When disaster strikes your home, there are many steps to take to begin reconstruction. After ensuring that your family is safe, it is time to begin dealing with insurance companies, removal specialists, and contractors – all professionals necessary to help in the rebuild process.
For the most part, the majority of contractors, like A&J Property Restoration DKI, are honest and hardworking; and in this profession because they truly enjoy helping others. However, there are less admirable individuals that like to take advantage of others during an emergency. When hiring a contractor, it’s imperative to watch for warning signs that your home repair professional may be a scam.
Warning Signs of a Construction Scam
While this is not a definitive list of warning signs, these five red flags are things to look for when hiring a contractor.
1.Asking for the money up front. When you review contractors on the Better Business Bureau, upfront payment is the number one construction scam reported by consumers. During this ruse, a contractor will explain the need to order reconstruction materials and equipment and ask for 30% – 50% of the total project cost up front.
This seems like a legitimate request to most individuals, but once the fake contractor has your money in hand, they may disappear with your cash! If they continue the job, it could be subpar work, as they have already been paid for their services.
Legitimate contractors may ask for payment upfront, but it’s typically never more than 10% of the total project or $1000, whichever is less. In fact, there are some states that require this by law! Equipment rentals are typically handled through vendor credit and don’t require rental fees.
2. Explaining that a permit is not required for their particular project. Here’s the truth – a permit is legally required for any large reconstruction project. Government and building officials need the permit to legally drop in and verify that everything’s up to code and safety standards. Without a permit, there is no record of the work.
For smaller jobs, a shady contractor may try to explain that a permit isn’t needed to get around the laws. Another common permit scam is a contractor asking you, the homeowner, to apply for a homeowner’s building permit – which effectively lies about who is actually doing the work. It also makes you responsible for any safety questions that arise from inspections, not the contractor!
To prevent this from happening, always demand the contractor get a building permit.
3. During the initial consultation work that was discussed is not added into the contract. A good contractor will add all discussed upgrades and repairs to your contractual agreement. A not so legitimate contractor tends to verbally add in suggestions without getting them in writing. Pretty soon, the “extras” that you discussed aren’t actually happening and you are being asked for more money if you actually want them completed.
The best way to protect yourself against this type of scam is to ensure that everything discussed is in the contract before you sign. If you notice anything missing, add it in! Be sure to have the contractor initial next to any additions – and you add your initials as well!
4. Hiring a contractor that appears without you calling for an appraisal. This isn’t too common, but it does happen in times of natural disasters. If your home is in obvious need of repairs, a fake contractor may take advantage and appear at your door. They’ll explain that they happen to have extra materials and can take care of your problems for an incredibly low price!
Do not hire a contractor on the spot. Contractors will not show up at your front door asking for your business ready to work. Take your time and research your contractors before making a decision and signing with a company!
5. Finally, if your contractor uses the “we ran into unexpected issues” excuse, it may be a sign to bring in an inspector. Contractors that use this scam do this once the job is underway, or even complete. The price suddenly doubles due to issues that were unforeseen, such as structural problems or interior damage.
Some of these issues may be legitimate. If you are unsure it is well within your rights to call in an inspector from your local building department for an impartial opinion.
While these scams do not happen all the time, it is important to be prepared in case of fire, flood, or other natural disasters. At A&J Property Restoration DKI, we pride ourselves on our restoration services for all disaster types.
Our teams are leaders in the Milwaukee and Madison construction industry. We work with your satisfaction in mind. Contact us for more information today.