Be Aware of Your Options
While the basics are likely just using common sense to hire a general contractor, such as checking references, verifying credentials, and getting multiple bids. Be aware of the warning signs of a potentially bad hire can be brought about by using these insightful tips and will keep you from getting ripped off now and in the future.
The next time you’re facing a home improvement hiring decision, be on the lookout for these warning signs.
Common Contractor Scams and How to Avoid Them
Each year, Americans spend billions of dollars in home maintenance/repairs and improvements, but we don’t always receive quality service or completed work that is to our satisfaction.
Most contractors are not out to rip you off, but some are not good people and will try to try various techniques to get your hard-earned money.
- Pay up and hope that they show up
A contractor will commonly ask for a down payment, which is ok but paying too much too early puts you at risk of an uncompleted job or one that has not been started. So be aware of a contractor that asks for a large down payment (more than 1/3 the cost of the repair or improvement). The contractor may even ask for all the money at once supposedly for purchasing materials and supplies.
2. Bait and Switch
The contractor indicates that the price of the job has gone up after a contract has been signed. He lures you in with a low bid and then raises the cost of the situation after the contract is signed and work has begun. This is the switch. You can protect yourself from this sneaky maneuver with a well-understood contract (read it very carefully) and put everything that you expect in writing. Three essential things in a deal are the start and completion dates, payment penalties for missed completion dates, and an itemized materials list and warranty information.
3. Unlicensed contractors
This individual’s work usually costs less, but in the long run, you may pay more for the job as this shady contractor will avoid obtaining necessary building permits, liability insurance, or worker’s compensation. The homeowner is at financial risk if there is an accident or injury that occurs on their property.
Most states have a state license or registration requirements for at least some type of home improvement plan. Protect yourself by hiring a licensed and insured contractor. Check and verify that the certificate of insurance that is produced by the contractors are in effect by calling the insurance company about the policy. Make sure the system has enough coverage for your home project.
Be sure the contractor gets the proper permits. If the contractor does not obtain the working licenses required for the project, then this subjects the homeowner to fines, and the work will not be inspected by the city or county to make sure it is up to code. Work without proper permits can cause problems when or if you decide to sell your home.
Get all lien releases and receipts for products. If your contractor doesn’t pay his subcontractors or suppliers, they can put a mechanic’s lien against your house. You want copies of receipts for all the materials, plus lien releases from all the subcontractors and the general contractor before you pay. You can ask for some of those when it’s time for progress payments as provided in a well-structured contract for services rendered.
Don’t make the final payment until the job is 100 percent complete.
Contractors are well-known for finishing most of the job and then moving on before they get to the final details. Don’t make the final payment until you are delighted with the work and have all the lien releases and receipts.
Florida is one of those states that does not require a handyman or contractor to have a contractor’s license. If you need assistance with your home improvement projects, beware of shady contractors and do not become a victim. For a free legal consultation call, Massey & Duffy.