With the stabilizing of the real estate market, more homeowners are spending money on remodeling projects. If they are not careful, homeowners can end up paying more than they ever expected. Duane Wilson, owner of Cornerstone Design & Remodel–a San Diego-based Kitchen & Bath Contractor–provides valuable tips on how to avoid 3 of the most common pitfalls.
A homeowner makes a large deposit, then gets no work done
This is one of the most common scams among unscrupulous contractors. They ask for a big deposit or to pay for all of the materials upfront, then the homeowner never hears from them again. To avoid this pitfall, homeowners should not pay for work or materials upfront and should avoid any large deposits.
In California, it is against the law for contractors to ask for more than 10 percent or $1000 (whichever is less) for a down payment. They cannot legally ask for upfront payment for materials or work. The one exception is if the contractor is ordering customer-requested custom materials. In that case, they can ask for payment upfront.
Suppliers or subcontractors come after the homeowner for payment
Homeowners are responsible for suppliers and subcontractors who do not get paid on their job. They can even put a lien against the home where they did the work. To avoid this pitfall, there are several strategies a homeowner can use:
Pay the supplier or subcontractor directly
Issue joint checks to the contractor and supplier/subcontractor
Get an unconditional lien release from suppliers/subcontractors
Homeowner is liable for an injury on the job, including lost wages
If the general contractor does not have valid insurance, the homeowner is liable for any injuries on the job. This includes paying lost wages, if someone gets hurt and cannot work for a period of time. To avoid this pitfall, check that the general contractor has valid liability and workman’s comp insurance.
Of course, the easiest way to avoid these and other potential pitfalls is to work with a reputable contractor who has a history of paying suppliers and subcontractors on time. Happy remodeling!
Source: Cornerstone Design & Remodel