Spring not only brings good weather, but it also brings out the home improvement scam artists. These scam artists cost our $200 billion industry a fortune in good will and customer respect. It’s truly in our best interest to coral these miscreants, but that’s a tall order. The best way, maybe the only way to handle these uninsured, unlicensed, door slammers is through a conscious homeowner education process.
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It’s Spring – Beware of home repair scams
Spring time brings a crop of unscrupulous home improvement contractors offering rock-bottom prices. They perpetrate a scam by taking large deposits for work they either don’t complete, complete poorly, or don’t start at all.
Doing your homework is imperative to protecting yourself and your money. According to the Consumer Federation of America, problems with home-improvement contractors are in the top 10 complaints consumer affairs organizations see along with contract issues with cell phone companies, cable providers, and auto repair facilities.
“References are your first line of defense,” said Contractor, CAPS, CGR, president of XYZ Construction, a Your Region general contractor who builds new homes and completes high-end remodeling projects. “Ask your friends or family for recommendations of good contractors, and still check their references. Most people spend more time researching their next automobile purchase than they do researching who they hire to remodel their home.”
“Getting three estimates gives the homeowner a sense of what they’re looking at for costs and helps them develop a sensible budget based on what they can afford,” said Contractor, “but the lowest estimate is rarely the best choice. It merely provides a range. More important issues include licensing and insurance. Because of a lower overhead, an unlicensed and uninsured contractor can obviously perform work at a lower cost than a contractor who has met all the requirements and obligations to be licensed and insured, but the homeowner is at risk. A competent contractor won’t hesitate to produce his license, insurance certificate, and a list of references for a homeowner’s inspection.
“Homeowners should also ask what professional organizations a contractor belongs to and what certifications does he hold,” Contractor explained. “If a contractor has gone to the expense of time and energy to become certified, he is serious about his craft.”
Joe Contractor offered a list of things homeowners can do to protect themselves from unscrupulous contractors:
• Check with consumer agencies and trade organizations like the Local Home Builder’s Association (localhba.com; 555-123-4567). A phone call or web visit will quickly reveal if a contractor is a member in good standing.
• Make sure a considered contractor has appropriate and adequate workers’ compensation insurance. Any contractor with employees who comes to your home to perform work must have workers’ compensation. Ask to see your contractor’s certificate and check to make sure it is in force. When you ask the contractor to show you a copy of his workers’ compensation, make sure you see a coverage date on the certificate. Some scam artists whose coverage has lapsed might show you an official-looking certificate with the right name on it, but there’s no active date.
• Specifically ask to see a contractor’s license. Most states, as well as many counties and municipalities, require a current license to perform work on homes within their jurisdiction. Many communities require that a contractor also be bonded to protect the consumer and city in case the contractor leaves a job. To verify a Your State contractor license, visit yourstatelicense.gov.
• Before you hand over a check, get everything in writing. No serious contractor is going to perform services without a formal contract. A number printed on the cover of a matchbook or napkin does not constitute a contract. A well-written contract protects him as well as the homeowner. Besides the price to complete the work proposed, a contract should have an accurate statement of work; include start and completion dates; a list of specific work to be completed; and the materials to be used. It should also identify who is responsible for the disposal of trash, including the frequency the trash will be removed from the premises. A contract will also define and set up a payment schedule. Many contractors will set up a payment of one-third of the price to begin, another third about half way through, and the final third, less a percentage for retention once the final walk-through and punchlist has been completed. The retention percentage is usually paid between 30 and 60 days later. Special order items will require more money up front. When a contractor asks for full payment up front and puts a lot of pressure on you for the job, it may be a sign of an unscrupulous contractor, or one without the financial resources to adequately do the work proposed, neither of whom you should trust to complete the project to your satisfaction.
• The length of time a company has been in business shouldn’t be a deal breaker, but a company that has been serving a particular community for a number of years will usually have established a good reputation and will have excellent references.
“Be a smart consumer,” said Contractor. “A legitimate contractor would prefer to work with an educated homeowner who has done their research, knows what they want, has a realistic budget, and reasonable expectations for the outcome.”
XYZ Construction has been satisfying Your Region homeowners for more than a decade with quality new home construction and high-end renovations and remodels. Joe Contractor is a Certified Graduate Remodeler (CGR) as well as a Certified Aging-In-Place Specialist (CAPS) through the National Association of Home Builders (NAHB). For more information, visit yourwebsite.com.