A long time ago when I was younger and newly married, my husband and I were scammed by a contractor. We were renovating our small kitchen and the person we hired took the partial payment we gave him, ripped out our entire kitchen and then disappeared. We made many mistakes in our dealings with this person and we learned a lot (and lost a lot of money in the process). Below I’ve listed some basic tips on how to try to avoid being scammed by shady contractors.
Do your research and ask for references. If you know somebody who had a good experience with a certain contractor, that’s a great place to start. If not, interview a few and ask for references. Also, check the Better Business Bureau and see if there are any complaints filed (although this would not have helped in our case because there were no complaints listed for this man). Also, check to make sure they are licensed and that their license is in good standing.
Don’t give your contractor a lot of money up front! This was our mistake with our kitchen renovation. If you give a dishonest person a large down payment they are either going to disappear on you or they will start to get lazy and do shoddy work. Depending on the scale of your project, HouseLogic.com suggests never giving a contractor more than $1,000 or 10% of the total cost of the project, whichever is less ($1,000 seems like too much to me but, like I said, it depends on the scale of the project). The contractor should be in good standing with his suppliers and have good credit with them so as not to need a lot of money from you to get started. If they say they need money for supplies in order to start work, meet them at your local hardware store, pay for the materials and take them home or have them delivered.
Make sure that everything you want done for your project is in writing in the form of a contract. Before the work starts, discuss with your contractor all the aspects of the project you want done. If he makes good suggestions and you want them done, make sure they are in the contract. If not, those “good ideas” probably won’t be completed unless you spend more than you bargained for originally. If you add or delete anything from your project contract, make sure you and your contractor initial and date the changes. Also, the contract should state the beginning and a good estimate of the completion date of your project.
Hire an inspector. Especially for larger scale projects, it would be worth the money to contact your local building code department or an independent building inspector. Have them look at your project before the work has begun and after to make sure everything is being done properly and up to code. If you are not aware of what needs to be done, then how are you going to be able to determine if your contractor is being honest with you and doing the work properly?
Hopefully with these tips you’ll live smarter, easier, and will remain sane!