Uncovering Unethical Contractors
(guest post courtesy of Thomas Mustac)
If you ask around for stories about home remodeling projects, you are bound to hear a tale about an unethical contractor or two. Matt DiBara of DiBara Masonry, a leading masonry and concrete company headquartered in Los Angeles, California, did not need to ask around. The stories found him.
“In the last few years, it’s unbelievable the amount of calls that we have gotten in my office for projects that have already been completed that were part of a scam, that weren’t done properly, that didn’t have permits pulled, or that are in litigation,” Matt says.
Matt did what he could to fix the work, but he knew there had to be a way to stop the scams before they happened. So he launched The Undercover Contractor to give homeowners the information that they need to be able to spot and avoid construction scams.
A long history of helping homeowners
Matt’s family has been involved in construction work for more than a century. Matt first saw the fallout from unethical contractors as he watched his father respond again and again to pleas for help from homeowners who had been scammed. Moved with compassion, Matt’s dad did what he could to fix problems and guide people through legal battles brought against scammers.
As Matt followed in his father’s footsteps and started DiBara Masonry, he discovered that nothing had changed. Unscrupulous contractors continued to scam people, now using websites with stock photos and fake reviews to fool people into believing that their businesses were legitimate and their services were sound.
“I launched the Undercover Contractor to give homeowners the information that they need to have a clear understanding of how to find, vet, hire, and manage contractors,” Matt says. “My passion is empowering homeowners with the in-depth industry insight that my family has learned from more than a decade of doing construction work well.”
Tell-tale signs that you are about to be scammed
Through his Undercover Contractor Podcast as well as his upcoming book The Confident Homeowner, Matt provides tips designed to help homeowners navigate all phases of construction projects. One of Matt’s most popular podcast episodes addresses how not to get scammed by contractors.
Avoid big upfront deposits
The first tell-tale sign Matt says to look for when trying to avoid unethical contractors is big upfront deposits.
“For me, trust is key. I want my clients to feel comfortable,” says Matt. “At my company, we take a zero dollar deposit. I never take deposits. I don’t take any money until my crew shows up and we start work.”
Matt points out that companies that need a big upfront deposit may have cash flow problems, which is not a sign of a healthy, successful business. Another possibility is that the company intends to scam you by taking your deposit and never showing up to do the work.
“For you as the homeowner, big deposits are a no-no,” Matt says.
Avoid an unclear contract
The purpose of a construction contract is to lay out on the front end what both the contractor and the homeowner are committed to do.
“I urge my clients to clearly understand their contract,” says Matt. “Never sign an agreement without knowing exactly what you are getting. If you don’t know, you’re in trouble.”
Matt defines unclear contracts as those that are short and abbreviated or that use a lot of jargon that is only understood by contractors. If the contract refers to supplies like “Number 4 Rebar” or “Cooling Condensers” that you can’t decipher, as a homeowner you have every right to ask questions and get clarification. If the contractor is not willing to sit down and discuss the contracts, explaining each point to your satisfaction, that should be a red flag.
Avoid unfavorable terms of payment
An unethical contractor will often dictate terms of payment that are stacked in his favor. This is why it is important to have a clear contract that the homeowner can understand. Once the work is described in detail and a schedule is laid out, payments should be released when it is appropriate to cover the cost of the construction.
“If a contractor shows up with a little bit of material and he or she is taking 70 percent of the contract value, that probably doesn’t make sense,” says Matt. “The best rule of thumb is to stack more of the payments toward the end of the scope of work.”
In the case of work that requires inspections, the best practice is to release payment only after inspections have been passed.
Require a clear schedule
An ethical contractor should walk you through each phase of your project and explain how long each phase will take to complete. When a bathroom is being remodeled, you should know when demolition will begin, how long before demolition is complete, when plumbers will begin work, when plumbing inspections will happen, and reasonable expectations on all other phases of work until the project is complete and you are enjoying your new bathroom.
“This is one place where contractors absolutely take advantage of homeowners,” Matt says. “When they are not committed by a contract to a clear schedule, they can start your job and work just enough to get a good payment, then move on to another job and do the same thing there.”
This practice, which Matt says is very common in the industry, is what causes jobs that should only take two weeks to be stretched out over four months. In cases like this, a clear schedule will give a homeowner a tool for holding a contractor accountable. It’s not unusual for an unethical contractor to refuse to provide a clear schedule.
Require a final project walk-through
No construction project is done until the homeowner and the contractor have conducted a walk-through, which is an inspection of the project done together to ensure that the work has been completed according to the contract. Matt recommends the final walk-through accomplish two primary goals.
First, the homeowner should understand if there is anything they need to know about the work moving forward. For example, if concrete work has been done, the contractor should explain if the work needs to be sealed or cleaned, how often, and what products are recommended.
The second objective is making sure that all the work has been completed with no problems. If problems are discovered, such as leaky faucets or sloppy paint jobs, they should be addressed.
“You want to discuss where you are at present in the process and what you need to do in the future to get the most of the work that you are paying for,” says Matt.
Contractors that avoid walk-throughs may have something to hide. Make sure that it is part of the contract and it happens before final payment is made.
Your home is a huge investment. Don’t trust it to an unethical contractor. Honest contractors are out there. These tips will help you to find them.