The storm is over. The damage is done, and you have been left with a huge mess to clean up. Contractors are showing up at your door offering their services. Some proposals seem too good to be true. Are they? Maybe so.
Contractor scams are widespread after natural disasters, but you can protect yourself. Here are a few Do’s and Don’ts to help navigate your search for help during this time:
DO- WATCH OUT FOR UNSOLICITED OFFERS
Some contractors may be on the prowl in the wake of a natural disaster, targeting homeowners whose property suffered damage. They may make promises they can’t fulfill or dramatically inflate prices, which could threaten a homeowner’s financial position at a time when resources already are scarce. There are steps you can take to help guard against these tactics.
First, get at least three estimates in writing.
Have your insurance company evaluate the damage before you hire a contractor to ensure your policy covers the necessary repairs.
Research the contracting companies and compare the bids to see who offers the work you need at a reasonable price. Some contractors may inflate prices after a disaster, but you should keep an eye out for those who seem to charge little to nothing as well (see below).
Be sure to ask for referrals and check with the Alabama Attorney General’s (AG) Office for any consumer complaints. The AG’s office can be reached at (334) 242-7300.
DO- CHECK FOR PROPER LICENSING
The Alabama State Licensing Board for General Contractors requires contractors to have certain licenses and qualifications before taking on a job as a business entity. Contractors must be licensed through the Secretary of State and maintain general liability insurance.
A contractor should be able to provide license documentation and proof of insurance upon your request. It is your job to ask for this documentation up front.
For more information, or to determine whether a contractor is licensed, visit the Alabama Licensing Board for General Contractors website (www.genconbd.alabama.gov) or call them at 1-800-356-6361.
DON’T- PAY ALL OF THE MONEY UP FRONT
A red flag commonly seen in contractor scams is a demand for full payment up front. Contractors who are paid in full at the beginning of a job may disappear, leave the job unfinished, or perform poorly. A good rule of thumb is to split the payments into 1/3 increments – the first to be paid as a down payment, the second when materials are delivered, and the third after all work is completed.
Check for a “buyers right to cancel” clause in your contract in case you no longer want the services performed. Be sure to understand any cancellation rights or penalties for cancelling if those are included. Visit dcm.alabama.gov for full details on the “buyers right to cancel” language (DCM Form C-8, Article 27).
Before making any final payment, you should check with the respective Probate Court in your county to be sure no liens were placed on your property by suppliers or subcontractors. If there were, you should insist on being provided with any releases of the liens and make copies of these documents for your personal files.
Finally, never sign a Certificate of Completion or make any final payments until you are satisfied with the contractor’s performance.
MORE “TRICKS” OF THE TRADE
Some contractors may claim they can complete your job at a discount by using leftover materials from a previous job if the homeowner pays up-front. The homeowner may then find the job done poorly or may never see the contractor again. Further, contractors may attempt to repair roofs by doing “shingle overs” where new shingles are laid on top of the old. This not only adds additional weight to the roof, but it also cuts down on the lifetime of the new shingles.
If a contractor offers not to charge for a deductible or offers to cover the deductible, RUN! This is illegal and could cause you a whole new set of problems.
A contractor also may try to talk you into signing an Assignment of Benefits. This gives the contractor authority over your claim and basically prevents you from having any further say. All payments for repairs will go straight to the contractor, so be aware before signing anything that takes away your control over your claim.
IF YOU FALL VICTIM TO CONTRACTOR FRAUD
If you think you have been scammed by a contractor, you can contact the consumer division of the Attorney General’s office to report the offense. The Alabama Attorney General’s Consumer Protection Hotline is 1-800-392-5658.
The South Alabama Volunteer Lawyers Program provides pro bono (free) legal assistance to low-income clients in Baldwin, Clarke, Mobile, and Washington Counties and may be able to help if you meet financial and case related guidelines. Contact SAVLP at (251) 438-1102 or 1-855-997-2857 for more information.
Thank you to Heather Sands, Esq., for providing this information. Ms. Sands serves as SAVLP’s Disaster Response Project Coordinator. The foregoing is provided for informational purposes only and is not intended to constitute legal advice. You should consult with a licensed Alabama lawyer to get advice about your particular situation.
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