5 Contractor Scams and How to Avoid Them
In our work at Headwaters Construction Inc. as commercial construction contractors, we have been able to learn how to avoid contractor scams. We have spoken with tons of property owners who were taken for a ride by scammy contractors. While most commercial builders are standup honest people, some have soiled the reputation of committed and hardworking professionals. In this blog post, we share a compilation of the most common contractor scams we’ve heard at Headwaters Construction Inc. Use this information to be a smart commercial property owner who can immediately detect a contractor scam from miles away!
The Upfront Payment Scam
This one is very common because it is premised on a reason that seems logical. For example, the contractor may explain to the building owner that they need, say 30% payment upfront, in order to buy needed materials and rent equipment.
Sacramento construction general contractors explain that once you pay that money, the contractor may stop talking to you entirely. In other cases, they will do some work or even fail to work in accordance with the timelines agreed upon. They know you will find it hard to fire them since you will forfeit what you’ve already paid.
To protect yourself from this scam, only pay the minimum mandated by law. For example, some states stipulate that a client is only obliged to pay 10% upfront as a sign of seriousness.
But what about materials and equipment? Serious commercial builders have networks of suppliers. It shouldn’t be hard to get materials and equipment on credit first. You can then pay for these using the agreed milestone payments as work progresses.
The Verbal Agreement Scam
Some contractors promise to include so many extras in the work they are going to do. This can happen during a retail renovation or any other kind of commercial construction project. They will assure you that you should take their word on this, but once the contract is signed and work begins, it may be a different story. You may be shocked to find that the items agreed upon verbally aren’t addressed.
If you insist that the contractor does what he or she promised verbally, they will ask you for money to cover those costs! Understanding this upfront will help you learn how to avoid contractor scams.
Avoid this scam by putting everything in writing. At Headwaters Construction Inc., we take this so seriously that we tell clients that if something isn’t in writing, then it doesn’t exist. Write everything down, including change orders. Both parties should sign before the work begins or payments are made.
The “A Permit Isn’t Necessary” Scam
Nearly all commercial construction projects require a building permit from the local authorities. However, some unscrupulous contractors may tell you that they don’t need one for the work specified.
Other contractors may even tell you to get one intended for DIY projects, but don’t fall for this trap. If the contractor doesn’t get a permit, he or she will not be answerable to the local building authorities. Yet, building inspectors need to sign off on the work to confirm that it was done in accordance with the applicable code.
If anything goes wrong and the work was done without a permit, you, and not the contractor, will be answerable!
Avoid this scam by insisting that the contractor obtains a permit from the relevant authorities so that there will be supervision from the municipal building department. Appleton, WI bathroom remodel company, Tureks Plumbing, explains that you are assured that the work done meets all regulations.
The “Unforeseen Problems” Scam
Some contractors can lure you in with a low quote and then after the work has commenced they say they run into unforeseen problems for which more money is needed to fix or accommodate.
While commercial construction companies will tell you that it is possible for unforeseen problems to arise, some contractors use this window to rip off building owners.
Two options are open to you to avoid this scam. First, the written contract you sign should have provisions on how change orders can be agreed upon. Secondly, you can get an independent commercial builder to ascertain the authenticity of the problem stated by the contractor, as well as give you advice on what it would cost to address that issue.
The Low-Priced Extra Materials Scam
We have come to learn that the people who deploy this scam usually come unannounced with some extra paving materials or other such materials that they are willing to sell to you at a discount if you can give them a contract to pave your yard or fix your driveway.
The scam in this case is that they could ask for a lot of money to fix underlying issues they “hadn’t been aware of,” or they could do shoddy work and vanish in thin air leaving you to foot the bill of having the work redone.
Avoid this scam by checking such a contractor’s references. That way, you can make sure that they are licensed and bonded in the jurisdiction. If you don’t get what you expected, then you can trace for them if they were a legit company.
At Headwaters Construction Inc., the best commercial renovation contractors in Sacramento, we have a rich history of topnotch commercial construction work. We work in several states including California, Washington State, and Oregon. Contact us and discover what it means to work with reputable professionals.