How To Avoid Being Ripped-Off By Unscrupulous Repairmen And Contractors

Here are three ways that you can avoid being ripped of by the many unscrupulous repairmen, tradesmen and contractors who make a living taking real estate investors to-the-cleaners on a regular basis:

  1. Hire only properly licensed and insured repairmen, tradesmen and contractors.
  2. Require written estimates for all jobs.
  3. Require that everyone who provides labor and materials on your job sign your state’s version of a waiver and release of lien upon final payment form.

How To Hire Only Properly Licensed And Insured Repairmen And Contractors

In order to avoid being duped into hiring one of the numerous unlicensed and uninsured crooks masquerading as legitimate repairmen and contractors, you must follow these eight steps to weed out the phonies, fakes and frauds:

  1. Require that all repairmen and contractors provide copies of their license or of competency, occupational license, workers” compensation insurance certificate, workers” compensation exemption certificate for sole employees, general liability insurance certificate and automobile liability insurance certificate.
  2. Require that all repairmen and contractors provide four verifiable customer references.
  3. Contact each customer reference provided and ask them if they would hire the repairman or contractor again.
  4. Conduct an online search of your state’s contractor license database to verify that the contractor has a valid license.
  5. Contact all of the insurers listed on the insurance certificates to verify that the policies are valid and in effect.
  6. Contact your local city and county building departments to check if there’s a history of complaints against the repairman or contractor.
  7. Contact your local Better Business Bureau to check if there’s a history of complaints against the repairman or contractor.
  8. Log onto your state attorney general’s consumer investigations Web page to check if the repairman or contractor is under investigation.

How To Find Competent Professional Tradesmen And Contractors

How do you find competent professional tradesmen and contractors? Start by looking on the Internet and in your local newspaper under the professional services section.  Or, better yet, visit construction job sites and ask tradesmen if they’re interested in side-work.  In most cases, they will be.  Ask them for references from people they have done work for.  Also, try to see previous examples of their work. A little investigative work on your part could pay handsome dividends, especially if it helps you to avoid being stuck with a less than professional looking job.  I’ve had good luck hiring retired tradesmen who are looking for part-time employment.

Require Written Estimates For All Jobs

In order to avoid being ripped off by unscrupulous repairmen and contractors, require written estimates that include the following information:

  1. Detailed description of the scope of all work to be performed on the job to include  cleanup.
  2. Detailed work schedule with commencement and completion dates.
  3. Specifications for all building materials to be used on the job.
  4. Listing of all building permits required to perform the job.
  5. Detailed payment schedule outlining the amount and time when payments are to be made.
  6. Warranties covering workmanship and building materials used on the job.

What You Need to Know About Your State’s Construction Lien Law

You need to know that under most state construction lien laws, anyone who provides a service, labor or materials for the improvement of real property has a right to file a lien against the property for nonpayment.  Furthermore, if you do pay a contractor for a job, and the contractor fails to pay the subcontractors who supplied the labor and the materialmen who supplied the materials, you’re still financially responsible for paying them even though you’ve paid the contractor in full.  In other words, you could end up paying for a job twice if you don’t have legal proof that everyone was paid in full.

Require Everyone To Sign A Release Of Lien

In order to avoid paying for a job twice, require that everyone who works or supplies materials on your job sign a Waiver and Release Of Lien Upon Final Payment when they’re paid.  This way, you’ll have legal proof that everyone connected to your property fix-up was paid in full.

I’m not done yet! Part 1 and Part 2 of “How To Fix Up Properties For Maximum Curb Appeal And Resale Value” covered your fix-up plan and working with contractors. Did you know that there are at least 8 other key elements that I spell out in the Part 3 conclusion of “How To Fix Up Properties For Maximum Curb Appeal And Resale Value“.

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