These stressful economic times have forced many people to tighten their budgets, cut down expenses, and find cheaper alternatives to goods and services. While there is nothing wrong with any of these practices, going about it the wrong way can ultimately cost you more than it should have to begin with. Predators are always on the lookout for unsuspecting homeowners that are unaware of the current laws and regulations that are there to protect them from deceptive practices. If you’ll like to see for yourself what I am talking about check MSNBC’s video expose “Home Wrecker” at http://video.msn.com/video.aspx?mkt=en-US&brand=msnbc&vid=c435f953-78e0-4716-a6d8-1a57f23b05ae you will be shocked to see just who you could be allowing to work on your property.
Every year, The New Jersey Division of Consumer Affairs receives thousands of complaints from consumers that have been taken advantage by unscrupulous contractors. Complaints range from failure to start or finish a project after taking a deposit, to missed deadlines and shoddy workmanship amongst many others. There is a way to minimize your exposure, protect yourself and weed out these so called “contractors”, and its called “The New Jersey Consumer Fraud Act”. This measure is designed to protect you, the consumer, from fraud, deception and misrepresentation. In addition to this, the “Contractor’s Registration Act” requires home improvement contractors to register with the state or they will not be issued municipal construction permits or be allowed to perform home improvement work in New Jersey.The contractor is required to file a disclosure statement with the Consumer Affairs director, stating whether he/she has been convicted of any crime.Any crime relating adversely to activities regulated by the Consumer Fraud Act will be grounds for denial of a Home Improvement Contractor license. A Home Improvement Contractor is an individual or company involved in many tasks which include but are not limited to renovating, installing, replacing, installing, constructing and demolishing residential or noncommercial properties. They include those who work on swimming pools, roofing, additions, patios, landscaping, painting and much more.
How can you protect yourself you ask? For starters be proactive, educate yourself on the task at hand and take the following steps to minimize your exposure:
Contact Consumer Affairs at 1-888-656-6225 to check that the contractor is registered and to see if there are any complaints filed against them.
Get written estimates from a few sources. This is where it gets tricky and you can become the victim of a deceptive “Low Baller”…. When comparing prices make sure the services and materials are comparable… if one of the bids is too low compared to the others, there must be a reason! Nobody works for nothing…therefore investigate before assuming you are getting a great deal.
Ask the contractor if they have Liability Insurance (as required by law), Worker’s Comp insurance and inquire if there will be subcontractors involved in the project. You as the homeowner is at the highest risk of losing the most if an accident happens and the contractor is not fully covered. Do not cut corners; protect your home and investment!
Ask for references. Speak to past clients; ask key questions such as job completion, unexpected costs, neatness and whether they would use the contractor again.
Ask about professional affiliations and confirm their status.
And most importantly…Do not pay for the entire project upfront. Typical payment arrangements are 1/3 deposit, 1/3 halfway through the job and the remaining third upon completion. While it’s NOT advised to pay in cash, if you do, make sure to obtain a detailed receipt with the date, all the company information, printed name and signature of the contractor.
Once you have secured the right contractor know the law and follow these steps:
Any projects over $500.00 require by law a written contract. The contract must include the business name, registration number, address, start date and completion date. In addition, the contractor must also provide you with a copy of his Certificate of Insurance, which should include all of the insurance company’s information for your review.
Request a detailed description of the project, name brands or quality of materials to be used. Also make sure all guarantees and/or warranties are included.
Ask for a lien waiver, which is a receipt stating that the workers or material suppliers will not ask you for money once you have paid the contractor.
If for any reason you wish to cancel the signed contract, you have up to midnight of the third business day after you receive the contract to do so. This must be done in writing, either personally delivered to the contractor or sent via registered or certified mail with a return receipt requested.
And lastly, make sure all applicable permits have been filed. Especially nowadays with the real estate and loan changes in place, a simple thing like this could obstruct the sale of your property in the future.
If you come across a problem with your project, always try to give the contractor a chance to resolve it. It could be a harmless oversight or a miscommunication issue. If you find the problem is not being resolved contact Consumer Affairs at 1-800-242-5846 and request a complaint form or file online at http://www.nj.gov/oag/ca/ocp/ocpform.htm
The following links will aid you in researching contractors:
Moral of the story…due your due diligence and shop the right way…do not assume the cheaper way is the best way to go. While there are many reputable companies out there that can offer better pricing than others, this is accomplished by their capacity at achieving efficiency, and leanness in their business structure and not because they are cutting costs and sacrificing the integrity of the project. An uninsured, unregistered contractor is not looking out for your best interests and could end up costing you much more money and heartache if the project goes awry. Times like this make people do desperate things, do not become the victim of a shady contractor.
