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Use Caution When Hiring Contractors for Disaster Repairs

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Release date: 
June 2, 1999
Release Number: 

CEDAR RAPIDS, Iowa -- State and federal disaster recovery officials are advising Iowa residents who have disaster-related damage to be extremely careful when hiring contractors to clean-up and repair their homes and businesses.

"In disaster situations, scam artists are often ready to take advantage of the misfortunes of others," warns Jerry Ostendorf, state coordinating officer for Iowa Emergency Management Division (IEMD).

"The recovery process can be a positive one if you take your time, talk to building and floodplain officials, and select a contractor with great care," added FEMA Federal Coordinating Officer Curt Musgrave.

The Iowa Attorney General's Office and the Better Business Bureau offer the following "Consumer Beware" suggestions

  • USE RELIABLE LICENSED CONTRACTORS AND HIRE LOCAL CONTRACTORS IF POSSIBLE: Check with the Iowa Better Business Bureau and local business organizations for outstanding complaints against contractor. Check references and call the Iowa Department of Labor at 515-242-5871 to see if a contractor is properly registered.

  • GET A WRITTEN ESTIMATE: Read the fine print and compare several competing services and prices before settling on one contractor.

  • ASK FOR A WRITTEN CONTRACT: NEVER SIGN A BLANK CONTRACT. State all tasks to be performed, all associated costs, payment schedule, and who applies for necessary permits and licenses. Have a lawyer review the contract if substantial cost is involved. Keep a copy of the signed contract.

  • ASK FOR A WRITTEN GUARANTEE: This should state what is guaranteed, who is responsible and how long the guarantee is valid.

  • GET PROOF OF INSURANCE: Make sure your contractor carries general liability and workers' compensation insurance.

  • PAY BY CHECK: Avoid on-the-spot cash payments. It is best to write a check to the company. Thirty percent of the total cost is a reasonable down payment. If a contractor insists on an advance payment for materials, make the check out to the supplier, or to both the supplier and the contractor.

  • HAVE WORK INSPECTED: This is especially true for sewers or basement walls before they are hidden from view.

  • DON'T MAKE FINAL PAYMENT UNTIL THE WORK IS DONE TO YOUR SATISFACTION. Be sure to obtain lien waivers to ensure that no one who supplied materials can put a lien on your home because the contractor did not pay them.

  • IF NECESSARY, CANCEL A CONTRACT WITHIN THREE BUSINESS DAYS OF SIGNING, being sure to follow contract cancellation clauses. In Iowa, the consumer has three business days to cancel a contract if it was made at your home or away from the contractor's primary place of business. Send notification of cancellation by registered mail.

Persons who are having problems with a contractor or who suspect fraud are urged to call the Consumer Protection Division of the Iowa Attorney General's office at (515) 281-5926, Monday through Friday, 8 a.m.-4:30 p.m. (CDT).

Last Updated: 
July 16, 2012 - 18:46
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