By Angela M. Ward, Attorney
Thanks to remote work and virtual school, Lancaster County residents spent more time than ever in their homes over the last few years. As a result, many have decided to make changes and improvements in their living spaces. While some people will want to flex their DIY muscles, others will rely on contractors to complete the work.
Hiring a professional to handle remodeling projects and general maintenance repairs can cost thousands of dollars. But some homeowners have discovered that certain builders are unethical or even dishonest. The Home Improvement Consumer Protection Act puts safeguards in place to shield homeowners from fraud. It outlines requirements for contractors, criminal penalties should they fail to follow them, and tools for clients to recover their losses. The act even requires the 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.
However, the best way to protect against fraud is to learn how to spot it before becoming a victim. Here are a few tips to keep in mind for your next home improvement project.
Check Contractors’ Licenses and Insurance
Always take time to research a builder or remodeler before accepting a bid. Verify their registration with the state attorney general’s office, check for references, and search for complaints against them with the Better Business Bureau. If it sounds too good to be true, it probably is.
A contractor needs to be licensed to secure a building permit, but homeowners do not. So, when a hired contractor asks a homeowner to get the permit, it’s a warning sign that the contractor is unlicensed.
A licensed contractor must also carry insurance and bonding, which offer protection for the homeowner. Bonding is a safeguard that ensures a property owner receives compensation should a contractor fail to complete the work. Hiring someone without such coverage could be a costly mistake.
Similarly, if a builder doesn’t carry liability coverage, the customer is held responsible for accidental property damage, whether as minor as a cracked window or as major as a broken sewer line. The homeowner could also end up paying repair costs for mistakes or even for injuries.
Avoid Cash Deals
Requesting cash-only payments is not illegal, but it could be a reason to proceed with caution. Cash deals eliminate the paper trail that credit cards and personal checks provide. In addition, paying with a check or credit card creates the kind of records needed to fight fraud.
Fight Back Against Consumer Fraud by Insisting on a Written Contract
Among its many consumer rights safeguards, the Home Improvement Consumer Protection Act requires a written contract for all projects totaling more than $500. Such agreements must include a detailed description of the work, the specific materials required, the total cost of the project, and a payment schedule.
Contracts also must include a set of specifications, which the builder cannot change without a written order signed by both parties. As further protection, the law prohibits contracts from containing voidable clauses that would waive building codes, a contractor’s liability, or the right to a jury trial or limit a homeowner’s right to sue.
Before signing an agreement, make sure the document includes the full scope of the work, including an itemized list of the specific materials and their costs. Without this written guarantee, a contractor might install items of lesser quality.
Beware of a Request for a Large Down Payment
It is not unusual for a reputable builder or home improvement business to request a down payment before beginning a project. Just as homeowners must protect their financial interests, so must the professionals they hire to work on their property. Upfront deposits can serve as a sign of good faith, especially if a contractor must purchase expensive supplies such as custom cabinets or tile.
However, contractors who ask for large sums upfront may have financial problems related to poor business practices. If they can’t cover the costs of starting the project, they may take the money and never come back. Even if they do return, if a homeowner has already made a substantial financial investment, it’s harder to dismiss a contractor for poor work
Pennsylvania law makes it illegal for contractors to ask for a down payment exceeding one-third of a project’s costs or one-third plus the cost of any special materials. Never pay more than that. A trustworthy professional likely will divide the remaining balance into installments scheduled to coincide with milestones in the project.
Beware of a Steep Discount for Signing on the Spot
Use caution if someone comes knocking with a promise to repair an aging roof or a cracked driveway with leftover materials from a job down the street. Fraudulent contractors often use this tactic to prey on unsuspecting homeowners.
Reputable contractors typically do not miscalculate the materials required for a job, and they don’t need to go door to door drumming up business. Think twice before jumping at an unsolicited offer, no matter how enticing, especially if they demand an answer right away. Such scammers often do shoddy work or, worse yet, take the money and run.
Enlist the Help of a Lancaster County Lawyer
Sometimes even the most cautious homeowners can fall victim to an unscrupulous contractor. Fortunately, they have rights, even when there is a written contract. Pennsylvania law allows for the recovery of all costs, applicable interests, and attorney’s fees. In some cases, a consumer can recoup up to three times the actual damages.
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.
