. d.The individual incurs the main expenses related to the services that he or she performs under contract. e.The individual is obligated to redo unsatisfactory work for no additional compensation or is subject to a monetary penalty for unsatisfactory work. f.The services performed by the individual do not directly relate to the contractor retaining the services. g.The individual may realize a profit or suffer a loss under contracts to perform such services. h.The individual has recurring business liabilities or obligations. i.The individual is not economically dependent upon a particular contractor with respect to the services being performed.

Worker’s Compensation Under Wisconsin law, Wis. Stat. § 102.07(8)(b), an independent contractor is not an employee of an employer for whom the independent contractor performs work or services if the independent contractor meets all of the following conditions:

1. Maintains a separate business with his or her own office, equipment, materials and other facilities. 2. Holds or has applied for a federal employer identification number with the federal internal revenue service or has filed business or self-employment income tax returns with the federal internal revenue service based on that work or service in the previous year. 3. Operates under contracts to perform specific services or work for specific amounts of money and under which the independent contractor controls the means of performing the services or work. 4. Incurs the main expenses related to the service or work that he or she performs under contract.  5. Is responsible for the satisfactory completion of work or services that he or she contracts to perform and is liable for a failure to complete the work or service. 6. Receives compensation for work or service performed under a contract on a commission or per job or competitive bid basis and not on any other basis. 7. May realize a profit or suffer a loss under contracts to perform work or service. 8. Has continuing or recurring business liabilities or obligations. 9. The success or failure of the independent contractor’s business depends on the relationship of business receipts to expenditures.

If you cannot prove that an individual you hire meets the above tests, then that individual will be considered your employee.

This Wisconsin Builders Association Hot Line is a service provided  by Axley Brynelson, LLP on behalf of the Wisconsin Builders Association.  The service and the answers to the questions in this blog should be considered a general statement of applicable legal information. Given this format, it is impossible to fully address all potential legal issues which might apply in any particular situation. A determination of any individual’s legal rights in a transaction can only be obtained after complete analysis of the law and its applicability to the particular fact situation. Please contact the WBA Legal Hotline if additional information is needed, or private counsel, if legal advice is needed. Thank you for using the WBA Legal Hotline service.

Uniform Dwelling Code Training – 1 – 3 p.m., 2 credits Dwelling Contractor Qualifier Credential continuing education; $40/member or $50/non-member. Get details and register here: http://www.wisbuild.org/news-and-information/calendar.html#bf_calFrame_558

The only other builder with a Wisconsin presence on the list is Illinois-based William Ryan Homes. William Ryan ranked 132nd on the list of volume builders, with 204 closings. In 2011, William Ryan Homes ranked 114th.

This webinar is co-hosted with the National Association of Realtors (NAR). In addition to speakers from NAHB and NAR, a representative from the Federal Emergency Management Agency will answer participants’ questions about changes to the program.

Register free for this important two-hour presentation.

Speakers: Tabby Waqar, Program Manager, NAHB Environmental Policy Advocacy Group; Russell W. Riggs, Senior Regulatory Representative, National Association of Realtors

Learn more about NAHB’s Webinar series at nahb.org/webinars.

The general contractor would sue the subcontractor claiming that if there is any defective work that the general contractor must remedy for the owner, then the subcontractor is responsible for the costs of the remedy.

There are many variations of contracts that can change how the liability is allocated between the parties.  For example, the subcontractors or material suppliers may provide a warranty directly to the owner.  In such cases, the general contractor’s contract with the owner may exempt work covered by another contractor’s warranty from the general contractor’s warranty.  The point is:  you need to understand your contracts with the owner and with the subcontractors.

This Wisconsin Builders Association Hot Line is a service provided  by Axley Brynelson, LLP on behalf of the Wisconsin Builders Association.  The service and the answers to the questions in this blog should be considered a general statement of applicable legal information. Given this format, it is impossible to fully address all potential legal issues which might apply in any particular situation. A determination of any individual’s legal rights in a transaction can only be obtained after complete analysis of the law and its applicability to the particular fact situation. Please contact the WBA Legal Hotline if additional information is needed, or private counsel, if legal advice is needed. Thank you for using the WBA Legal Hotline service.

The hotline will answer questions that are relevant to the building, remodeling, and development industries.  Examples of this include information on liens, contracts, land use, local ordinances, fees, building codes, and other related issues.  If your question requires information outside the scope of the hotline service, you will be directed to an outside source for more information.

Hundreds of members have already taken advantage of this valuable membership benefit.  Be sure to keep it mind as you go about your busy workdays!