Home Improvement Contractors – What Homeowners Should Know

With home improvement fraud and scams on the rise in the United States, homeowners must take the necessary precautions to avoid becoming victims of “fly by night contractors.” For those who still own their properties after seeing the rise in foreclosures across this Nation, it is incumbent on you the homeowner to do the following before you go in search of a Home Improvement Contractor.

Home Improvement Contractors (HIC) in most jurisdictions in the United States is regulated by City, State or County Agencies. For example, in New York City, Nassau and Suffolk County in New York, the Department Of Consumer Affairs regulates the operations of Home Improvement Contractors and Home Improvement Salesmen (HIS). These are representatives or sales people who negotiate contracts on behalf of Home Improvement Contractors (HIC).

There are basically three (3) stages of the home improvement process, namely: The Negotiation Stage; The Contract Stage and The Work In Progress and Completion Stage. In the Negotiation Stage, a homeowner should perform a “due diligence” on prospective Home Improvement Contractors and Home Improvement Salesmen, hereinafter referred to as HIC and HIS respectively. This is where you research and check to see if the HIC is a bona fide and legitimate operator. You start by calling the Agency that regulates HIC and HIS in your area. Ask HIC and HIS for proof of licenses, workmen compensation, general liability insurance, performance bonds, and references.

You should also check with the Better Business Bureau (BBB) with respect to the reputation of such businesses. Check to see any history of complaints and how they were expedited. Make sure that the HIC/HIS has a physical business address, business telephone, fax, email address, website, etc. Beware of “fly by night contractors” that operate out of their trucks, vans, SUV. It is very important also for you the homeowners to get at least 3-5 free written estimates from HIC and HIS. Some HIC/HIS may charge a reasonable fee depending on the size of the job estimate. For example, those estimates that involves blue prints specifications, plans, zoning, etc. However, you should try and negotiate a free written estimate that expressly state in black and white prices, brand names, colors, designs, start date, completion date, etc. Keep in mind that “word of mouth” is the best recommendation. Get references from HIC/HIS and invest the time to check the jobs and speak to the homeowners directly. Ask questions!

In the Contract Stage, before you sign or execute a contract, make sure that you obtain copies of HIC/HIS licenses, workmen compensation, general liability insurance, performance bond (applicable for large projects), and inquire whether the HIC participates in a Home Improvement Trust Fund. This is a trust fund that the Agency requires HIC to pay into so as to protect homeowners from HIC who takes off before a job is completed. You are required also to make sure that all brand names, styles, colors, any oral promises (some high powered HIC/HIS will promise you the moon to get your signature), along with manufacturer’s and labor warranties to be expressly written in your contract. Most importantly, make sure that the HIC/HIS expressly put in writing a start date and completion date, along with giving you your right to cancel (recession rights).

Most contract laws allow you three (3) business days from the date of a contract to withdraw or cancel the contract without any penalty or obligations. So if you gave a deposit to the HIC/HIS, you are entitled to a full refund within a reasonable period of time not to exceed 10 days. Check with your jurisdiction to make sure of this right. With respect to deposits, some HIC/HIS may require a deposit upon the execution of a contract. Be very careful of HIC and HIS who ask for large deposits up front. Beware of HIC and HIS who wants cash or have checks written out to his or her name. Make checks payable to the Business name only. It is advisable to pay using a credit card. If the HIC is a legitimate operator, it is very likely that they accept credit card as a Merchant. However, the Rule is: Do not give a deposit more than what you can afford to lose. In other words, give a very, very small deposit. A bona fide, reputable and legitimate HIC will not ask for a deposit up front. Such HIC has credit accounts with Home Depot, Lowe’s, and other suppliers who will not rely on your money/deposit to buy materials.

If you are not financing the work through the HIC or a third party lender, it is recommended that you pay progress payments to the HIC. Progress payments are incremental payments. In other words, you pay as the work progresses. For example, if you are getting a roof job done, you may want to give a percentage down (one third of contract price) only on delivery of materials and start of work. Then you give another one third payment when the roof is completed and the final one third when the construction debris is removed from your property. It is advisable to hold back at least 10 per cent of the total contract price for at least 90 days to ensure that the work was done properly. For those homeowners who wish to finance their projects through the HIC or a third party lender, make sure that you do not sign any blank bank papers. You should also ask the HIC/HIS whether the amount you finance will cause a lien or second mortgage to be placed on your property. Make sure that the bank does a visual inspection of the work before you sign a completion certificate allowing the bank to pay the HIC.

