The most common Contractor scam going on here in Michigan is, the homeowner gets a knock on their door and a person who claims to be a contractor tells them that they have been working in the area. While this sort of situation could happen with a reputable contractor as well, it is very unlikely as most reputable contractors are too busy with their own work and don’t have to knock on doors to facilitate more work. If you do get a knock on your door from someone like this, it’s best to just send them on their way.
“If the contractor for your project tells you something that’s too good to be true, it probably is”
Michigan Contractor Scams: How To Avoid Getting Ripped Off
By following a few simple tips, homeowners can greatly reduce the chances of Contractor Scams. Before hiring any Contractor to do work on your property, do your homework, Conduct a Full Background check on the contractor before signing a contract or investing money. Here are a few tips to keep in mind:
- Proper credentials. Make sure that your Contractor has the proper licensing to do work here in Michigan. Insurance and Workman’s Comp is a “MUST” to protect yourself, ask for proof. Check with your local building department to see what is required in your area and look up their license on line. VERIFY A LICENSE/REGISTRATION
- Written contract. Always have a written contract in place before any work is done on your property, make sure that their builders license number is on the contract, and have a detailed scope of work in place as well.
- References. Ask for and actually check references of past jobs and also suppliers they often use. A problem with paying suppliers may alert you to a contractor on shaky financial ground. Your local building department may also be able to inform you of any problems with a particular contractors license or jobs they did in your city.
If you are in the reviewing bid stage of your project and a contractor says he will give you his “special low price” that you must keep secret, move on to the next guy. We have seen this secret low price scam before, this guy is either planning to do some of the work before skipping town or the bid is outrageously higher than it should be, and he wants to keep you from comparing it with others.
Beware Of Up-front payments
It’s not unheard of for a Michigan Building or Remodeling Contractor to request some up-front payment before beginning a job – it gives the contractor peace of mind that the homeowner is serious about moving forward with the project. However, it should only be a very small percentage of the total cost, and should be spelled out in a agreed upon draw schedule. If a Contractor asks for a larger percentage before the job starts, at best it might be a sign that they are on shaky financial ground, and at worst, it could mean after getting that payment you might never see them again.
The Old Extras Game
It’s very rare that a project goes as planned from start to finish without at least a few changes being made by the customer. (Always Put Them In Writing) The alteration may be as simple as a change in style for a paint color or flooring option. However, some changes cause more work or material cost for the Contractor and are known as extras. How these are to be handled should always be spelled out in the written contract so there aren’t any unpleasant surprises at the end of the job. Even more important is that the customer be made aware that something will be an extra and told its cost before the actual work is done. That should eliminate you from thinking your final payment for the finished project will be $5,000, but instead getting handed an invoice for $5,000 that includes $3,000 worth of extras done that you might have thought were even trade-offs during the job.
Finally, Identifying Red Flags Before the Job Starts
Remember not all contractors are scammers, but if you suspect you are being scammed by your Contractor, documentation is your best protection. Keep a daily job journal – just a few notes each day to show the progress and problems. Take pictures of the job at various stages, That way, when walls are closed up, there’s no argument about whether things were done correctly.
If you suspect that the contractor is clearly being dishonest, bar him from the job site immediately, and report the matter to the BBB, Better Business Bureau, your local building inspector and the state attorney general’s office. Contact an attorney to find out about enforcing your contract, punishing the contractor and seeking damages.