By Angela M. Ward, Attorney
Hiring a professional to handle remodeling projects and general maintenance repairs can cost thousands of dollars. While most contractors and tradespeople are honest and law-abiding, this industry also attracts a regular stream of scammers.
Home improvement fraud is so prevalent that laws have been put in place with specific language protecting the homeowner against unscrupulous workers. The Home Improvement Consumer Protection Act was created to provide legal recourse to homeowners who become the target of fraud. The Act outlines appropriate processes and requirements for contractors and lists penalties for violations. It also provides homeowners with tools to recover their losses and in egregious cases requires the offending contractor to pay the plaintiff’s legal fees. That means that defrauded homeowners can afford to use an experienced consumer rights lawyer to recoup their losses.
The Law Offices of Going and Plank can help Lancaster County homeowners protect their rights and pursue damage in cases of fraud, violation of contract, or misrepresentation.
Make Sure Contractors are Licensed and Insured
A contractor needs to be licensed to comply with the Act and to obtain building permits. If a contractor requests that a homeowner get the permit, red flags should go up to the homeowner that this contractor is unlicensed and unqualified for the job.
Contractors must also be registered with the state attorney general’s office. Before hiring a contractor, it is wise to make sure said contractor is registered. It is also wise to search for complaints against any contractor with the Better Business Bureau.
Another benefit of using a licensed contractor is that it ensures the business carries insurance and bonding, which offer substantial protection for the homeowner. Bonding ensures a property owner receives compensation should a contractor fail to complete the work.
When contractors do not have liability coverage, a homeowner may be held responsible for any property damage or injury resulting from the construction.
Avoid Cash Deals
Requesting cash-only payments is not illegal, but it does eliminate paper trails that could be important in legal proceedings. Cash presents accounting challenges for established contractors, so many businesses discourage its use. In addition, once cash is handed over as a down payment or full payment, it becomes much more difficult to recover. Cash transactions also make it difficult to track down a wayward contractor who may have been operating under a fake name or using a false business identity.
Get a Written Contract
The Home Improvement Consumer Protection Act (HICPA) requires a written contract for all projects totaling more than $500. Homeowners are wise to require such agreements for all work. The Act also requires written change orders for any revisions to the contract. Construction/improvement agreements should include a description of the project, timing, materials required, the total cost of the project, and a payment schedule.
Contracts are also a way to prevent builders from changing materials or scope. The law also prohibits contracts from containing voidable clauses that would waive building codes or the contractor’s liability or limit a homeowner’s right to sue.
Know Legal Restrictions on Down Payments
One of the most common complaints we get at Going and Plank is for contractors who take the down payment and never return. The HICPA limits the size of down payments to one-third of a project’s costs or one-third plus the cost of any special materials. A homeowner should not pay more than one-third of the costs upfront. A contractor will typically request installments for the remaining balance which coincide with milestones of the project. A homeowner should verify licensing and insurance before signing any contract and paying any down payment.
Don’t Pay for “Immediate Signup” Discounts
Use caution if anyone visits your home unannounced to ask for work. Some contractors claim a nearby homeowner just canceled or that they have unused materials and crews available at a discount for immediate use. Fraudulent contractors often use this tactic to prey on unsuspecting homeowners.
Know Your Rights: The Act Requires the Offending Contractor to Pay the Plaintiff’s Legal Fees
When a contractor has taken thousands of dollars, homeowners may worry about paying more to a legal firm. However, Pennsylvania law allows for recovering all costs, applicable interests, and attorney’s fees. A consumer can recoup up to three times the actual damages in some cases.
Please don’t hesitate to contact the Law Offices of Going and Plank in downtown Lancaster. We review cases of potential consumer fraud and provide legal representation to ensure that homeowners receive the compensation they deserve.
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