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Home Projects & Contractors
While you can’t anticipate all the issues involved with home repairs and contractors, there are steps you can take to avoid financial losses, project delays, and a contractor disappearing in the middle of a job. These steps include doing your research, getting multiple bids, and verifying the contractor’s license and references.
Complaints to law enforcement regarding door-to-door contractors escalate right after severe weather, or significant fire incidents. The most common complaints surround work not being completed, poor craftsmanship, excessive delays, and budgets that were exceeded without prior approval.
Picking the right contractor Is up to you – do your research.
Whether you are dealing with hail damage to your vehicle, your roof, or a home renovation project the same advice holds true when looking for a contractor:
Do your research before hiring a contractor. Take your time to hire. Read reviews, check references, use the Better Business Bureau website for reviews, and most importantly, ask questions.
First, get bids from at least three different contractors.
Door-to-door contractors are not necessarily scam artists, but doing business with a contractor out of sheer convenience is risky. Don’t fall into the trap of getting a great deal or relying solely on a friend’s recommendation. Getting three bids on the front end is far less time-consuming and costly than trying to remedy poor workmanship on the back end.
Second, verify the contractor’s license to make sure the company is fully licensed and insured.
Third, check references. Don’t rely on the contractor’s great personality and confidence. Companies and individual contractors should be able to provide contact information for at least three previous clients. Take the time to call each of them and ask specific questions regarding the services and professionalism of the contractor. Know your rights under The Consumer Protection/Roofing Bill from the Colorado Roofing Association.
Protect yourself from unscrupulous contractors:
- Employ only licensed contractors.
- Insist on a written and detailed contract that documents what will be done, by whom, and by when before work begins.
- Pay by credit card, not cash and keep all receipts so you can dispute charges later.
- Pay no more than 10% of the job’s total cost until the work is complete.
- Get documentation of the completed work, a warranty of the product and if appropriate, get a copy of the payment to be filed with your insurance company.
- Require the contractor to pull a permit for each project. It’s a red flag if the contractor wants you to pull the permit. A permit protects the resale value of your home and is required by lending institutions.
- If you don’t get a permit, your insurance coverage may be cancelled. The contractor is responsible for compliance with the building code.
- Don’t provide more money beyond a deposit to your contractor unless you get something in return, such as materials delivered to your address.
- Never pay in full until the job is complete and inspected and the building permit is closed.
Warning signs
- Workers and contractors are often willing to do a free inspection of the issue prior to their being hired. Watch the person as they perform the inspection as some scammers report more damage than there really is. At times, scammers create more damage to up the cost of the repair.
- Be wary of door-to-door sales contractors, especially after a major storm event. They could be professional storm-chasers who take the money and run.
- Schedule the work for the time that you will be at the site alongside the contractor.
Contractors may be committing insurance fraud if they:
- Offer to pay the insurance deductible.
- Suggest overbilling your insurance company to reimburse you for your deductible.
- Offer a no-cost incentive.
- Under the Colorado Mechanics Lien Law, subcontractors and suppliers have the right to place a lien on an owner’s property if they are not paid by the hiring contractor. The law ensures that subcontractors and suppliers are fairly paid for the value they provide to a home because of their work.
Due diligence:
- Ask your insurance company for a contractor recommendation.
- A roofing contractor is prohibited by law from waiving your obligation to pay your insurance deductible.
- Use the Better Business Bureau website to research the company. Look at the length of time the company has been in business, the number of complaints the business has received, and how the business has responded and/or rectified those complaints.
- Verify the contractor’s license.
- Understand the contract before signing. The contract should have a start and end date for the project, and a clause that indicates how disputes will be handled. Understand your obligation if the insurance company does not pay for something. Once the work commences, get all change orders in writing.
- To avoid a lien against your home, get a signed lien waiver from the contractor when you make your payment. This will ensure that all subcontractors and suppliers will be paid and your home will be protected. Review the Colorado Mechanics Lien Law.
- Understand your rights under the Residential Roofing Services statute. A roofing contractor must disclose their surety and liability coverage and provide the homeowner with written notification that the roofing contractor shall hold any payment from the residential property owner in trust until the roofing contractor has delivered roofing materials or has performed the majority of the work.
The National Insurance Crime Bureau (NICB) is a great resource for more information about contractor fraud.
Do you suspect you’ve been scammed or exploited?
Report it to us by calling our Fraud Hotline.
Contact – The Denver DA’s FRAUD HOTLINE
720.913.9179
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