I’m the first to admit it:  there are many more good contractors than there are bad.  But if there’s one thing that gets my goat, it’s contractors taking advantage of consumers, especially our beloved senior citizens.

My grandmother was taken advantage of by a contractor claiming to have extra materials and would give her a great deal on a new roof.  I remember she almost lost her home (the one where we ate our best meals and played many imaginary games).

A sweet little lady who baked cookies for the kids at church, lost over $30,000 when she dealt with a dishonest contractor she hired to update her kitchen.  She was devastated, but never reported it because she was too embarrassed.

My best friend’s dad had liens placed on his home, even after he paid his contractor in full; the contractor never paid the subs or vendor from whom he had purchased materials.  He’ll probably never admit it, but the bad words he used to refer to the contractor were a dead giveaway.  So by the time a shady contractor came my way, I had my guard up.  And thank goodness I did.

Here are some examples of what I learned that have served as valuable guides for me.

1. Got questions?  ASK ASK ASK until you understand, understand, understand.
2. Don’t let your conversation with a contractor serve as a valid or binding agreement for the service he/she is to provide.  Some of them are the best manipulators.  Everything must be in writing. Oral agreements don’t serve as binding contracts—it’s your word against theirs!
3. Depending on the size, complexity and cost of your job, it might be a good idea to have an attorney review your contract.  It may keep you from having to pay an attorney down the road to recover your money or hold the contractor responsible for completion of the work. (Remember, even an airtight contract does not guarantee the quality of contractor’s work or that he or she is honorable.)
4. When you meet with the contractor to get an estimate, pay attention to your gut instinct, inner voice, etc. and how you feel about him/her as a person.  Turn on your radar. Are there any red flags about his personality?  Is he anxious?  Pushy?  Frustrated with your questions?
5. Be sure to tell your insurance agent about your renovation plans before the work starts.
6. Sign nothing unless you completely understand everything you are agreeing to.  Again, an attorney might be a good source if you can’t get straight answers from the contractor or the contract is hard to understand.
7. If a contractor asks you to obtain the building permit, run!  He should obtain the building permit in his name or the name of his business.
8. If a contractor makes a mistake or bungles the work and says he needs more money from you, DON’T give it to him.  It’s his responsibility to fix his error.  Make sure your contract references this issue.
9. Just because a contractor has the lowest price, doesn’t mean he’s the best for the job. Just because he does heavy marketing, doesn’t mean he’s the best for the job. Make sure you check at least 3 references. And remember, the references could be the contractor’s friends for all you know.
10. You should be knowledgeable about the lien laws in your state.  If you don’t know where to begin, you might want to hire an attorney or you can go to explore our web site for information.
11. A surety bond company is there to protect contractors from losing their bond.  They will fight for the contractor.  They are not your friends.
12. Remember, even if the Better Business Bureau does not have a record of complaints against the contractor that still doesn’t guarantee his/her competency or integrity.  Just because “Uncle Mike” recommended him, also doesn’t mean the contractor is honest and reliable.
13. Even today, this is still a necessary caution:  Never pay for the entire job in advance of the work.  If you do, you place yourself at risk of losing your money and/or having to hire someone else to redo shoddy work or complete work left undone.
14. Never borrow money from a lender the contractor recommends. Do your research, talk to at least three lenders, compare financing proposals and choose the one you are most comfortable with—also check them out with the Better Business Bureau before you enter into a financial arrangement with them.
15. If you discover a problem in your remodeling/repair project, before you even discuss it with the contractor, take pictures of the problem.  Make no bones about it:  it’s your money and your treasured home and you want the project done right.
16. The thought of a shady contractor might scare the heck out of you and you might decide to become the contractor of your project yourself.  Be sure to have a clear understanding of the employment laws in your state.  You may be responsible for local, state and federal taxes and may need to register with these entities as an employer.  You may also be required to get worker’s compensation insurance, disability insurance and make unemployment compensation contributions.
17. Be sure to get clear information, in writing, on any warranty or guarantee.  And remember, in a lot of instances, it is only good as long as the contractor is in business.
18. Be sure to know exactly what your exit clause is in your contract with the contractor.  Push come to shove, you need to know what your options are to terminate the contract.
19. This one should be easy to remember:  secure your valuables.
20. And last but certainly not least, never ever ever pay cash!

And definitely check out the other areas of this blog to get tips, advice, and checklists to help you avoid being a victim of contractor fraud.

My grandmother was my pride and joy.  She would be very proud to know that I am now the Executive Director of the National Center for the Prevention of Home Improvement Fraud.  I hope in her memory, some of these tips will keep others like her from becoming a victim of contractor fraud.  Don’t forget to use our checklist before you hire your next contractor.

Yours in Service,
Phae Howard

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