Permits are lacking on many home furnace replacement jobs in area

March 09--Bob Hallinan thought everything had gone right when he snagged three bids and replaced the furnace and air conditioner in his Olathe home.

But something was missing that would have given him peace of mind -- if only he had known about it.

The company that got the job didn't pull the legally required permit. And that meant no city safety inspection to check whether the new gas furnace was properly connected to prevent fires and, more important, whether it was properly venting carbon monoxide.

The insidious and odorless gas leaking from furnaces kills 50 people a year and sends hundreds more to the hospital. At lower levels of exposure to carbon monoxide, you suffer flu-like symptoms that at first you wouldn't even suspect are being caused by your furnace.

Mark Scott, an emergency room doctor at the University of Kansas Hospital, said cell damage from carbon monoxide poisoning can leave you with slower reflexes, weakness and trouble keeping your balance.

"It can have devastating outcomes," he said.

Hallinan said the need for a permit to replace his furnace "never came on my radar."

He's not alone.

A review by The Star of public records from four area cities tracking the replacement of residential heating and cooling units in 2013 determined that permits were rarely pulled.

The records from Kansas City, Lee's Summit, Overland Park and Olathe showed that some of the area's well-known and established heating and cooling companies took out few if any permits.

According to The Star's analysis, an estimated 84 percent of the furnaces replaced in the four cities in 2013 didn't have permits. Industry insiders say the problem also affects other area cities.

The bottom line is that homeowners miss out on the city safety inspections.

To examine the gap between furnaces being replaced and the permits pulled, The Star first determined the number of single-family and two-family dwellings in each city. Industry numbers indicate that four out of five of those dwellings have gas furnaces in the area, the most widely used type of heating.

The average life of a gas furnace was then used to gauge roughly how many furnaces would need to be replaced a year.

In the four cities, The Star estimated that 13,000 furnaces probably were replaced in 2013. Yet just 2,100 permits were issued. The numbers don't include multifamily units such as apartment buildings, which get commercial permits.

In the biggest city, Kansas City, 7,200 residential furnaces probably were replaced in 2013. But just 948 permits were pulled.

The low number, say industry experts, is disappointing but not surprising.

The permits typically cost $50 or less. Companies that pull permits point out that competitors that skip the permits often underbid them. Besides the permit fee, the remiss companies avoid added and possibly expensive work to correct deficiencies needed to meet safety codes.

"It's a hot button item for me," said Henry Temchin, executive director of the local chapter of the Air Conditioning Contractors of America, whose members install cooling and heating equipment.

In new homes, furnaces, air conditioners and heat pumps are usually inspected because they're covered by the permit for building the whole house.

Industry insiders and safety experts say that for years the problem of not pulling permits for replacement heating and cooling units was mainly concentrated among unlicensed operators. But now it has spread to licensed companies.

There are more than 100 licensed heating and cooling companies in the area. But The Star's review found that in 2013 just two -- A.B. May and Anthony Plumbing Heating & Cooling -- pulled half of the permits in the four cities, and just a handful of other companies accounted for most of the rest.

--In Overland Park in 2013, five heating and cooling companies accounted for 84 percent of permits for replacement units. Five others provided most of the rest.

--In Lee's Summit, just three companies pulled 71 percent of the permits. The city issued only 50 permits to other companies.

--In Kansas City, 10 companies pulled 70 percent of the permits.

--In Olathe, just five companies accounted for 88 percent of the permits.

Many companies pulled few or no permits at all in the four cities, including two of the area's longer-established licensed heating and cooling companies.

According to city records, LBA Air Conditioning, Heating & Plumbing, which has been in business 29 years and serves the area with 60 employees and a 46,000-square-foot warehouse, didn't pull any residential replacement permits in Kansas City. In the three other cities, the records show the company had just one permit.

The company did not respond to requests for comment.

Overland Park Heating & Cooling, which has been in business for more than 30 years and advises customers on its website to be careful when selecting a company to install a furnace, pulled no residential replacement permits in Overland Park or the three other cities, according to the cities' records.

The company also did not respond to requests for comment.

"It's frustrating to me because you see companies advertising that they're reputable companies and I'm saying you're not pulling any permits in my community," said Tim Ryan, head of code administration in Overland Park.

He pointed out that venting the newer high-efficiency furnaces has become more problematic. Such units have cooler exhaust gases and can't be vented through masonry chimneys. If they are, carbon monoxide could spill into the basement, while condensaton from the cooler gases could damage the chimney and furnace.

"We find problems" with the installations of high-efficiency units and issues with other heating and cooling equipment, he said.

Safety experts say evading the inspections, which also occurs in other parts of the country, is disturbing and foolish.

The large majority of replacements are probably installed correctly and meet safety codes, especially if done by licensed companies, but experts point out that permitting and follow-up inspections are mandated by law because the results can be catastrophic when something goes wrong.

Raytown's fire chief, Matt Mace, said a "second set of eyes" was crucial when dealing with furnaces fed with a flammable fuel and emitting carbon monoxide and with heat pumps or central air conditioners hooked up to 240 volts of electricity.

The International Code Council writes the building and safety codes adopted by much of the country, including Kansas City area cities.

"We're all about safety, and one of the keys to safety is getting permits and inspections," said spokesman Steve Daggers.

Severe consequences

Carbon monoxide, which deprives the body of oxygen, is known as the silent killer.

Last month, three people died in Plaistow, N.H., after absorbing carbon monoxide that spilled out of a propane-fired furnace. Whether the furnace was inspected and installed properly is under investigation.

