A former carpenter and newspaper reporter, Oliver Marks has been writing about home
improvements for 16 years. He's currently restoring his second fixer-upper with a mix of
big hired projects and small do-it-himself jobs.
Read more: http://www.houselogic.com/home-advice/contracting/top-5-contractor-scams-and-how-avoid-them/#ixzz1d2ZjBYsm
Crooks go where the money is. So with Americans spending as
much as $22 billion a year on construction projects, it’s no
surprise that home improvement has become a favorite target for
fraud artists. Some of these shady characters use amazingly well-
polished contractor scams that are tricky to spot until it’s too late.
The vast majority of contractors are honest, hardworking
professionals. Protecting yourself against the few bad apples
requires checking references,having a solid contract, and being
alert to the warning signs of these top five contractor scams.
Scam 1: I’ll need the money up front
This is the most common ruse reported to the Better Business
Bureau. Your contractor explains that because he has to order
materials and rent earthmoving equipment to get the job started,
he needs, say, 30% to 50% of the project price up front. Once
you’ve forked over the dough, one of two things happens: He
disappears on you, or he starts doing slapdash work knowing that
you can’t really fire him because he’s sitting on thousands of your
dollars.
How to protect yourself: Never prepay more than $1,000 or
10% of the job total, whichever is less. That’s the legal maximum
in some states, and enough to establish that you’re a serious
customer so the contractor can work you into his schedule—the
only valid purpose of an advance payment. As to the materials
and backhoe rentals, if he’s a professional in good standing, his
suppliers will provide them on credit.
10% of the job total, whichever is less. That’s the legal maximum
in some states, and enough to establish that you’re a serious
customer so the contractor can work you into his schedule—the
only valid purpose of an advance payment. As to the materials
and backhoe rentals, if he’s a professional in good standing, his
suppliers will provide them on credit.
Scam 2: Take my word for it
When you first meet with the contractor, he’s very agreeable
about doing everything exactly to your specifications and even
suggests his own extra touches and upgrades. Some of the
details don’t make it into the contract, but you figure it doesn’t
matter because you had such a clear verbal understanding.
Pretty soon, you notice that the extras you’d discussed aren’t
being built.
When you confront the contractor, he tells you that he didn’t
include those features in his price, so you’ll have to live without
them or pony up additional money to redo the work.
How to protect yourself: Unfortunately, you have no legal
recourse because you signed a contract that didn’t include all the
details. Next time, make sure everything you’ve agreed on is
written into the project description. Add any items that are missing,
put your initials next to each addition, and have the contractor
initial it, too—all before you sign.
Scam 3: I don’t need to pull a permit
You’re legally required to get a building permit for any significant
construction project. That allows building officials to visit the site
periodically to confirm that the work meets safety codes.On small
interior jobs, an unlicensed contractor may try to skirt the rule by
telling you that authorities won’t notice. On large jobs that can’t
be hidden, the contractor may try another strategy and ask you to
apply for a homeowner’s permit, an option available to do-it-
yourselfers.
But taking out your own permit for a contractor job means lying to
authorities about who’s doingthe work. And it makes you
responsible for monitoring all the inspections—since the contractor
doesn’t answer to the inspector, you do.
How to protect yourself: Always demand that the contractor get
a building permit. Yes,it informs the local tax assessor about your
upgrade, but it weeds out unlicensed contractors and gives you
the added protection of an independent assessment of the work.
Scam 4: We ran into unforeseen problems
The job is already under way, perhaps even complete, when
this one hits. Suddenly your contractor informs you that the
agreed-upon price has skyrocketed. He blames the discovery
of structural problems, like a missing beam or termite damage,
or design changes that you made after the job began.
The additional fees might very well be legit, but some
unscrupulous contractors bid jobs low to get the work and then
find excuses to jack up the price later. If you’re unsure whether
your contractor is telling the truth about structural problems, you
can get an impartial opinion from a home inspector, the local
branch of the National Association of Home Builders, or even
your local building department.
How to protect yourself: Before signing the contract, make
sure it includes a procedure for change orders—mini-contracts
containing a work description and a fixed price—for anything that
gets added to the job in progress. The extra work, whether it’s
related to unforeseen building issues or homeowner whims, can
proceed only after the change order is signed by both home
owner and contractor.
Scam 5: I’ve got extra materials I can sell you cheap
This hoax is usually run by driveway paving companies, whose
materials—hot-top asphalt and concrete—can’t be returned to
the supplier. So the crew pulls up to your house with a load of
leftover product and quotes a great price to resurface your
driveway on the spot.
Even if it’s really a bargain (by no means a sure thing), taking
them up on the offer is risky if you have no idea who they are
and haven’t checked references. And if the driveway starts
cracking next year, you can bet you won’t find this bunch again.
How to protect yourself: Never hire a contractor on the spot,
whether it’s a driveway paver,an emergency repairman who
shows up after a major storm, or a landscaper with surplus
plantings. Take your time to check contractors out to make sure
they have a good reputation and do quality work.
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