Finally, the Work in Progress and Completion Stage; this is the most crucial stage of the work. The HIC is ready to walk away from your project, but you want to make sure that the work was done in accordance with municipal building codes and all of your manufacturer’s warranties, warranty on labor, etc., are given to you in writing. This is where you will be asked by the HIC or HIS to release final payment. If you finance the work, the HIC/HIS will ask you to sign a completion certificate which they will take to the bank to get a release of the funds at your permission. Some banks will do a visual inspection to make sure that the work was done. However, it is very crucial that you make sure that the Municipal Building Inspectors give a green light for your project. In other words, they must sign off on the job stating that all work was done professionally and in accordance with municipal building codes. Some jobs may require a certificate of occupancy (CO).

Make sure that you have this CO in your hands before you release final payments to a HIC/HIS. Last but not least, if the HIC hires Sub Contractors such as an electrician or plumber to do work on your property, make sure that they are paid by the HIC. Failure to pay them may result in the Sub Contractors filing a mechanic’s lien against your property. This is legal. While the work is in progress, make sure that the workers are on time on the site. A normal work day for construction workers are from 8:00 am to 6:00 PM. Some industrious workers will work until it gets dark. Beware of workers that show up for a few minutes and take off. There are many HIC who start 20 jobs and cannot finish one. Some HIC take from “Peter to pay Paul” and stall your job in the process. This is why it is crucial that you get a start date and completion date in writing.

If the HIC fail to complete the job within that time, you the homeowner may legally hold back money or charge the HIC for each day that elapsed. If your work is an exterior job that involves ladders, scaffold, etc., make sure that they are erected properly and reasonable standard of care is exercised by the workers. In other words, if a scaffold or ladder fall and injure a neighbor or passerby, they may have a civil claim or lawsuit against you the homeowner. This is why you must ensure that the HIC has proper insurance such as general liability insurance before they start work on your project. If you the homeowner permit the HIC to advertise their companies by erecting a sign on your property, you may request a discount on your contract for such favor.

I hope that this post will help you to select the right Home Improvement Contractor for your project, and most of all, you will not become a victim to the criminals out there who masquerade as Home Improvement Contractors.

Patrick Pearce is Founder, President and CEO for Southeastern Development & Consulting Group, Inc., a Florida Corporation.

Patrick Pearce earned his BA degree from the City University of New York and his law degree (JD) from Hofstra University School of Law in Hempstead, New York.

Patrick Pearce works as a Consulting and In House Attorney with various Law Firms and Government Offices.

Home Improvement and Home Remodeling – Spicing Up Your Home

Everyone wants their house to be beautiful. We all would love to do a whole new makeover on our house and make it brand new. In fact, most people would love to build a brand new, from scratch, gorgeous house; designing everything exactly the way we would want it to be. This is not always a realistic option, but it is a nice dream.

It may seem like all the neighbors on your block are moving out; headed to bigger and better places, while you stay in the exact same house you have been in for decades. Or, they may stay put, but they knock down their already giant houses and start building from scratch. This may make your one hundred and fifty year old house look decrepit and like a small fish next to these new and improved giant sharks. At the very least, your neighbors are probably doing some home remodeling that leaves their interior looking like a small museum. How do you live like this? How can you watch all these football fields being built and still feel good about yourself? It’s not easy. Luckily, there are home improvements and home remodeling that you too can do without taking out a second mortgage.

If you go through each room in your house and make a list of what you want fixed up, eventually it will. Pick certain things that are priority and then get started. There are many things you can do yourself that does not warrant hiring people; fixing broken objects and throwing out the non-fixable ones is a way to start. This makes a difference you can not realize until it is done. It is the perfect way to start; as it paves the way for everything else, and enables you to see what you need new.

This is how you start; by doing the small home improvements even a little remodeling. Then, if your wallet allows it, you can move on to the bigger home remodeling.

Start with the things that can not last any longer. If your blinds and windows in your living room are cracked and broken; that is a great place to start. If there is plumbing issues in the bathroom; that is also a great starter. Then, move on to see how your walls in the house look. You would be surprised what a paint job and new blinds can do for the look in your house. Another big one is carpeting; either new or ripping it up and laying down new floors. That is a tremendous difference in the interior of your house. These few things are the starting points for all your rooms. They can make a world of a difference in the way your house looks; while at the same time it is much more affordable than completely renovating.

Once you have finished the smaller jobs, you can see that there really are not as many big jobs as you thought; because they all go hand in hand. Of course, once you want to move onto bigger things, you can start knocking down walls and completely remodeling each room.

Before you cringe at the bill; don’t. There are things you can do for home improvement that are quite affordable. There are also home remodeling options for cheaper than you think. You don’t have to be the only one on the block with old blinds; to peek at the neighbors new remodeling.