Use Caution When Hiring A Contractor

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Release date: 
June 12, 2014
Release Number: 
NR 039

MONTGOMERY, Ala. – For Alabama storm survivors, hiring the right rebuilding contractor is a key step down the road to recovery.

Consumers who need repair work done quickly following a natural disaster are sometimes targets of unscrupulous business practices.

“Homeowners should look for a contractor with a proven track record who readily offers client references. Most service providers in the building industry are honest, but it’s sad to say that disasters sometimes attract scam artists,” officials say.

Although neither the state of Alabama nor FEMA recommends contractors, officials encourage survivors to take the time to evaluate the bidder before contracting for the job.

By hiring licensed and insured contractors, survivors avoid a lot of problems. 

General tips for hiring contractors include:

  • Check references. Contractors should be willing to provide names of previous customers. Call several former customers who had similar work done to make sure they were satisfied with the job.
  • Research contractors. Call your local Better Business Bureau to inquire about a contractor before signing a contract.
  • Ask for 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.
  • Get a written estimate. Compare services and prices before making a final decision. Read the fine print. Some contractors charge a fee for a written estimate, which is often applied to the cost of subsequent repairs. 
  • Get guarantees in writing. Any guarantees made by the contractor should be written into the contract. The guarantee should clearly state what is guaranteed, who is responsible for the guarantee and how long the guarantee is valid.
  • Insist on a written contract. A contract should clearly delineate all work to be performed, all associated costs, including materials and the payment schedule. Never sign a blank contract or one with blank spaces.
    • Make sure the contract clearly states who will pay for all materials and will apply for the necessary permits or licenses.
    •  Have an attorney review the contract if substantial costs are involved, and keep a copy for your records.
  • Obtain a local building permit, if required. Permits may be required for site work other than demolition, and for reconstruction. Contact your local government for permit information.
  • 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, to be paid upon initial delivery of materials.
  •  Federal law gives consumers a three-day “cooling off” period for unsolicited door-to-door sales of more than $25.
  • If necessary, cancel a contract in the proper manner. This should be done within three business days of signing. Be sure to follow the procedures for cancellation that are set out in the contract. Send the notification by registered mail with a return receipt to be signed by the contractor.
  • Make final payments only after the work is completed. Do not sign completion papers or make the final payment until the work is completed to your satisfaction. A reputable contractor will not threaten you or pressure you to sign if the job is not finished properly.

Remember: if an offer to rebuild your home sounds too good to be true, it probably is.   Most reputable contractors have similar costs; an estimate that varies wildly from others should cause concern.

None of the above should be interpreted as providing legal advice on any particular matter; survivors are encouraged to seek legal advice from an attorney if they have any questions or problems with contractors

Last Updated: 
June 17, 2014 - 11:43
State/Tribal Government or Region: 
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