Consumer rights and contractor fraud

This article will give you a brief outline on hiring a contractor with the most confidence when remodeling, renovating, or making a home addition.

Photo Credit: Peter Chen
By Walt Lange

The first thing that you have to know is that you as a consumer do have rights when dealing with any contractor. Know your rights, before starting any home improvement, repair or additions check with your local state or municipality for any law pertaining to licensing of contractors and insurance requirements.

Regretfully, the construction industry is riddled with scam artists calling themselves contractors. The first rule of thumb when having to deal with any contractor you are best to go with one that has done work for someone you know and are been recommended. Don’t always go with the lowest bidder, you get what you pay for. Ask for references, always, a reputable contractor will gladly give you a list of satisfied customers. Check the references, ask questions, satisfied customers even partially satisfied customers will usually be glad to talk about the work they had done by that contractor. Also you can ask at your local building supply to see if they know this contractor and are familiar with their work.

Questions to ask:

1. How was the workmanship?
2. Price as it compares to workmanship, too high, fair, etc.?
3. Cleanliness of the work during process? You do not want to have even a good contractor working on your project if they DO NOT keep your property in a reasonably clean condition.
4. How safe did he work?
5. Are you really satisfied, of marginally satisfied? And why?
6. Did he use quality materials?
7. Were his workers properly supervised?
8. Any comments, positive or negative, that these previous customers may have?

If you do decide to go with a particular contractor, get everything spelled out in a written contract. Some states require any job in excess of a specific amount is required to have a written contract but that does not bar you from requesting the work to be done spelled out in writing for any amount. Make sure that, where applicable, the brand name of the materials is stated in the contract, i.e.: Paint, plumbing fixtures, lighting, and appliances. This way you have recourse if you are delivered other than that which was specified unless you have a written change order allowing for a substitution.

Do not hire a contractor that has an out of state address, this sounds obvious but many have and have been scammed by what are called “The Travelers” a group of con artists that travel the country taking peoples money for work that is either not done at all or so shoddy of work that it has to be done over in a matter of weeks and these smiling faces that did the work originally are no where to be found. So be sure you have a good, reliable, verified local address for your contractor and a landline phone number not just a cell phone number.

Make sure that the contractor has all the state required insurance and if not required by state, be sure they have Liability Insurance to cover and loss or damage to your property or person coming onto your property. You also have the right to require a Construction Bond; this will cover you for your financial losses due to an incomplete abandoned project, excessive delays in performance of the contract outside of normal delays such as weather or lack of delivery by the vendor and no replacement for the missing items available locally.

Do not agree to any additional work or changes in the original work stated in the contract without a written agreement between yourself and the contractor for these changes. Verbal agreements only lead to disagreements and have no legal bearing in court if you find that you have to file a suit for a refund of monied paid or to have work completed.

Last and as important as any of the above items mentioned is “Pay Schedule”, some state licensing boards will tell you what the maximum legal allowable deposit for work is, do not, repeat do not exceed this amount. This is for your protection, in case the contractor never shows up again you are not out a large financial outlay. In many states the standard deposit is 10% of the contract price or $1000 which ever is the lesser. Check with your State Licensing Board.

Protect yourself from poor or phony contractors as best you can, there is no guarantee that you cannot be scammed but if you follow these points as outlined in this article everything is and will be in your, as the consumer, favor.