Contractor Fraud: What It Is and How to Avoid It
Wherever there are roof repairs to be done and home renovations are needed, fraudsters will be there trying to take cash from vulnerable people who don’t have it to spare. They come out of the woodwork after severe weather events like the tornado that just swept through Dallas, TX, offering to fix your roof for a suspiciously low price or asking for payment upfront. Don’t fall for their tricks! Springtree Restoration is your trusted roofing and storm damage restoration source in DFW, and we’ve put together a list of red flags to watch out for when dealing with shady contractors.
What is Contractor Fraud?
Contractor fraud can be one of many illegal acts perpetrated by an individual claiming to be a contractor. They might try to intimidate you into paying more than the agreed-on price for their work, or they might take an upfront payment and run before completing any work at all. Fraud also covers shoddy repairs and failing to pull the proper permits for their work. A contractor who commits fraud with the backing of a construction company is committing construction fraud.
Common Contractor Scams
Payment Now, Work Later. This one is a classic scheme that often targets elderly or naive individuals who trust the contractor at their word. The contractor asks for a substantial part of the payment upfront — sometimes 50% or even 100% of the price of repairs. Once they have the money in hand, they have no reason to get the repairs done in a timely manner. Some unscrupulous contractors just take the money and run, leaving their victims in financial hardship and without the repairs their home needs.
Avoid this scam by never paying more than 10% before the work has begun. That should be plenty of money to cover the materials the contractor needs to get started.
Undocumented Work. You meet with the contractor and they present you with a list of repairs your home needs, plus some fixes or upgrades they recommend. You agree on a price, which the contractor says will cover everything. As the construction goes on, however, you don’t see any of the improvements the contractor had mentioned. As it turns out, those were never written into the contract, and now he’s demanding more money to get them done.
This fraud can be avoided by carefully reading every contract before signing it. Make sure it contains everything you expect to be done, and don’t sign until it does.
Lack of Permits. If you live within town or city limits, you most likely need a permit before any significant construction is done on your property. If your contractor assures you that they don’t need to pull permits, consider that a red flag. It’s much better to wait a little longer and have the construction be on the up-and-up than it is to risk getting caught and fined by code enforcement.
By asking the contractor to get a builder’s permit, you will cover your bases and also ensure you’re dealing with a licensed worker.
Unforeseen Problems. You’ve signed the contract and repairs have begun. Now the contractor claims that there is unforeseen damage that will require more extensive repairs. He’s already started making those repairs, and now he’s asking for more money to continue. What do you do?
This situation can be avoided by adding a clause to your contract that states the contractor may not increase the scope of the project until he and the homeowner have both approved the change and signed off.
Springtree Restoration: Professionals You Can Trust
Contractor fraud is a growing problem, but you can avoid the headaches it causes by doing business with a trusted name like Springtree Restoration. We’ve worked hard to earn our reputation for integrity and excellent workmanship, and our customers across Dallas-Fort Worth agree that we get the job done right every time. If your home was damaged in the recent Dallas tornado, call us right away for a roof inspection and no-obligation estimate!