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4 Tips to Avoid Crooked Contractors

Never pay a contractor in full before the job is complete. (Photo by Katelin Kinney)

Shoddy work costs you thousands of dollars and causes undue stress. Follow these tips to avoid a rip-off.

Don't be ripped off by an unscrupulous contractor. Consider these tips to protect yourself:

1. Do your research. Check Angie's List, industry associations and ask for references before hiring, including contact information for any subcontractors. Find out whether the contractor's past work was up to par and completed on time.

2. Check their trade license. If a contractor is required to have a state or local license in order to do your job, verify his or her status with the appropriate licensing board. Don't just take their word that they're in compliance.

3. Don't assume something is included — whether it's a specific service you're expecting or a rain-delay plan. Make sure the contract includes a lien waiver that covers payments to all the subcontractors.

4. Never pay everything up front. Experts say the recommended prepayment is typically between 10 and 15 percent of the total value of the project, but it can vary.

Dec. 10, 2009

By Angie's List Staff

Comments

inquiring 8 years ago

Subject: Realistic?

Is it realistic that a contractor could put in an in ground pool for $21,000 in Bakersfield, CA? We have a contractor that is saying he can do just that and is asking for $10,000 up front for some materials, he does all the work himself (and his team) with the exception of a sub contractor for the excavating.

Katie Jacewicz 8 years ago

Senior Project Manager - Angie's List

Subject: Payments

Hi there,

We get a lot of questions about contractor payments. In California, the Contractors State License Board says it's illegal for a contractor to ask for more than 10% down or more than $1,000 - whichever is less. Here's a link to the press release which warns California homeowners of this practice. Hope this helps! http://www.cslb.ca.gov/GeneralInformation/Newsroom/PressReleases/PressRe...

Margaret 8 years ago

Subject: Customer Taken

I am a homeowner, hired a contractor 10K jobs for labor, I pay for all material. He wanted in the contract $4500. down. I gave him $4500 down within a few day my job required me to leave town for a month. I told contractor I would return in three to 4 weeks and to start on my return. On my return I phone immediately that I was back, it took over a week for them to answer the phone me calling a leaving messages. I was told it would be two week before they could start. The same story every week for a month. At the end of the 5th weeks I called and of course stating another two weeks. I cancelled the job and now they say they will not return all my money because I cancelled and because I left town.

Bruce 9 years ago

Subject:

Get a CERTIFICATE OF INSURANCE with an endorsement that NAMES THE PROPERTY OWNER as the NAMED INSURED on the CONTRACTOR'S INSURANCE LIABILITY POLICY. If the contractor uses sub-contractors, make certain you get a certificate of insurance from EACH SUBCONTRACTOR as well.

Do not accept photo copies. Do not accept PDF files. Do not accept e-mail or faxed copies. As for an ORIGINAL CERTIFICATE OF INSURANCE to be sent to you by the contractor's insurance company.

This does not cost the contractor anything as it is a service provided to commercial insurance policy holders.

Kevin Morris 9 years ago

Subject:

As a General Contractor I spend a lot of time "outliving" these GC stories. I really don't mind because I see it too much around me. You'll hear the same info again and again. Check out their license at the Map To CSLB Contractors State License Board
9821 Business Park Drive
Sacramento, CA 95827
Their web link is www.cslb.ca.gov
Ask for references, check out the website, look at photos. We ARE OUT HERE. Contractors like me have grown up here and work here. I invite you to check them out; check me out. But whatever you do, hire the one you can trust and only pay up to 10% deposit on the job. We do have to buy materials to get started, after all. Best,
Kevin
Licensed, Bonded, Insured
KM Construction

David Simon 9 years ago

Subject:

This message is for Dave D There is no way in hell that a contractor has to foot the bill for any job he does.It's absurd for you to even put that in print. Most contractors take 1/3 to 1/2 down and work out payments for the rest.I should start a 20,000 job with my own money.I would put a mechanics lean on a person like you so fast it would make your head spin!~!

Nancy 9 years ago

Subject:

When we had our first big (to us) remodeling job, I checked the D&B report for all three of the contractors that I seriously considered. Worth the money. One contractor was asking for too much money up front. 50% at contract signing, 40% at start of job, telling me that was industry standard. Sorry, it's not my standard. I told here that was way too much exposure for me. Contractors that have been in business decades are closing their doors all over. I checked D&B, they have almost no credit history. Sure, they do everything cash on the customer's dime. NEXT!

