Some companies and individuals who claim to be home improvement contractors make it their business to greatly overcharge for the quality of work performed and to arrange for loans (secured by a security interest in the home) at high interest and charge rates. Often, such contractors work with lending companies who are very well aware of the contractor's practices, and foster them by continuing to make such loans. Shady contractors and predatory lenders can team up to rob unsuspecting homeowners of the value they have in their homes.
Q: How can I identify a predatory contractor?
A: Predatory contractors often try to rush the homeowner to make a decision to start work immediately. They don't want the homeowner to get other bids for the work. Some predatory contractors will volunteer to inspect the structure and then claim work must start right away. If a consumer is in need of a loan, predatory contractors often insist that consumers use a certain company. Be aware of a contractor who seeks you out. Shop around for your own loan.
Q: How can I protect myself?
A: Do the following:
1) Get two or three estimates and review them carefully to see if the same or different work will be done, and what quality of materials are to be used.
2) Ask about other completed jobs, get names and numbers, and call the references.
3) Check with the Better Business Bureau for any complaints or comments.
4) Decline to pay any more than a reasonable deposit upfront, and get proof of payment.
5) Do not agree to make final payment before being satisfied that a reasonable job has been done.
6) Be sure your agreement states who is responsible for getting necessary work permits and who pays for them-and make sure they have been obtained.
7) If possible, inspect the job as it proceeds, and if problems develop with the job and things seem to be getting out of control, seek help from a person with repair experience or with home or code inspection experience.
8) Be sure you don't sign a contract containing blanks. If there are blanks, insert "N/A" (not applicable) or cross through any blanks.
Q: What questions should I ask?
A: When discussing a job with a potential contractor, ask the following questions:
1) Under what circumstances can the price for the goods or work be changed?
2) How soon will the work start and when will it be completed?
3) Is the contractor licensed, and by whom? Call and verify what you are told.
4) Is the contractor insured? Are workers covered by workers' compensation insurance?
5) If you don't understand any aspect of the agreement, slow down, ask questions and demand answers. If a deal sounds too good to be true, it probably is.
6) Ask the contractor for his/her license number. Verify the information.
Q: Where can I get more information?
A: For information on home scams, visit the National Consumer Law Center's website at www.nclc.org or contact the Better Business Bureau.
This "Law You Can Use" consumer legal information column was provided by the Ohio State Bar Association. It was prepared by Joseph W. Gibson, elder rights division attorney of the Area Agency on Aging in Uniontown.