Home Improvement Contractors (HIC) and Home Improvement Salesman (HIS) are required by law in almost every jurisdiction in the United States to be registered and licensed. Licensing procedures are generally done by Municipal or local agencies of the respective State. For example, HIC and HIS are licensed by the Department of Consumer Affairs in New York City.
As you might be aware, many of these Home Improvements Contractors and Salesmen are “fly by night” operators who misrepresent and fraudulently swindle millions of dollars from innocent home owners every year. Many of whom run and operate their scams out of their Vans, Trucks and SUV instead of a physical business address. Many years ago, the home improvement trade was referred to as the “Tin Men” industry where high powered salesmen sold aluminum sidings to homeowners with over 500-1000 per cent mark ups in many cases. Many of those same homeowners ended up with huge second mortgages, mechanic liens and foreclosures in many cases against their properties.
If you are a homeowner making plans to renovate or improve your properties, these are some tips on how to select or chose the right Home Improvement Contractor for your next project. First and foremost, ask HIC and HIS for proof of license, business card showing address, phone number, website, email addresses, etc. Their licenses should be imprinted on business cards. Next, ask for references or testimonials. Try to get at least 3-5 references and make sure not only to call them, but go over and look at the work that was done first hand. Visual inspection is always crucial in deciding on a project. Most importantly, get at least 3-5 written estimates from other HIC/HIS and compare prices. It is never recommended to sign a contract on the spot with any of these high powered salesmen. Take time out to think about the quote or estimate, compare prices and most importantly, call your local municipal or agency to verify that the HIC and HIS are legitimate. It is also a good idea to find out if the HIC you are contemplating to do business with carry what is called a Home Improvement Trust Fund. This is a fund that each HIC is required to pay into so if a homeowner gets scammed, he or she can seek restitution directly from the Agency that licensed the HIC or HIS. Last but not least, try not to give a deposit during the execution of contract. Give yourself that 3 days cancellation right that you are entitled to, so you can think about the transaction or offer. If in any case you are required to give a down payment or deposit, give a very small deposit (less than 10 per cent) if possible. Always keep in mind, never give more than you can afford to lose. If the HIC or HIS is legitimate, they will not ask or insist on getting a deposit up front. They should be credible enough to have accounts/credit with Suppliers such as Home Depot, Lowes, etc., to get materials delivered to your property. Beware of HIC or HIS who desperately seek huge deposits up front. Some of them will demand that you write the check in their names or give them cash. Do NOT do it. That is the first sign to detect an illegal operator. You should write the check to the Company or use a credit card. If they refuse, you should show them the door or call the Police.
In conclusion, let me recommend that you seek a progress payment plan with your Contractor. In other words, you pay them as they go along based on your approval, and most importantly, the Municipal Building Inspector’s approval. You do NOT want to pay a Contractor until or unless the Inspectors give a green light certifying that the work is done professionally and in accordance with local building codes. Ask your Contractor to allow you to hold back at least 10 per cent of the final payment, or better yet, the total contract price for at least 60-90 days after completion, so as to make sure that the work was done correctly. Just imagine getting a roof done for example, and only to find out after a heavy downpour that your roof leaks. Many Contractors do not come back to repair their shoddy workmanship when they get paid. Hold back some money! If you financed your project through a bank or third party lender, get that finance company involved. Make sure that they do a visual inspection of the job that was done and also sign off with the job before they release final payments to the Contractor.