Is Your Pro a Con?
As the weather warms and home-improvement projects begin, renovation rip-off artists come knocking. Here's what you need to know to see through their scams
Each spring, along with the forsythia and snow crocuses, comes a more disturbing rite of the season. That's when thousands of homeowners are conned by contractors into paying for improvement projects that never see the light of day—or are so slipshod that they never should. As the mercury rises, so do complaints to consumer-affairs offices and attorneys general nationwide. In Illinois, for example, more than 3,000 cases of home-repair fraud are reported annually; Louisiana fields 500 complaints a month.
In the belief that the forewarned is the forearmed, we asked consumer advocates, home inspectors, and trusted builders to tell us about the most common come-ons they see and share their advice on how to avoid falling victim to one of these scams.
A workman knocks on the door and tells you he's just finished coating a driveway down the street and that he's got leftover asphalt to get rid of. He'll repave your driveway for a fraction of what it cost your neighbor. “It's the oldest scam, and it still cons hundreds of people each year,” says Jim Rooney, a home inspector and contractor in Annapolis, Maryland. Typically the material is inferior or it's improperly applied. Then you'll have to shell out even more money to have the mess cleaned up and repaired, Rooney explains.
How Not to Get Taken: Good contractors rely on word of mouth, not door-to-door solicitation, to attract customers. But if you're tempted to take the offer, ask to see the contractor's license and write down his ID numbers. Most states require home-improvement professionals to carry a license, as well as liability and workers' compensation insurance, which offer you protection if the contractor skips out or if someone is injured on the job. Then call your state's attorney general's office, which typically oversees contractor activities, to determine if the guy is actually licensed in the type of work he is bidding on and that there are no outstanding consumer complaints against him. In states where the attorney general doesn't regulate contractors, ask a representative to direct you to the agency that does. You can also get contact information for regulators at contractors-license.org.
Deep discounts can be so irresistible that some homeowners are willing to believe the impossible. Leo and Shirley Schmidt of Yakima, Washington, fell for this one. The contractor pledged that a newfangled sealant would fix their leaky roof so they wouldn't have to replace expensive shingles. The job, guaranteed for 10 years, would cost just $1,000. But when he finished, he handed them a bill for more than $6,000, with no explanation for the increase or for the mess he left behind—green stains on the garage door, fence, and shrubs in the yard. Suspicious, Shirley Schmidt checked him out with the local chapter of the Better Business Bureau, but since there were no complaints on file, she paid the contractor. It wasn't until the leaks resumed after a big rainstorm two weeks later that the Schmidts discovered he had simply painted the roof green and hadn't applied a sealant.
How Not to Get Taken: There's hardly ever a cut-rate alternative to an expensive and labor-intensive job like roof repair or siding replacement. If a contractor says he can sidestep the work by using a new, less costly material, ask for the product name and call its manufacturer to verify the claims. Then, double-check what the manufacturer says with experts at your municipal building department or a knowledgeable salesperson at your local hardware store. A wide variety of building products—including plumbing fixtures, electrical switches, skylights and door hardware—are also certified for quality and safety by independent testing groups, such as Underwriters Laboratories and NSF International, that list results on their websites.
Too many homeowners fork over big bucks for work that never gets done and materials that never make it to the job site. Illinois resident Fe Pascual hired a firm to turn her patio into an enclosed sunroom. She liked the $21,000 bid and was charmed by the salesman. “He told me I had to sign the contract and give him 10 percent down. He left with my check and a contract I had barely looked at.” Within weeks, Pascual received a blueprint for her sunroom, along with a bill for another 20 percent. After pulling the building permit, the company hit her up for
30 percent more. Pascual paid both fees. But that was the last she heard from the company. Through her state's attorney general, Pascual filed a consumer-fraud lawsuit against the company; the case is still pending.
How Not to Get Taken: Payments beyond an initial one-third down (in California it's 10 percent or $1,000, whichever is less) should be contingent upon completion of various stages of a job or delivery of materials that can't be returned, such as custom cabinetry. For projects under $25,000, like Pascual's, follow the 30-30-30 rule. Pay one-third of the cost at contract signing, a third midway through the job, and a third at the end. Retain 10 percent of the final payment in escrow until you're satisfied with the work and all the subcontractors and suppliers have been paid. For bigger renovations, peg payments to milestones spelled out in the contract. For example, cut a check after the drywall goes up, then another once the cabinets are installed, and so on.
You might hear this pitch on TV, get a solicitation through junk mail, or find the offer on a flyer left on your windshield. You take the bait, and after a considerable amount of poking around, particularly in areas that you can't see—on the roof, inside the chimney, in ductwork, in crawl spaces—the guy gives you his diagnosis: You've got big problems. And if you don't hire me to fix them right away, they're going to get worse.
How Not to Get Taken: A contractor who's on the level rarely offers something for nothing, nor will he use scare tactics to drum up business, says Charles Greaves of Contractorposse.com, which posts consumer complaints about contractors. If you can't tag along with the guy during his inspection and see for yourself, ask for pictures of the damage and an explanation of exactly what's wrong. Then get a second opinion. And never pay in cash. Make checks out to the contractor's firm so you have an audit trail or, if possible, choose one of the increasing number of tradespeople who take credit cards. “This allows you to withhold payment if the job isn't completed satisfactorily,” says Greaves.
You hire a repairman to fix a cracked pane in your bay window, but he points out the entire unit could use replacing. He confides that there's a way to get a whole new window free and for him to get paid at no out-of-pocket expense to you. All you do is file an insurance claim saying a windstorm caused irreparable damage. Then, if you hand over the settlement, he'll reimburse your deductible.
How Not to Get Taken: “This is one of those situations where the contractor doesn't say, let's defraud the insurance company, but it's understood,” says James Quiggle,
a spokesman for the Coalition Against Insurance Fraud. “Wink-wink, nod-nod schemes happen all the time, and they can slip through the cracks, especially if the damage isn't so great that the insurance company would send an adjuster to do an inspection.” But making even a small fraudulent claim is foolish, says Quiggle. At a minimum, you risk future premium hikes if it's approved. If the scam is exposed, however, your policy will be cancelled and you'll be subject to criminal prosecution. Then you could find yourself in jail, with plenty of time to ponder why on earth you decided to replace a window that wasn't broken.
"Any time there are natural disasters, scammers come out of the woodwork to take advantage," says Rick Lopes, of the California Contractors State License Board. These crooks, who descend from faraway places and stay for just a few days or weeks, advertise on classified-ad websites and with signs taped to lampposts in hard-hit neighborhoods. They offer to do repairs quickly, without the hassle of obtaining building permits. In exchange, they ask for all or most of the money up front. And although they often finish the work, it's generally subpar. These fly-by-nighters may even leave the house in worse shape than they found it, says Lopes.
How Not to Get Taken: Make sure the contractor's card lists a local business address, not a post-office box. “I'd be very suspicious of a contractor soliciting work where he doesn't live,” says Dean Herriges, secretary of the National Association of the Remodeling Industry. “For a contractor to travel outside of a local radius wastes time and money.” After a disaster, lists of area contractors can usually be found through regional builders' associations, FEMA, and state regulators. Just keep in mind that when your entire town is rebuilding, you may have to line up for that trusted tree-removal service. But it's better to wait than gamble on an unknown.