Most home contractors are honest and hardworking, but sometimes you may experience contractor theft. Occasionally, as with any industry, some people aren’t on the up and up.
Common instances of contractor theft
- Contractors may defraud their customers by requiring a substantial down payment to initiate the work, often requesting 100% upfront, and then failing to complete the job or only completing a token amount of it. The acceptable amount down that a contractor should require is between 10% and 25%. Many states have laws that set limits on contractor down payments.
- A contractor may perform subpar work, use inferior materials that don’t last, or employ a combination of both.
- The contractor may intentionally underquote the price or “find” unforeseen problems. He may agree on a price with you, but then, as the job gets underway, tell you it will be more expensive than anticipated—or he may suddenly discover problems that don’t exist.
- A contractor may perform work without getting legally required permits. If the contractor skips the necessary permitting required by local ordinance, it can cause problems if the authorities ever discover it or if an inspector finds out when the home is later sold.
- The contractor may provide you with false information about the materials, labor, or terms, which is considered fraudulent.
When personal property is stolen from your home
If you discover that personal property is missing after the contractor or his team has been in your home, you may suspect that one of the crew members has taken it.
What to do in case of contractor theft
In each of these cases, contact the contractor. First, make sure there has been no simple misunderstanding. After discussing the matter, contact an attorney who practices contract law to take action if you still believe there is some fraud at work, or if the contractor won’t talk to you or take steps to remedy the issue.
Present the facts of the project, the contract, and other paperwork—including check images, diagrams, and any other documentation—to the attorney so he can guide your actions. If you suspect criminal activity, the attorney can help you report it. If the amount is within the limits of small claims court in your state, you may pursue that route.
Prevention through due diligence
You can significantly minimize the risk of contractor theft by taking these due diligence steps before hiring.
- Ask friends and family for referrals for the type of work you need to have done.
- Read online reviews of contractors that look promising. Check them out on the Better Business Bureau and other review sites.
- Choose three, then get competing bids and written estimates.
- Both you and the contractor should sign the contract; at the end, you should sign a statement of completed work only if you are satisfied.
- Do not pay more than 25% down.
- Check that the contractor is bonded and insured. Bonding protects you if the contractor fails to live up to his work, and insurance protects you if he or a crew member gets hurt on the job at your property.
Related – How to Hire and Work with a Contractor
