How to Protect Yourself from Renovation Scams

Renovations are necessary for every homeowner. They help to keep your home in good shape and ensure it retains its value. They also transform a dull living space into a beautiful and relaxing home. But renovation scams are increasing, making it hard to figure out who to trust. 

Renovation scams include a potential contractor disappearing with your money, doing substandard work, and failing to complete the project. Many homeowners are cheated tons of cash by unscrupulous contractors and fraudsters. This is why you should choose a professional to handle your home renovation project. If you want to renovate your home or apartment, research before hiring the right contractor. This article discusses the key ways you can protect yourself from renovation scams.

Hire a Licensed Contractor

Whether or not it is a local contractor you are looking for, ensure they are licensed to work in your area. You can contact a licensing agency or local government to confirm their license and registration. This adds a layer of security should anything untoward happen. 

Feel free to inquire about the certification, background, and licensing of the people working for the contractor. The employees should be skilled and well-equipped for the work. Renovation is a complex process that only professionals can do best, from initial consultations to scheduling, replacing, and installing preferred materials.  

The licensed contractors know the standards, building codes, and regulations for property renovations. Taking shortcuts to complete the project is not an option for them. Instead, they will adhere to these standards and regulations, giving you the best results you envisioned.

Professionals will recommend what they think is best for you and your property. They will sit with you to discuss the materials required for the renovation project. They also use cost-effective and high-quality materials because they would not like to put your investment to waste and your safety at risk. 

Verify Insurance Coverage

A contractor should have an insurance policy in case of property damage or accidents. If you hire an uninsured renovation contractor, you will be liable for the injuries you or their employees sustain. 

Good renovation contractors have general liability insurance. This coverage ensures the insurer financially covers for injuries sustained during renovation or damages to your property.

Workers’ compensation insurance is also necessary for any renovating company. This covers the contractor’s workers in case there is an accident. The insurance company pays the injured employee, meaning you will not be liable for the injuries sustained during the renovation process.   

The contractor should have proof of insurance. It is a certificate of insurance with the insurer’s name, policy number, and policy limits. It is advisable to contact the insurance company to verify the coverage. 

Everything Should Be in Writing

There should be a contract explaining all the necessary details before the renovation starts. It is easier to understand the project agreement if it is clear and well-written. A lawyer should review the contract for your protection.

A contract must have the project’s start date, completion date, and payment schedule. It can show that you need to pay the contractor a certain sum of money before starting the project and the rest on completion.

The contract should show applicable guarantees. It should also mention the length of validity, what is guaranteed, and the person’s name responsible for the guarantee. Avoid signing a contract with blank sections. 

Both stakeholders should acknowledge in writing changes to the contract. Document every communication with the contractor via phone calls, emails, or text messages. This includes recording changes and delays to the project. 

If you want to cancel a signed contract, follow the contract’s cancelation clause. Send by registered mail the cancelation notification and keep the proof of the cancelation. 

Avoid Large Upfront Payments

Renovation scammers may ask you for a large advance payment before starting or finishing the project. This is a red flag! An advance payment for such projects is up to one-third of the total costs or ranges from 10 to 30 percent of the total cost. 

Scammers can promise cheaper materials or discounted rates, enticing you to make a huge advance payment. Many homeowners fall for these tricks to save money. After paying the deposit, the contractor often gives excuses for delaying or failing to complete the project. 

Some dishonest contractors may ask for an advance payment and disappear with your hard-earned cash. Alternatively, they collect the money but do subpar work or fail to finish the project. 

You should contact several contractors to provide written estimates of the renovation project. Look at their work experience, timeliness, building materials they use, and pricing. You should check these without compromising safety and budget. However, be cautious of contractors offering too low or too high estimates.   

It is good to prepare for unforeseen circumstances because some delays can happen, which may not be the contractor’s problem. For example, weather can prevent a contractor from finishing the project timely. 

Check the Contractor’s Physical Location

You should research and inspect the potential renovation contractor’s business premises. Before signing the contract and making an advance payment, visit the contractor’s registration or physical address. Many scammers out there do not have offices. 

Some renovation contractors you meet at home expositions or go door-to-door seeking work may also offer attractive packages. Homeowners will pay deposits before researching such companies. 

Ask renovation contractors to provide their phone numbers for verification. A reverse lookup service will help you verify if the person is who they claim to be. A contractor with an office or provable contact details is a good option. This way, you can avoid renovation scams and rest assured that you are dealing with the right people. 

Scammers often make beautiful catalogs with dynamic and modern 3D designs. Today, many people can create these catalogs. But scammers may not have proof of ongoing work and satisfied customers. Evidence of satisfied customers, business premises, and work sites helps to prove the contractor is genuine and reputable. 

In conclusion, hiring professionals to renovate your home lets you get what you pay for. A contractor will improve the quality and value of your property. Scammers target homeowners because renovations require a lot of money. You can protect yourself from renovation scams by hiring a licensed contractor, verifying insurance coverage, getting a written contract, avoiding large deposits, and ensuring the contractor has an office. A good contractor will also start and complete the project timely.

Posted in Homeowners on Oct 16, 2023