By Angela M. Ward, Attorney
For Lancaster County homeowners, home improvement is an important matter. Across Pennsylvania, property owners spend more than $9 billion every year on home improvement. But before entrusting anyone to work on something as important as a home, remodelers must be wary of dishonest workers. Unfortunately, contractor scams are common, costing Pennsylvania residents untold sums of money every year, leaving houses in shambles and their bank accounts empty.
Whether installing new energy-saving windows, remodeling the kitchen or bathroom or fixing the roof, homeowners need builders they can trust. That is why it is important to understand Pennsylvania’s Home Improvement Consumer Protection Act, which keeps consumers safe by regulating contracting work and advertising, providing recovery for legal fees spent in the pursuit of a settlement, and criminalizing home improvement fraud. As a result, most builders conduct honest business but be on the lookout for these contractor scams.
“We Were Working Down the Street…”
This scam happens when a home improvement worker arrives at the door and explains they have been working in the neighborhood. They will sometimes claim they have “leftover supplies” or a job canceled unexpectedly and offer a significant discount – but always demand an immediate decision on the spot. They will identify a flaw on the property, such as an aging roof or cracked driveway, and say that they can fix it right away. However, as soon as they’re paid, they may take the money without completing the job. Or they may complete the job but use substandard materials or mask problems.
Honest remodeling workers do not usually offer unsolicited services. Aggressive door-to-door sales tactics are a sign of questionable business practices.
Reliable builders also know the quantity of materials they need to bring to a job site and won’t miscalculate so severely that they have “extra” for another job on the same day. Never hire anyone without doing plenty of research first.
This scam involves the builder requesting a large portion of the payment before doing work. Then they disappear without doing anything or do incomplete or substandard work. Reliable contractors do sometimes ask for small payments upfront (particularly if they have to order special items like ceramic tiles or cabinets), but they will purchase most materials on account. Under the Pennsylvania Home Improvement Consumer Protection Act, for projects over $1,000, contractors cannot request more than 33% of the total cost upfront (plus the price of specialty items). The remaining payments are typically paid on a schedule with the completion of project milestones. Remodeling teams requesting more than a third upfront are breaking the law and could be scammers.
“That Wasn’t Part of the Estimate”
Another trick dishonest contractors employ is offering a low price initially, then adding on more charges throughout the project. Home improvement projects should always have a clear scope of work laid out in the contract that explains all builder fees. These contracts or estimates should eliminate any question of which responsibilities the contractor assumes and what type of work will be done. An itemized list of materials, costs, and milestones should be included in the estimate. For instance, if a particular tile is promised in a kitchen renovation, it should be listed in the scope of work. Get everything in writing to protect yourself against low-quality installations, switched materials, or unexpected add-ons.
Homeowners should always ask for a builder’s license and registration documentation and verify it with relevant authorities. Licensed contractors are required by law to carry workers’ compensation and liability insurance. However, some contractors offer a discount because they skip this requirement. The savings can tempt homeowners, but they can end up costing far more in the long run.
Under the Pennsylvania Home Improvement Consumer Protection Act, contractors must register with the state attorney general office. This means they need to maintain minimum insurance coverage and use contracts that fit consumer protection specifications. Working with an unlicensed remodeling company means they don’t obtain building permits for the project. Without insurance or permits in place, the homeowner becomes liable for injuries. That means that if a worker is injured on the job or the home is damaged, the property owner can end up paying for it. To make matters worse, if unlicensed contractors decide not to finish a job, it is easy for them to disappear since they aren’t registered.
This scam works when property owners make a change to the home improvement project – such as different flooring materials or fixtures – and then receive a final bill that is much higher than expected. A few mid-project changes are normal, and sometimes they mean extra costs for the remodeling company in labor and materials. However, by law, all changes from the original plan require a change order signed by both the remodeler and the contractor. Again, paperwork on contracts protects the homeowner, so it is essential to get everything in writing. What a homeowner sees as a minor trade-off can end up being a costly surprise at the end of the project. Make sure that all costs, no matter how small, are documented and negotiated with an agreed price.
Fight Back Against Scams
Knowing the red flags can prevent you from getting cheated by dishonest builders. Still, if you fall prey to one of these scams or feel cheated by your contractor, it is wise to hire a qualified Lancaster County home improvement attorney. If you think that your contractor has failed to honor their word or acted dishonestly, contact Going and Plank’s experienced Lancaster County attorneys for a free consultation. They can help you take action and determine the best legal path forward.