Carol Aman 9 years ago

Subject:

I'm not sure of where to go to verify license info.

Ben 9 years ago

Subject:

I am a contractor in Ohio. My advice is only rarely make a downpayment if you do no more than 10%. We do order our materials and etc. but we typically have a 30 day period to pay. That is if your contractor is able to establish credit which most quality established companies can. There are some items that are completely special order and the companies need a 50% down payment. If that is the case the contractor should come to you the homeowner and work outpayment, whether the contractor give you a sales reciept with the word paid or you pay the company direct. If the job is a smaller job $10,000 - $30,000. I typically don't ask for money up front I tell the customer I would like the 10% payment the first week we are present (working) on the job. We then take draws as the work progresses (typically monthly) and all this is spelled out in a CONTRACT.

craigtmccoy 9 years ago

Subject:

Price things out for your self that you see need to be done ,if you go to lowes an tell them what is going on they will assist you in doing it your self if you feel you can acheive the task.

Glenn 9 years ago

Subject:

I once had a close friend who was in the home remodel business. He was all upset one day because a potential customer wanted him to break out the cost of material with the cost of labor. He flatly refused and was ranting and raving about it. My thought to myself was "well, you'll never do anything for me!!". If I were going to use a guy like that then he gets 10% to 15% up front and no more. He wants to hide the cost of material then he gets to eat the cost during construction.

IMHO when you get your proposal you should have discussed the quality of all materials, where those materials would be obtained and an agreed procedure for you to inspect that material before it is used. Put that in the contract. Also put it in the contract that if any materials are used without prior inspection they are removed or uncovered so that an inspection can happen and replaced if necessary, ALL AT THE CONTRACTOR'S EXPENSE. The contractors I have worked with actually set up accounts at Lowes or Home Depot where I went in and paid the balance of each order. This way I know the contractor isn't trying to make his money from labor PLUS soaking me for profits from his own markup for the materials.

If a contractor doesn't want to work this way that's OK. I don't have a bit of a problem. There's the door, don't let it hit you on the way out. NEXT!!!!

Sharon 9 years ago

Subject:

We were taken in by two criminal Contractors: consistent and significant defective work; required too much up front; intimidated spouse to pay for defective work; do not show up for a long time; unlicensed unskilled labor; threatened us if did not do what they said; lawyers no help - in fact they favor the Contractors. Whole Scene in Seattle is CRIMINAL. Will never hire another Contractor.

Sharon 9 years ago

Subject:

Is there any place you can contact before you hire a contractor? I see this on the news all the time.

Selestine 9 years ago

Subject:

roofing contractor. company has been doing jobs in my neighborhood due to weather damage. so of course he knows the roofing dimensions of the house. he asked for my claims # (which i didn't give)& never gave me a price & he advised he would take care of everything..Red flag or is this standard?

tricia 9 years ago

Subject:

I paid upfront thinking I was dealing with someone honest, simply because I knew his family. But Mr Massad said he gambled my $8000 and was amazed when I sued him. he refuses to pay what the judge ordered now calls and harrasses me. He is a violent man with a long history of arrests. I let a psycopath into my life by not checking into his past first. I'll always check histories now, regardless of how well I know the family!

phyllis 9 years ago

Subject:

In Ca, the law states that they can only get 10% upfront. If a contractor says he needs more to buy materials-RUN.. If he does not have a home depot account, he is a loser.

Dave D 9 years ago

Subject:

Sorry folks, if the contractor is not established enough to start the job on his own credit.......then I don't use them! To me it is a red flag when they need money up front!

Judy Magnuson 9 years ago

Subject:

I had an inspector and contractor from hell...

Marce 9 years ago

Subject:

I would like to find a contractor who charges a fixed hourly rate and I buy the materials. It doesn't get more fair and honest than that.

Jim 9 years ago

Subject:

I guess it depends on what you are contracting for. As a painting contractor we are not usually on the job more than a week or two at the most, so getting one third downpayment is reasonable. Some jobs, like painting the intire interior of a new home takes more time, but I still try to work with the 1/3 down and the remainder when the job is finished. This does leave me open to problems if the owner is slow to make final payment, but I almost never run into problems. I have to buy my paints up front as you have to be careful not to buy paints from different lot numbers--this could mean a slight difference in color, hence, making touchup nearly imposible.

