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    Tips to Consider BEFORE You Sign a Home Repair Contract


    (Golden, CO – May 22, 2014) First Judicial District Attorney Pete Weir is advising homeowners to use caution as they begin making decisions about home repair projects following spring storms. Weir recommends that consumers collect the information they need to help make decisions before entering into a home repair contract.

    “Taking the time you need to do your homework so that you can make an informed decision, before you sign a repair contract, is the best way to protect yourself from becoming the victim of fraud,” said Weir, “Keep in mind that if the offer looks too good to be true, it probably is.”

    In the wake of weather disasters unsuspecting consumers are easy targets for less-than reputable contractors or professional scammers. “Storm Chasers” or “Travelers” go door-to-door offering home improvement services. After paying for their services, consumers may be stuck with subpar work, partial performance or waiting for repairs that may never occur because the contractor skipped town. These groups often offer lower prices that may be hard to resist.

    The District Attorney’s Office offers the following tips for anyone considering a home repair: 

    • Be wary of any contractors selling repairs door-to-door. 

    • Learn as much as you can about the contractor, before you agree to do business with them.

    Obtain the company name, physical address, land and cell phone numbers, and company contacts.

    Ask about the contractor’s experience in performing jobs of a similar scope. Determine how many similar jobs the contractor has recently performed.

    Find out whether the contractor will perform the work or will subcontract the job. Obtain information for all subcontractors. 

    • Obtain several WRITTEN estimates. Insist on comprehensive estimates that include the exact work to be performed, the materials to be provided, the approximate start and completion dates, permit details (such as what permits are required and who will obtain the permits), warranty details, payment details, and cancellation/rescission and refund policies.

    Compare the estimates to determine if specified work is consistent with other contracts and to determine if the quality of materials is the same. Compare written warranties and guarantees.

    Include provisions for change orders.

    Obtain any insurance and bonding information on the contractor. 

    Contact the contractor’s insurance agent to determine if their policies are current and what protection the policies will provide you.

    • Request references. Obtain the names, addresses and telephone numbers of the references.

    Contact the references to determine if they were satisfied with the work, and if they believed the price was fair.

    Ask if the general contractor or a subcontractor performed the work. Were the subcontractors paid? Determine if start and completion dates were met.

    Ask if any problems occurred along the way.

    Ask if any unexpected costs were presented (determine the amount and/or percentage of unexpected costs to the total percentage of the job)

    Ask if all appropriate permits and inspections were obtained.

    Ask if the home owner was satisfied with the employees or subcontractors. Did they clean-up during the job and when the job was complete. Ask if they would use the contractor again and if they would feel comfortable providing a reference for the contractor.

    • Contact your local building department to determine what permits are required. Ask the building department if they have dealt with the contractor in the past and if they are aware of any problems.

    • Check out the company with the Better Business Bureau. The BBB can be reached at http://denver.bbb.org/ or 303.758.2100 (Boulder - 303.327.4500).

    • Contact the Colorado Secretary of State to obtain corporate information for the contractor. Determine how long the company has been in business and determine if the company is registered with the Secretary of State. business@sos.state.co.us or 303-894-2200, press 2.

    • Require all representations to be in writing and have both parties acknowledge the specifics. This information should include any add-ons or change orders, cancellation rights if the contract is based upon an insurance claim or financing, or statements that will document the scope or quality of work.

    • Insist on a written contract. The contract should be accepted by both the contractor and the homeowner. Rescission periods are typically 3 days but do not pertain to emergency repairs.

    • Read all contracts thoroughly, including the fine print and the back of the contracts. Know what you are signing. When in doubt, obtain legal advice.

    • Don’t pay in cash or prepay for services. Pay as you go and provide a small deposit only. Make certain the contract spells out the payment terms. Withhold the final payment until the work is completed and all inspections have passed.

    • Beware of offers that look “too good to be true” when a contractor tells you that they have materials left over from another job or they had a job cancel, and they will pass the savings on to you. Or, that payments will be made to you for every referral or all insurance deductibles will be waived.

    Don’t be rushed into a contract. Be cautious of contractors that warn you that time is of the essence or that this is a “limited time” only discount.

    For additional information contact the First Judicial District Attorney’s Consumer Fraud Unit, 303-271-6931, dohno@jeffco.us.
    OTHER RESOURCES:

    Federal Trade Commission:
    http://www.consumer.ftc.gov/articles/0242-hiring-contractor

    Better Business Bureau
    1020 Cherokee St Denver, CO 80204
    (303) 758-2100
    http://denver.bbb.org/article/property-flooded-bbb-advises-on-restoration-contractors-43705

    Colorado Attorney General
    Ralph L. Carr Colorado Judicial Center
    1300 Broadway, 10th Floor
    Denver, Colorado 80203
    P: 720-508-6000 or 800-222-4444
    Attorney.General@state.co.us
    http://www.coloradoattorneygeneral.gov/node/1501
    http://www.coloradoattorneygeneral.gov/initiatives/consumer_resource_guide/common_scams#home_fraud



    Pam Russell
    DA Public Information
    3032716905
    prussel@jeffco.us

    May 22, 2014


    Last Updated: 5-22-2014
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