How to Avoid Being Cheated by a Renovation Contractor

Taking on a home renovation is a big commitment that involves a large amount of time, stress and money. Hiring a renovation contractor means putting your trust in a stranger, and the trust is serious, as it involves your home. Unfortunately, contractors do not have the best reputation for upholding their end of the bargain.

Of course, don’t let one bad apple spoil the whole bunch! There are plenty of ways to avoid being cheated by a contractor and find a worthwhile one.

Since certain jobs in the renovation industry are unregulated, it is important for yourself, as a homeowner, to do the research to make sure that you know what you’re getting yourself into as well as ways to protect your assets from any sort of unsavoury behaviour.

6 advices to avoid being cheated by a renovation contractor

1) Always Be Cautious

source: Pixabay

If you’re looking for a renovation contractor to work on your home, it is best to consider friend and family recommendations. Avoid using unsolicited entrepreneurs or contractors that claim they are from out of town, as there is an excessive amount of risk involved. If someone comes knocking on your front door and offers to do a repair, this is probably not a good sign.  

For contractors who are reliable and skilled, they are generally busy and therefore, would not have the time or need to travel door to door, or further from city to city. Especially during high seasons such as summer and autumn months. Even if a contractor offers you a bargain price, this is more than likely a sign of sales gimmicks that could play out later. 

2) Contractor referrals: asking friends and close ones for advice

As we mentioned, it is best to rely on contractors who have been referred to you. Before you agree to let a contractor work on your home, it would be important to get at least one referral based on past work!

Experts would recommend that you get at least 3 referrals before letting someone work on your home. However, if you receive a personal recommendation from a friend or family member, and have seen the work of the contractor they recommend, then this should be enough to go ahead.

Further, if the contractor you are working with has not personally been recommended to you, then it would be important to check out their work on the Better Business Bureau to see if any complaints have been made against the contractors themselves or their work. Further, make sure to double-check licenses, bonds and insurance. Lastly, make sure to double-check this information with local building inspectors as well as insurance companies.

3) Using contractor referral services

You can also use contractor referral services such as RenoQuotes, which run a background check on their contractors before accepting them in their network. Customer satisfaction is also verified through surveys and other means. For more information about the way the system works, check out the F.A.Q. page. 

4) Renovation project: how much should you pay your contractor for a deposit

Experts may argue that you should never pay a deposit upfront for contract work. However, it may initially be required for you to secure the job. If this is the case, make sure that you don’t pay more than 1/5 of the overall cost. Paying a hefty sum upfront may leave you in a vulnerable position and that could leave you with a half-finished renovation project.

If the contractor has been recommended by friends and family, there is less risk of this. But ultimately it is important to go with your gut and take the initiative to try and negotiate the sum you feel is just.

5) Other payment methods

Another thing worth noting is that you should be aware of contractors that refuse to take checks or those who ask you to create personal checks rather than checks payable to a company. Unfortunately, this is a definite sign of a scam in the making. Lastly, avoid signing any insurance checks that you may receive from Federal Trade Commissions that cover the cost of your home repairs. Your bank should provide you with a certification of completion, and therefore, the bank should take care of the payments between yourself and the contractor.

6) Get it in writing: ask for a written quote

It may be less common to carry around a pen and pencil. However, if you’re doing business with a contractor, it is recommended that you don’t base transactions off a handshake or verbal contracts. Instead, write physical contracts and include as much detail as possible. Any oral agreements made may not hold up in the future. Further, verbal agreements can lead to misunderstandings later.

According to federal law, you have at least 3-days to think things over for any contract that has been signed in your home. Be certain that your contract includes a three-day cancellation notice, as this can protect you if you choose to change your mind about who you’re working with. Lastly, always fill in the contract yourself, and never allow the contractor to take your contract home and fill it in themselves. Even if there are spaces that don’t require filling, cross these out.

Remember, there are plenty of excellent and reliable contractors out there, it’s all about finding one who suits your needs and could be close to becoming part of the family!

For more information about finding good contractors, check out these other articles on our renovation blog:

• How to find a good renovation contractor

• How to find the right contractor for your renovation project