A recent news story about a fraudulent contractor operating in Northern Virginia prompted discussions about how we can help property owners spot and avoid scammers. Hiring a contractor to work on your home is probably not something you do every day, so how do you protect your property, your family, and your money from shady operators? Read on for some best practices…
First, it is always wise to ask friends, family, and neighbors for recommendations of contractors that they have worked with. Rarely will someone you know and trust steer you towards a shady character – if they refer you to a contractor that they have worked with, they are more than likely happy with their completed job, so you can worry less about being scammed or left with a half-finished project. If you are new to the area or if you don’t get a recommendation for someone who can perform the work you need – you don’t want to hire a landscaper to do your bathroom remodel, for example - take to the internet.
Perform a Google search for the type of work you need to have done and you’ll get tons of results but look carefully at the quality of those results. In this day and age, anyone can create a simple website for just a few dollars a month. Does the website have up to date information? Is there more on the page than just contact information? Once you’ve narrowed down the search results, check online review sites, check their social media profiles – when was the page created, when was the last time they posted, etc. Use all the information you find to continue to narrow down your list, but, keep in mind that it’s best to choose at least three contractors to get estimates from.
As you speak to potential contractors and schedule estimates, they should be comfortable giving you their license and insurance information, if they refuse, consider that a red flag. Also, initial estimates should ALWAYS be free. Ask for references from clients they’ve done the same type of work for, ask for a few older ones and some newer ones. Call the references! Ask their previous clients if problems occurred and how they were addressed by the contractor. If they state that they are an established company, but they don’t have older references, that is another red flag.
The next step will be to verify the contractor’s license. It is the homeowner’s responsibility to do so. Virginia, Maryland, and DC all require contractors to be licensed for just about any home improvement project, and Virginia contractors are required to have industry-specific licenses. Licenses can be checked by visiting:
Washington DC: http://dcra.dc.gov/service/verify-business-license
You can also check for complaints and disciplinary actions at the links above and you can check with local consumer protection agencies and the Better Business Bureau for complaints as well.
Also, ask to see a copy of their certificate of insurance. Contractors should carry at least $2 million in liability insurance and $500,000 in worker’s compensation. Verify that the name on the policy matches the company name and call the insurance company listed on the form to make sure the policy is active and valid.
Lastly, once you’ve chosen a contractor, never pay more than 30% down when executing the contract (30% is the maximum deposit allowed in Maryland and some other areas). There should be a firm start date and finish date written into the contract, as well as payment terms. Never, ever pay in full until the job is 100% completed.We hope you consider working with us on your next home remodeling project, but, even if you don’t, we want you to be able to protect yourself from scammers. Hopefully, following the steps above will help you spot these tricksters and stay far away from them.