Avoiding Disaster Repair Rip-Off
Avoiding Disaster Repair Rip-Off: Choosing A Contractor
Many times following a natural disaster one of the major problems faced by the victims is predatory home repair rip-offs. These unscrupulous individuals will appear on the scene of the disaster very quickly looking for victims. There will be individuals who legitimately want to help and are simply offering to provide you with a valuable service. These builders or contractors, who are properly licensed and credentialed, are your best bets during this difficult time. West Tennessee Legal Services and the Jackson Area Homebuilders Association want you to have some tips to help you choose a builder or contractor and avoid the rip-off artists who might contact you.
▶ Make sure you know the person with whom you are dealing and the company he or she represents. Deal only with licensed and insured (or bonded) contractors. Require proof of the identity of their company and of the license and insurance. Don’t make the mistake of only looking at a business card. These cards are easy to get and often contain false information.
▶ To investigate the person or company, get a list of references with phone numbers and addresses, and check them out. Ask for proof of license and insurance or bonding. Call the Better Business Bureau to see if there are any complaints against them, and to report any suspicious or inappropriate actions. You can also check with friends, relatives, insurance agents, and adjusters for information on the company or to get suggestions for other contractors.
▶ Write down the license plate number of the vehicle driven by the builder or contractor to aid in identification. Take note of the color, make, and model of the vehicle that is being driven, with special attention to whether or not the vehicle has company logos, names, addresses, phone numbers or identifying information. Be especially suspicious of unmarked trucks, vans, or other vehicles. If you have already been scammed, to call law enforcement.
▶ If you have questions about the identity or credentials of a builder or contractor, one of the most helpful things you can do is call the Jackson Area Homebuilders’s Association at the number listed above for a list of reputable contractors. The Association services eleven counties, including Madison, Gibson, Haywood, Crockett, Carroll, Benton, Decatur, Henderson, McNairy, Chester, and Hardin counties. At this time of need, the Association will also serve residents of Hardeman county who were affected by the storm.
▶ Be very suspicious of high pressure door-to-door tactics and offers of reduced prices due to “leftover materials” from other jobs. This is especially important to remember when you are under pressure or are stressed from the loss you have suffered. These rip-off artists depend on being able to pressure you to act fast to get the “bargain” they offer. Many of the scam builders will have inferior or inappropriate materials and will not provide you with adequate workmanship. They often pressure you to spend a large amount of money on only temporary repairs. They may even damage your home. They will be gone as quickly as they appeared, and you may have no opportunity to question them about the work or take legal action against them.
▶ Be suspicious of a builder or contractor who asks you to pay for the whole job at the beginning. You should never pay even a deposit until you are sure of the contractor and the company. Even then, you should never pay more than one-third of the amount up front.
▶ Pay by check or money order, but not cash. This is so you have a record of the transaction. You should question the builder or contractor very closely about his coverage for worker’s compensation, property damage to your home, and general liability.
▶ Never write a check or pay cash to the individual contractor for building materials. Make the builder give you a written list of the materials required for the job, and then you go directly to the supplier of your choice, and consult with them. Many times these stores will have personnel who know the contractor and who may know about the materials needed for the job. Once you purchase the materials and they are delivered, you should monitor the use of the materials by the builder.
▶ Maintain contact with the materials supplier and ask them to contact you if the builder attemps to return or exchange any materials, especially in return for cash. Remember that you purchased the materials; you own them; and the builder or contractor should not be allowed to take away the “leftover” materials that are in good condition. The contractor or builder may be required under the contract, to clean up the work site and haul away scraps and trash.
▶ Be aware that, under certain circustances, builders, contractors, and suppliers can take a lien to secure payment for such things as labor, materials, or payment for work that is partially completed. If this happens, contact an attorney immediately.
▶ If you have insurance, you should contact your insurance agent immediately. If at all possible, you should wait for the adjuster since your insurance policy may require the adjuster’s visual inspection before the insurance authorizes payment for repairs. If possible, you should make only temporary repairs until an adjuster looks at the damage. Get at least three estimates from three different reputable builders. Ask if there is a charge for the estimate. Remember that the best person for the job is not necessarily the lowest bidder.
▶ Always keep a written record of your activities in a diary, notebook, or calendar. This is an important source of information when trying to recall details about your discussions with the contractors and builders and other post disaster events.
▶ When you decide on a builder or contractor, don’t let them force you to sign the contract immediately. First, read the contract carefully and ask as many questions as it takes for you to understand the terms. If you can’t read or don’t read well, ask someone you trust to read it to you, or consult a lawyer. You should make sure that the contract specifies when the work will start and when it will finish. Make sure it has clear, understandable terms as to what happens and who is liable if either party “breaches” (doesn’t act according to the terms) the contract.
▶ For door-to-door sales a proper contract should contain a section that addresses the “buyer’s right to cancel.” Usually, the homeowner has up to three business days to cancel the contract, but the cancellation should be in writing. Many times the homeowner will get promises from the builder or contractor to do other repairs or work that is not in the contract. This might come up when the homeowner notices additional damage or wants to change the way something is being done. It is extremely important to add these additional items to the contract. If you don’t do this, the builder or contractor may not have to do them or may fail to do them, claiming no memory of your discussion.
▶ Never sign a contract with blanks that are not filled in properly. Never release the final payment for the work until all of the work is completed according to the contract. If there is anything about the contract that you do not understand, you should consult a lawyer.
▶ You should be extremely careful about signing a contract for building or repair service that requires you to use your home or property as security or collateral for the work. This is very risky. If you fail to act according to the agreement, you could be in danger of losing your home. Many times, unscrupulous builders or contractors will inspect your home and tell you that your repair will cost a large amount of money. Then, they will explain that they just happen to know someone who will lend you the money, usually in exchange for using the title to your home as security for the loan. The loan is usually at a very high interest rate and spread out over a long period of time. Many of these contracts will not have provisions designed to protect the homeowner or borrower. You should always have a lawyer review the contract or agreement before you sign it. After the agreement is signed, it is much more difficult to get help with problems, even from a lawyer.