Top Contractor Scams and How to Protect Yourself - On The House

Beware of Top Contractor Scams

By on May 21, 2018
Contractor Scams

“Well, he seemed legit” is what many homeowners end up saying after realizing they’re out the $1,500 they handed over “for materials” and stuck with a job barely done.

While most contractors are honest, hardworking professionals, a few bad apples can spoil it for everyone. Here are five ways to identify if a contractor could be scamming you, and how to protect yourself:

 

Scam 1: I’ll Need the Money Up Front

This is the most common ruse reported to the Better Business Bureau.

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.

 

Scam 2: Take My Word For It

How to protect yourself:

Unfortunately, you have few — if any — legal options against your contractor 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

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

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 homeowner and contractor.

 

Scam 5: I’ve Got Extra Materials I Can Sell You Cheap

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.

 

Source: https://www.houselogic.com/remodel/budgeting-contracting/top-5-contractor-scams-and-how-avoid-them/

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