Seven Common Contractor Scams

Learn what you need to know to protect yourself from less-than-honest contractors in this article from Lindus Construction, the Twin Cities’ trusted home remodeling company.

1. Storm Chasing Contractors

After a major hail storm hits, it’s not uncommon for storm chasing contractors from several states away to arrive soon after and start going door-to-door offering their services.  Panicked homeowners can get baited in by promises of swift storm damage roof replacement.  Oftentimes, storm chasing contractors fail to complete the work, incorrectly finish it, or fail to pull proper permits.  Those that fail to carry insurance or are underinsured also prove problematic, because the homeowner can incur the expenses if installers are injured or their home is damaged.

2. The Lowest Bidder

Oftentimes, the lowest bid is often accompanied with a vague contract that does little to elaborate on materials being used, warranties that are offered, or a work completion date.  This tactic is a method to get a homeowner under contract without really knowing the specifics of the job.  The lowest bidder may also be able to offer the price they can because they are skimping on items such as wages, insurance, and workers’ comp.  It’s best practice to get bids from three contractors with all project elements clearly spelled out. This provides the homeowner the ability to make sure they’re getting a fair price by a reputable company.

3. Jumbo Down Payment Requirement

A down payment is to be expected, as a contractor needs funds to purchase materials for a job.  However, it should be a red flag if more than 30% is required upfront.  This gives the contractor little incentive to show up and complete the work in a timely manner, if they even complete it at all.  In fact, they may be using your money to pay for another project they’re behind on.

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4. Project is Halted Until More Money is Paid by the Homeowner

Some issues such as dry rot, lead, and structural issues may not be evident until demolition has taken place.  When this occurs, the proper procedure is to have a written change order signed by both parties added to the initial contract before any work is commenced.  Contractors continuously coming back to homeowners and requesting more money likely are behind paying their subcontractors or are not capable of properly managing their funds.

5. The Homeowner is Responsible for Pulling the Permit

Beware of any contractor that states the homeowner should pull the project permit in order to lessen the cost of the project.  When this request is made, it can signal the contractor either doesn’t have a license or that it’s been retracted.  The permit holder is the party responsible for the project being code compliant and making any necessary updates to the work to pass inspection.

6. Same Day Discount

Subpar contractors use this tactic to pressure homeowners into signing a contract before they’ve had the ability to interview anyone else.  They know if they do, you’ll likely sign with another firm.  While material prices can fluctuate over time, construction proposals are typically good for 30 days.

7. Failure to Operate Under Their Own License Number

Holding a contractor’s license number demonstrates that they’ve passed the required exams and are current on their continuing education credits.  Contractors that have their license revoked can have issues getting it reinstated and may work under the license number of a family member or friend.  Other times, contractors may act as if their license is current, when it may not be.  It’s in your best interests to verify that a contractor’s license is valid by visiting the website of the issuing agency in the state you reside.

Contact us today to get started on your next home remodeling project.