Flood Victims: Be Careful When Hiring Contractors For Disaster Repairs

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Release date: 
November 16, 2000
Release Number: 
1348-05

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

"Scam artists are often ready to seize the opportunity to capitalize on the misfortune of others," Ed Teixeira state coordinating officer warns.

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

Use Reliable, Licensed Contractors: Check with the Hawaii Better Business Bureau (808-536-6956) or the local business trades council to make sure the firm has no outstanding consumer complaints filed against it.

Get a Written Estimate: Be sure to obtain a written estimate for the job and read the fine print. Compare the services and prices of several reputable contractors before making a final decision. Hire local contractors if possible.

Check References: Call former customers who had similar work done to make sure they were satisfied with the job.

Proof of Insurance: Make sure the contractor carries general liability insurance and workers' compensation. If the contractor is not insured, the homeowner may be liable for accidents that occur on the property or to the house/building.

Ask for a Written Contract: A complete contract should clearly state all the tasks to be performed, all associated costs and the payment schedule. Never sign a blank contract or one with blank spaces. Make sure the contract clearly states who will apply for the necessary permits or licenses. Have a lawyer review the contract if substantial costs are involved. Keep copy of the signed contract.

Written Guarantees: If the contractor provides any guarantees, they should be written into the contract clearly stating what is guaranteed, who is responsible for the guarantee and how long the guarantee is valid.

Pay by Check: Avoid on-the-spot cash payments; the safest route is to write a check to the contracting company. A reasonable down payment is 30 percent of the total cost of the project. Federal law requires a three-day "cooling off" period for unsolicited door-to-door sales of more than $25.

Canceling a Contract: Canceling a contract should be done within three business days of signing. Be sure to follow the agreements stated in the cancellation clauses. Send the notification by registered mail.

Have Work Inspected: If excavation work is being performed (e.g. sewers) make sure a qualified observer inspects the work before it is hidden from view to avoid similar problems in the future.

Consumers who have problems with a contractor or have been victims of fraud are urged to contact the State Consumer Resource Center at (808) 587-3222 or the Hawaii Attorney General's office at (808) 586-1500.

"Take your time, talk to building and floodplain officials, deal cautiously with contractors, and the recovery process will be a positive one," Teixeira said.

Last Updated: 
July 16, 2012 - 18:46
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