Perhaps nothing could be sadder than to lose your home to Hurricane Sandy and then get ripped off by the contractor you’ve hired to rebuild it. If history is any guide, all sorts of flimflam artists may be descending on New York and New Jersey looking to make a quick buck off of homeowners’ bad luck. Angie Hicks, founder of Angie’s List, a site that rates contractors and has 100,000 members in the New York metro area, says she’s heard about contractors engaging in the questionable practice of going door-to-door. “Consumers need to have their guard up.”
Known as “storm chasers,” such contractors are often unlicensed, uninsured and from out of state. So if you have any trouble, it won't be easy to track them down. Hurricane Katrina offers a painful caveat emptor. After the storm devastated New Orleans in 2005, the Louisiana attorney general’s office dealt with a 2,000 percent increase in repair-related complaints from homeowners. The office went from an average of 145 complaints a year to 6,000 during the next two years, which led to more than 700 criminal investigations, 145 arrests and the issuance of an additional 56 arrest warrants, according to the National Consumer Law Center.
“I couldn't cut my grass or do anything in front of my house after Katrina without having out-of-state contractors come up to me trying to get on my roof to do an inspection and offering me the greatest deals in the world to fix it,” says Marco Bodellini, a certified fraud examiner in New Orleans. “None of them had the ability to answer a single question about their business, such as: ‘Do you have insurance or a license?’” A common scam was to ask for a cash or check deposit up front to do the job, then abscond with the money, he says.
Bodellini has not only been an examiner of fraud, but also the victim of it. He travels a lot for his job and wasn’t home when his aged mother got enticed by a contractor who offered to fix their roof after Katrina. “My mother definitely felt pressure to get the work done,” he says. A contractor shortage didn't help. “We could’ve put blue FEMA tarp over the roof, and it wouldn’t have looked pretty but would’ve held up until we got a proper contractor.” Instead, the contractor his mother hired did a terrible job and tried to strong-arm money out of her until Bodellini threatened him with legal action.
Most homeowners know the basic first steps to take -- document all necessary repairs, take pictures of all damage, have a claims adjustor from your insurance company come to assess damage and tell you what should be repaired and how much coverage the insurer will provide. Your insurer should have a list of recommended contractors. Hiring one of those contractors puts you at an advantage because you know the insurer has vetted the contractor and will be willing to cover the repair costs of someone on its own approved list.
Local building codes must also be checked before hiring anyone. During Sandy, a tree fell on retired probation officer Stephen Defillipis’s house in White Plains, New York, damaging his roof, three rooms and the walls. “Westchester County is different from a lot of other places in that legally you have to have building permits and an architect come out and look at the house before making any structural changes, even if it’s just to make repairs,” he says. His insurer also insisted that he hire a properly licensed local contractor. Without licensed contractors or proper permits, Defillipis says, “my insurance won’t cover it.”
Checking a license is easily done by going to your state’s licensing board. Angie’s List offers a free License Page that connects consumers with the right state board for each specific type of contractor. The site gives paid subscribers reviews of contractors by homeowners in their area. Make sure a contractor has liability and workers’ compensation insurance. If an accident occurs on your property and the contractor’s employees are uninsured, you could be liable for the medical bills. Many contractors, even if they’re licensed and insured, will subcontract some work out to other contractors, who may be unlicensed and/or uninsured. Ask if any work is being subbed out and if those workers are insured.
Once you find a contractor you like, the written contract should spell out precisely what they will do, what materials they will use and how much if any of a down payment will be needed. It should usually be no more than 20 percent of the total cost. The contract should also have a termination clause in it for you to back out of the deal if you’re dissatisfied with the work and, depending on the type of project, a multiyear guarantee of the workmanship.
Ideally, pay any down payment with a credit card. That not only enables you to dispute the charges with your credit-card company if you feel the contractor is fraudulent, but it serves as proof that the contractor has a legitimate business. “The only businesses usually that cannot accept credit cards are the ones that have had legal or credit trouble in the past,” says Bodellini.
No matter how bad things look, Steven O’Donovan of O’Donovan Construction in Monmouth, New Jersey, recommends people wait until they can hire a reputable contractor. O'Donovan has been in business for five years and has a good rating on Angie’s List. “Just keep calling till somebody comes out,” he says. “In the worst-case scenario, if you can get Joe Schmo to put tarp on your roof without killing himself, sure. But when dealing with a large amount of money and a lot of work, you really have to be careful.”
(Lewis Braham is a freelance writer based in Pittsburgh.)
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