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Trailrider #896

Contractor scams

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According to the Denver Post, a family hired a "contractor" to do a renno job in their home.  The guy tore out their kitchen, left a mess and failed to show up.  They allegedly had paid him a couple thousand dollars upfront, and allegedly about $8,000 more in cash!  Turns out the guy did not have a license, and a bunch of bad revues on the BBB. He claims the family owes him money!  They are stuck, at least for the present.  They got his name off of Facebook!

 

The lesson here are:

1. Before you pay a dime, get an estimate on the job in writing.  Get several estimates from known contractors!

2. Specify a completion date, and penalties to be assessed in the event of an overrun of time.  (Know this from experience!)

3. Have all materials invoiced to the homeowner, and the materials paid for by check made out to the vendor, with delivery to be made to the worksite.  This should be paid C.O.D. if at all possible.  Or use a credit card or cards.  That way, if there is a problem the charges can be reversed.

State in the contract that, if any subcontractor (plumber, carpenter, electrician, HVAC expert) has not been paid prior to final payment to the general contractor, the purchaser has the right to pay them directly and deduct the amount from the general's final payment.

4. Ask for copies of the contractor's license with the state, county or municipality.

5. Ask for copies of the contractor's workman's comp insurance policy.

6. Be sure that a work permit or permits (there may be separate ones for foundation, framing, electrical and plumbing, depending on the scope of the job).

7. Pay in increments. No more than one-third in advance, and the rest as is stated in the contract, considering the milestones to be reached at each increment.

8. If the homeowner is to do part of the job, the exact part should be specified in the contract.

9. When the job is complete be sure to get a release of mechanics liens from any subcontractors, indicating they have been paid.  Get this before you make the final payment to the contractor. If any subs haven't been paid, notify the contractor that you will pay them and deduct those payments from the final payment.  As I said, that should be in the general contract.  That way, you won't have a mechanic's lien placed on your property.

10. Have an attorney either draw up the contract, or at least look it over before you sign.  The money spent will be well worth it!

Get references, preferably from people you know, and do a check with the Better Business Bureau, and possibly with the local consumer affairs outfit.

 

Any contractor that won't agree to these things, IN WRITING, should be shown the door immediately!

No, I am not an attorney. If anyone else has any comments, please jump in.  I have kept myself and my family out of a lot of expensive trouble by paying attention to these details..

 

Oh, and if you have hail damage to your roof, be especially careful! Call your homeowner's insurance agent to get an estimate from him/her.  Do NOT let the proposed contractor say they will "work with the insurance company".  Don't let a prospective contractor to accompany the insurance inspector. 

 

Good luck!  Remember, anyone who owns their own home deserves it! (Take that any way you want! :unsure: 

Edited by Trailrider #896
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Thanks for the tips, I'm about to be dealing with some home repair contractors myself.  Some of those tips I knew, but some I didn't...glad I do now!

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You should pay the materials cost yourself- to avoid a possible future lien when the 'contractor' defaults.

OLG

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I get several bids with the materials used specified.   All of the jobs I have done usually only take a few days, like painting the house or putting on a new roof.  When the contractor asks for money up front for materials, I ask him how long it will take him to complete the job.  He'll probably answer 2 or 3 days.  I then tell him he'll get paid in full upon completion and if he can't front the materials for 2-3 days, he's not a big enough outfit to handle this job.  That way, I get undivided attention on my job and I haven't had any no show problems.  Room additions or a large building project is going to be different but for the smaller jobs, it's payment after completion as far as I'm concerned.

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I had a well known professional company who was known all over the greater Phoenix area contract to remodel my kitchen.  Signed a contract and paid a relatively small upfront fee but after five months of no contact (didn't call me nor respond to letters and emails or return my calls) I filed a complaint with the Arizona State Registrar of Contractors and sent copies to the local Contractor's Association rep who is on radio and tv and in magazines all the time telling people to hire licensed contractors.

 

It took only three weeks until they finished the job and they got ticked off when I wouldn't sign off on the job.

 A month later I called them back about some issues and the girl gave me a hard time.  I told her to check my file and see if she thought I wasn't willing to call in the Registrar again.  

 

Two days later I had a guy there and I still wouldn't sign off on it.  I held them up another month before I signed.

 

Drop the hammer on them.

 

BTW, I recently found out that a major building contractor in Phoenix fired them because they weren't getting the jobs done so the builder could finish the houses....hundreds and hundreds of houses.

 

I've found some local, unlicensed handyman types who do wonderful work, but I get a lot of references and check them all before I agree to anything.

 

"Licensed contractors" haven't impressed me much.

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