“How to Avoid Home Repair Problems and Scams”
July 20, 2011
There are many reputable and honest home repair persons and contractors, but, unfortunately, we hear about how dishonest persons prey on innocent homeowners or the elderly, take their hard earned money and leave them stuck with uncompleted repairs and projects.
- Generally, you will be best served by dealing with local contractors who have an actual place of business and have been recommended by friends, family members, or reputable building supply stores. Be wary of unmarked or out-of-state trucks.
- If you have been tricked into signing a contract by a door-to-door salesperson, you do have the right to cancel a door-to-door purchase within three days of the purchase if the item sold is for $25.00 or more. The seller has to give you written notice of that right and must tell you that you have the right to cancel. As long as you return whatever goods have been sold to you in the same condition, you are entitled to a refund of the money you have paid out. Keep in mind though that you must be able to find the person who sold you the items and took your money in order to get the refund. This is why it is so important to ensure you are dealing with someone reputable and who has an actual place of business. ALWAYS FEEL FREE TO SAY NO.
- Be very careful when a contractor or a repair company offers to finance a job. Some home improvement contracts involve the contractor or another lender getting a mortgage on the person’s property as security for the loan. You may also have a contract that is padded with additional charges above and beyond the price you negotiated, or a very high interest rate.
- The federal Truth in Lending Act requires that you be given notice of the right to cancel any contract where a creditor could take an interest in your home. This means that if you’re using your home as collateral for the loan, you have to be specifically told that this is part of the contract and be given notice that you have the right to cancel this contract within three business days.
- As with any other contract, make sure you read it carefully before you sign anything. It never hurts to have a second pair of eyes review it. Never sign a blank contract.
- A contract for home improvements or repair should set out parties’ expectations, rights, and responsibilities. It should specifically list:
- Names and addresses of both parties (Check to make sure the contractor has an actual address, not a P.O. Box.)
- A detailed description of ALL work to be done and the materials to be used. Don’t assume you can rely on what the contractor has told you. It must be in the contract.
- A start date and a completion date
- Details about the payment arrangements — the amount down, monthly payments, forms of payments accepted
- Specific responsibilities like clean-up, obtaining any permits necessary, trash disposal, etc.
- Detailed description of all materials to be used including brand names and model numbers. Make sure that the contract does not allow substitution without your permission. This could allow the contractor to use an inferior product.
- How much the contractor will charge for any changes being made — i.e. you contract for laminate counter-top and you then choose granite.
- A penalty clause if the job isn’t completed on time. In this situation there will likely be a bonus clause if the job is completed early.
- Do not pay the contractor in full before all work is done.
What are some red flags or warning signs that would tell me I should steer clear of a contractor or business?
- Do not deal with contractors who say they are “in the neighborhood” and have materials left over from another job and offer to give you a lower price. If they’re shorting the materials on the job they’re doing now, they will do it with your job as well.
- Do not deal with anyone who offers you a low price ONLY if you sign now and commit today. You should always have a chance to think things over and review any paperwork before you sign it.
If you need a referral to an attorney practicing in the area of collections or consumer law, contact the Allegheny County Bar Association Lawyer Referral Service at 412-261-5555.