9 Warning Signs to Help You Avoid Scam Contractors
If you need work done on your home, whether it is roof repairs or installations, remodeling work, or some other project, you are going to need to find a reliable contractor to do the work. It is important to stay vigilant because there are people out there today who will take advantage of you in your time of need. Scam contractors are everywhere and it is important to stay vigilant and to know the warning signs that can help you avoid becoming a victim of a scam. Here at Stay Dry Roofing, we wanted to help you recognize the most common warning signs that you might be dealing with a scammer:
1. Lack of licensing
Ask for proof that the contractor has a license to work in your area and has the necessary paperwork to legally work in the area and on the type of project you need them to do. Contractors coming door to door may not be from a local, established business, and many state licenses do not permit them to work out of the state the license is issued from. Of course, there’s always a risk even with a fully licensed contractor, but the risk is much less than just working with anyone who shows up at your door. “Just because someone has a license and insurance doesn’t always mean they’ll do the best job,” says George “Geep” Moore, remodeler chairman at the National Association of Home Builders(NAHB). “But it does mean they’re a legitimate contractor and they’re doing the right thing.” You can avoid many of the scam contractors out there by doing this one basic thing before hiring anyone!
2. Much lower bids
Before hiring a contractor to do any kind of work on your home you should get quotes or estimates from at least three different companies or contractors. “Have your choices in mind before you get your estimates,” says New Jersey contractor Lucy K.H. Kalian. The more specifics you can give a contractor, the more likely it is that you’ll get an accurate estimate. The Better Business Bureau(BBB) suggests: If you get a bid that’s a lot less than the others, there’s usually a reason for it. The cheapest deal is rarely the best deal.” Think of it like this- if the job will cost a contractor $3,000 for supplies and $10,000 for time and labor, if someone gives you an estimate of $8,000 there is a strong chance they are cutting corners on the quality of the work and the materials they are using. This out you at risk for problems later on after the work has been done and starts to fail.
3. Requiring large upfront deposits
Each state has different regulations that govern how much a contractor can ask for up front. In most cases, it ranges from less than 10 percent to around 30 percent. Upfront payments are needed so the contractor can buy materials and supplies that are needed to get started with the project. So, legitimate contractors will ask for some kind of upfront deposits but if your contractor is asking for what seems like an exorbitant amount upfront tack it as a warning sign that you are likely dealing with scam contractors
4. No permanent business location
“Not every contractor who might come knocking on your door will have a scam — some may have the skills to repair your home, but they may not know how to deal with all the complications that come with a natural disaster and water damage. Be extra careful and make sure that anyone who helps you after a natural disaster is qualified and state licensed” (Houzz). If you call a contractor and they do not answer with the name of the business or you ask for their office location and they give you a mailing address or a PO Box then use caution. They may not necessarily be scammers but if something does go wrong during or after they work on your home you will want to be able to track someone down and speak to someone about your concerns. You cannot do this if all you have is a phone number or mailing address and you end up falling for one of the scam contractors in the area.
5. No contract
The most important part of your negotiation with a contractor is developing the contract and signing it. You should always steer clear of contractors who says a contract isn’t necessary, especially after any type of natural disaster. A contract is a paper that outlines what work will be done, how long it should take, how much it should cost, the pay schedule, the materials that will be used, and other important information regarding the work that needs to be done. While some smaller subcontractors may not work with contracts on a regular basis, is something you still ask for. Even a basic contract is better than nothing because it will help you avoid being taken advantage of and gives you a legal basis in the event the contractor doesn’t finish the work or they do not uphold their end of the contractual agreement.
6. No insurance
Every general contractor that does work on your home or property must be properly insured. It is the contractor’s insurance policy that will protect their workers in case they’re injured on your property. If they do not have the right type of insurance or worse no insurance coverage at all, you are the one who will be responsible for any damage or injury. Say someone falls off your roof or gets hurt while working on your property you could be held liable for their medical bills if the contractor did not have the right insurance. Imagine if a contractor is moving equipment or cutting branches from trees around your home and something falls and damages your neighbor’s property you also will be liable for those damages when the contractor did not have sufficient insurance coverage. You should always as for a potential contractor’s insurance policy number, then calling the insurance company to make sure the policy is still valid, what the coverage limits are, and make sure the contractor has every single employee covered.
7. Inadequate references
Get at least three references for each potential contractor and actually check them. Make sure they are referenced from previous clients that your contractor has worked within the recent past. These are important to get and consider because they can help expose possible scam contractors. Once you have the references, you can then call them yourself to verify that what your contractor is telling you is true. Your insurance company can provide recommendations for local licensed contractors. It is important to never trust someone who shows up on your door saying they are representing your insurance company when you were not expecting someone to show up. It is important to do your research through outside sources as well such as the BBB and local review sites and social media pages like Yelp! As they can offer great insight that you would not have otherwise.
8. Special deals
Avoid working with a contractor who offers you “special” pricing, particularly if you agree to work with them and sign a contract right then and there. You don’t want to rush into an agreement until you know exactly what you’re getting yourself into. Scam contractors will often offer great deals and discount to entice people to agree to work with them without taking the time to think about it, compare rates, and check the contractor out. This should be a major red flag to anyone approached by a contractor in this manner. A legitimate contracting company may have specials and discounts that they can offer but they will have a ‘valid only today’ clause attached to them.
9. Mechanic’s liens
“Legally, an unpaid contractor, subcontractor or supplier can file a mechanic’s lien against your property, which can eventually force the sale of the property in lieu of compensation. It’s a way for professionals to guarantee they get paid…Make sure you have a list of all the subcontractors, laborers and materials suppliers that your primary contractor will be using, and ask for proof that everyone has been paid before releasing your final payment — otherwise you could be held liable. Homeowners can end up paying for supplies twice otherwise — both to a subcontractor and to a supplier who ended up not being paid by said subcontractor” (Houzz).
Contact Us Today
To learn more about avoiding scam contractors and how to make sure you are finding the right contractor for your roofing needs, contact us today at Stay Dry Roofing. We can help you take care of any roofing needs you may have from repair and general maintenance to a full replacement or a new construction installation. Call now to speak to our team or to schedule a consultation appointment. We look forward to working with you and helping you with your roofing needs!