One morning in late August, Elaine Thomas answered the knock on her North Philly home. It was a worker telling her a crew was getting ready to build a house next to hers.
“He said, ‘Ma’am I’m going to knock the side alley down,’” the 86-year-old homeowner recalled, referring to the shared covered alleyway between her home and the lot next to it.
Later that morning, the right wall of her home came crashing down, with much of her furniture ending up in a pile of rubble. The city’s Department of Licenses and Inspections ordered Thomas’ home be demolished.
Decades of memories, gone.
The Department of Licenses & Inspections blamed the contractor, Elegance Group, for the collapse, issuing it more than 10 violations — including having unlicensed and suspended contractors working on site.
The NBC10 Investigators found that the president of the contracting company has another business called Expert Builders. That entity had its contracting license suspended just weeks prior to the collapse. The reason: falsifying engineering reports for another construction project.
Elegance was able to pick up the projects Expert Builders was no longer able to work on, even while having the same officers. It’s a loophole known to Philadelphia contractors and L&I. Even if a contractor’s license is suspended or revoked, they can simply create a new company, or use a separate existing company, and get a new license, allowing them to keep building.
“That’s an issue. That is an issue. There is a prohibition against that in the code. But a lot of contractors try to skirt that and try to use loopholes,” said Basil Merenda, L&I’s Commissioner for Inspections, Safety and Compliance.
On its website of suspended and revoked contractors, where Expert Builders is now listed under “Revoked” status, the department wrote the following:
“…the principals of Expert Builders applied for a new license under the Name Elegance Group to evade suspension and continued to work under that license.”
Both businesses have been cited dozens of times before by L&I for various violations, including not providing a barrier for excavation and working without required inspections or certified workers.
The NBC10 Investigators attempted to speak with Andrei Hlushan, president of both Expert Builders and Elegance Group, at the Bucks County address listed on Elegance Group’s permit applications. Hlushan declined an on-camera interview, saying by phone that he had permission from L&I to do the work he’s currently doing.
He seems to be correct.
Despite L&I’s determination that the two companies were tied — and that the new license appeared to be an attempt to sidestep enforcement — Elegance Group has continued to receive building, mechanical and excavation permits from the city as recently as Nov. 21.
“We can’t just revoke the license,” Merenda said. “They have their due process rights.”
In September, following the Thomas home collapse, L&I notified Elegance Group that it intended to revoke its license. The company appealed — a move that allows it to continue operating until the appeal is resolved.
In the meantime, Elegance Group has racked up more than 100 violations this year alone, and owes the city more than $20,000 in outstanding fines, according to city records reviewed by the NBC10 Investigators.
Under the city code, contractors with unpaid fines are not supposed to receive additional permits.
But L&I says it is taking a phased approach and not yet withholding permits due to outstanding fines and violations.
A spokesperson for the department explained in an email that “Phase One” of enforcement, which is now in effect, will not allow a contractor to renew their annual license if they have unpaid fines.
“Phase Two,” the spokesperson wrote, will prevent contractors from obtaining any permits if they have outstanding balances on violations. That does not go into effect until July 2026.
Perhaps by then, Elegance Group will have resolved its outstanding violations and fines.
In a statement to the NBC10 Investigators, Elegance Group said that its insurance company is working with Thomas to find an appropriate resolution.
The statement went on to say, “In regard to the license, we are in the process of retaining counsel to assist with the licensing and violation issues and work towards a resolution with the city.”
Merenda said the department is exploring if legislative changes could prevent the issue of companies getting around suspensions with new licenses.
“Try to close the loophole that these folks are using,” he said.
He added that some of the violations identified by the NBC10 Investigators raise concerns that extend beyond civil penalties.
“Some of these egregious situations that you identified may warrant a criminal investigation at the very least, and possibly criminal prosecutions,” Merenda said.
Elegance Group has its license revocation appeal hearing on Dec. 18.