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Common Home Contractor Scams and How to Avoid Them (and What to Do if they Happen to You)

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By Angela Ward, Attorney

Pennsylvania homeowners spent more than $8 billion on home improvements in 2018, with more than $9 billion in spending projected for 2019. If you’re a Lancaster County homeowner, chances are you’ve spent hundreds or thousands on a home improvement project in the past or you will at some point in the future, especially if you decide to stay in your home for the long haul. When it’s time to put on a new roof, install more energy-efficient windows, or remodel the bathroom, you’ll need to hire a contractor you can trust. Pennsylvania’s Home Improvement Consumer Protection Act offers safeguards for consumers by establishing requirements for written contracts and advertising and making home improvement fraud a criminal offense. The law also provides for the recovery of attorney fees should you need to retain a lawyer.

While most contractors are honest and reputable, beware of the con artist who is just out to take your money. Here are some common contractor scams:

1.   Upfront Payments

How the scam works:

A contractor requests a large percentage of the total project cost upfront, then disappears without ever doing the work. Or, he does shoddy work, knowing that you’ve already invested thousands of dollars and won’t fire him.

It’s not unusual for contractors to request some payment upfront for home improvement projects, especially if they have to order special items such as cabinets or ceramic tile. Typically, legitimate contractors will purchase other commodity materials, such as wood, on account.

For projects greater than $1,000, a contractor in Pennsylvania can’t request more than one-third of the total cost upfront, plus the cost of any specialty materials. You should expect to pay the remaining payments on a schedule based on the completion of work-related milestones. If you’re contractor requests a large percentage upfront, beware. He could have shaky finances or, worse yet, he may take the money and run.

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2.   That Wasn’t Part of the Estimate

How the scam works:

A contractor offers you a low price, but you soon discover that many things you thought were included in that price are not.

All home improvement projects should have a scope of work that delineates exactly what the contractor’s quoted price includes so there are no questions regarding responsibilities. A contractor’s estimate should include a detailed description of the work to be done, along with an itemized list of all materials and services and their costs. For instance, if you discussed pendant lights of a certain quality for your kitchen renovation, make sure they appear in the scope of work. Without that written guarantee, a contractor may install lights of lesser quality, or he may tell you the estimate did not include the lights and they will cost extra.

3.   That’s Extra

How the scam works:

You make changes in your home improvement project, such as choosing different light fixtures or flooring, and end up with a final invoice that’s thousands of dollars higher than anticipated.

While it is rare that a home improvement project – especially a major one – goes from start to finish without a few changes, some of those changes involve more material and labor costs for the contractor. That means a higher cost for you. Any change from the original plan requires a change order signed by both the homeowner and the contractor. Make sure you get the cost in writing of any changes you request, no matter how seemingly minor. Otherwise, something you view as a simple trade-off could result in a hefty surprise when you get the final bill.

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4. The Unlicensed Discount

How the scam works:

An unlicensed home improvement contractor offers you a discount because they avoid the costs of carrying the liability and workers compensation insurance required of licensed contractors. While this may seem like an easy way to save money on a home improvement project, it could be a costly mistake.

Pennsylvania’s Home Improvement Consumer Protection Act requires most home improvement contractors to register with the state attorney general’s office. This law also requires contractors to maintain minimum insurance coverage and use contracts that comply with specified consumer protections. Hiring an unlicensed contractor means you may not have the required building permits for your project. If a worker suffers an injury on the job or the contractor damages your home, you could end up footing the bill. What’s more, if an unlicensed contractor doesn’t finish the job, you’ll have a harder time tracking him down. Always ask for a contractor’s registration number and verify that it is legitimate.

5. “We Were Working up the Street”

How the scam works:

Someone claiming to be a home improvement contractor shows up at your front door and says he’s been doing work in your neighborhood and has leftover supplies. He offers a steep discount but wants an immediate decision.

These scammers will typically offer to repair a flaw they’ve noticed on your property, whether it’s a cracked driveway or an aging roof. However, they will either use shoddy materials or they’ll take your money and never return to do the repairs. Remember, reputable contractors rarely offer unsolicited services or use pushy door-to-door sales tactics. And they rarely miscalculate the amount of materials needed to complete a job. Beware if a contractor contacts you first, especially after a natural disaster. Even if they seem reputable, never make a decision without doing your research first. 

An unreliable home improvement contractor can cost you money and even lead to legal problems. Never hire a contractor without checking their credentials and their references. Make sure you have a written contract that includes as many details as possible, such as a payment schedule, a start date and completion date for the job, warranty information and a detailed description of the project, materials, and costs. If you feel your contractor is dishonest or failed to honor your agreement, contact the Law Offices of Going and Plank. We can help you decide if you should take legal action.

Angela Ward

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