The town's fire chief, John McArdle, said he had seen poorly installed heating equipment that wasn't inspected. That happens more often when the homeowner does the work himself but sometimes when done by technicians for heating and cooling companies.

"There are good technicians, average technicians and some you wonder how they got in the class," he said.

The Lenexa Fire Department received 195 carbon monoxide calls last year, although that includes false alarms and other sources of the poisonous gas besides furnaces, such as portable generators. One of the city's most serious incidents occurred three years ago when three people were hospitalized after a malfunctioning furnace spewed lethal levels into their home.

"They were fortunate," said Scott Hoch, a division chief at the depatment.

A few years ago, three employees of a Northland apartment complex had sporadic headaches and nausea for months. The cause was carbon monoxide, which was eventually traced to non-permitted work, including a room that was too small for the furnace, poorly installed venting on the furnace and a gas clothes drier vented with a bathroom fan taped into ductwork.

In that case, carbon monoxide was discovered only after the employees bought carbon monoxide detectors. At one point, according to a deposition filed in a lawsuit, their supervisor tucked the detectors into a desk drawer because they kept sounding alarms.

The Poison Control Center at University of Kansas Hospital received 48 hotline calls last year from the Kansas City area about carbon monoxide exposures. About a third of those were related to furnaces.

Tama Sawyer, the poison center's director, said the hotline didn't hear about many carbon monoxide exposures in part because at lower levels the headaches and nausea are often mistaken for the flu.

Patients exposed to carbon monoxide who are sent to KU Hospital are given oxygen. In more serious cases, they're placed in a hyperbaric chamber that uses pressurized oxygen to flush out the carbon monoxide from their bodies.

No one keeps track of exactly how many poisonings are caused by furnace malfunctions that resulted from poor installations.

Jay Freeman, president of AEI Corp., a forensic engineering firm that investigates carbon monoxide poisonings across the country, said he has definitely seen it.

Sometimes installers "do a real crappy job," he said. "An inspection is important."

There could also be a monetary consequence to not getting an inspection on a replacement furnace.

State insurance officials say that occasionally insurers refuse to pay claims when a gas appliance such as a furnace is not installed correctly. Insurers have also fought carbon monoxide claims, contending the gas is toxic and not covered because of a "pollution exclusion" clause typically found in home insurance policies.

With air conditioners, the main threat is electrocution.

A resident of Mission Hills risked serious injury or death when the hedge trimmer she was using sliced into a replacement air conditioner's 240-volt power line that didn't have a required protective cover. She was saved by the trimmer's insulated handle.

An honor system

Catching inferior installment jobs is the goal of what should be a well-oiled machine.

It begins when a group such as the International Code Council

But the system stumbles in part because cities have little money for enforcement. The well-oiled machine has instead become an honor system that relies on the good intentions of those installing the equipment.

Putting a number on how many contractors evade the system is difficult. But California officials gave it a shot -- with air conditioners.

They snagged some local sales data and compared it with the number of permits issued. The conclusion: Only 10 percent of air conditioners installed were being inspected.

Why so low?

That's what the University of California-Davis sought to answer in a report, "Contractors Walk on the Wild Side ... Why?"

In a survey of contractors, more than 80 percent said they had little concern about getting caught for not pulling a permit and thought they could be more price competitive.

California is trying to fight back with sting operations to catch unlicensed contractors and others not pulling permits. Stiffer fines start at $750 for the first offense, and there is potential jail time if there are more offenses.

By comparison, a fine in the Kansas City area is typically two or three times the permit fee -- $100 to $150.

California officials think they may have found a real fix. In one county, they're rolling out a pilot program that will gather the names of companies or individuals buying wholesale heating and cooling equipment. They will then check to see whether permits were pulled.

There will also be stiffer penalties, including making contractors pay for the cost of what it takes to get the job to meet code.

"It will take the benefit out of cheating," said David Fogt, chief of enforcement for the California State License Board.

Such steps aren't being considered in the Kansas City area. Nowadays enforcement occurs mainly when someone calls about whether a company is doing work without a permit.

Greg Franzen, assistant director of development services for Kansas City, said educating homeowners would let them know that the inspections were needed to ensure safety, so they should make sure to hire licensed companies who pulled permits.

But there isn't money to "roam neighborhoods to catch contractors not pulling permits."

Companies that pull permits believe it will take some aggressive moves, including tougher fines and enforcement to get others to do the same.

"If they can get away with it, they're going to," said Bob Hamilton, owner of Bob Hamilton Plumbing Heating & Cooling, which pulls permits.

Some do it right

Duane Wood, one of the owners of Santa Fe Air Conditioning & Heating, said unlicensed contractors in unmarked pickups can be tough to catch. Because they often don't collect sales tax or carry insurance and cut other corners too, they can offer cheaper prices.

"It's a humongous can of worms," he said. "But it's tough to cut corners when you have a third party looking at your work."

Ramon Blachly, who owns Olathe Heating & Cooling, which pulls permits, agrees: "Saying I do it right is one thing. Having someone else inspect it and say it's right is another."

As for Hallinan of Olathe, he finally got his inspection.

Three weeks after his furnace and air conditioning were installed, he found out there should have been an inspection. He called the owner of Town & Country Heating and Cooling, and the owner said he had tried to get a permit from the wrong city.

Eventually an Olathe permit was pulled and an inspector came out to Hallinan's home. Besides a problem with a disconnect box on the air conditoner, which is being fixed, everything else checked out.

"It was good to have that second pair of eyes," Hallinan said.

To reach Steve Everly, call 816-234-4455 or send email to [email protected].

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