Paul 9 years ago

Subject:

Paul here with some follow up info on my previous post. What I talk about here is based on the many California laws to protect both consumer and Contractor. It's been said " if you can pass the California state test, you can Easily pass the contractor state exam in any state.

Years ago you needed to be sponsored through the apprenticeship program by an employer who gave you job training that allowed you to practice what you were being taught in the apprenticeship school. Then you needed to successfully complete the journeyman requirements, and
then a licensed contractor had to refer you, and sign your application swearing that he knows you have been working at journeyman level for the last four years, before even being considered for the state exam.

Now you pay $350.00, go to class for one weekend at the Hilton and have the answers for all five possible tests... Drilled into your Head, and your girlfriend, mother, or anyone can sign saying you have journeyman level experience, then not have to produce school records, or anything to verify what you're telling them. So you can literally be the tire scrubber at the local car wash for the last 10 years, quit that job, and be a contractor in whatever trade you want.... 30-45 days later.
It's really sad what has been allowed to happen by the state.

This is the direct result of the state lowering the bar to attract people back to the trades after the high tech bubble had many tradesman trading in their hand tools for a computer and a crack at the big bucks.

Now there are tons of Contractors running around that haven't got a clue how to write a contract.
Bottom line is...take the time to Detail as much as you can in your contracts, or loose out on change orders, which is nothing compared
If you can't specify whats to go into the contract... how can you convince a customer you can finish the project let alone, do it right?

One requirement now is you need to have $2,500 cash in the bank for operating the business. I guess what's being taught is once you get the license, take the $2,500 and celebrate your graduation, then you can get your customer to pay for all your mistakes, and lack of education and proper training.

Its really Sad

Paul 9 years ago

Subject:

As a California contractor we can only take 10% or $1,000 whichever is less. Then I collect money due as follows;
I lay the entire project out in the contract, labeling each step or phase by letter or number, then I detail all materials that will be used in each phase, how long it will take, and what it will cost the customer. It's just good fair business to sign off each phase "paid in full"....releasing their liability to pay twice for the material used in a completed phase, by a vendor for the unpaid account balance for materials now on your home.
. I usually try to list phases in the exact order they are to be installed. It's easier for the customer to follow along, and saves them the time it takes to figure out the missing contract details then the uncomfortable process of expressing concerns, fears, etc.., possibly at a time when I'm focused on the job and now have to try and recall and explain, material details, and procedures that should be in the contract.
Now what is fair? Collecting the value of the properly completed phase is the standard when contracting with the state of California to do anything for them, public works, schools, ect..
Speaking for myself, as a c-27 holder (Landscape) i never buy all the materials at once, nor do I get everything from a single vendor that insists i place the whole order at one time then require payment for everything up front.
If the contractor & the vendor(s) have a history of doing business together, and the contractors credit is good, then many smaller vendors will usually say "Interest free if paid in full within 30 days". They do understand business.
We, as contractors must have a $12,500.00 performance
bond in place for the customer in case we don't perform or finish the contract agreement.
We must also include start and finish dates on the contract.
Supply a printed copy of the "mechanics lien Laws" to the customer with the proposal... To protect themselves from possibly being forced to sell off the home to satisfy unpaid bills, left by a contractor.
Also a copy of the "72 hour right to cancellation law" there to protect them from really high pressure salesmen, or after sleeping on it decide to hold off on the work Any and all money taken by the contractor, even if the money was spent ordering materials, or paid wages, or any work done in the 72 hours after signing the contract.
The customer "MUST" cancel in writing within 72 hours
(3 business days), and you don't need to give reason nor explain anything, unless you feel compelled to do so.
You also get a 4 year workmanship warranty anytime you hire a California contractor in good standing. This is another state requirement to protect the consumer.

I hope that helps someone out.

Cindy 9 years ago

Subject:

My sister & her husband paid a contractor $45,000 for a remodeling job: plumbing, electric, windows, and some interior work. Paid it upfront. He was supposedly buying the materials & paying his workers. They got started off alright, then slacked off. He had bought materials, but never brought most of them, he ran out of money and the job was only started. He left them snookered and they couldn't do anything about it. Later they found out they were just one of many he had done the same thing to. Where's the justice in that? They sought legal council. Didn't do them any good.

sharon 9 years ago

Subject:

after reading most of these statements i can relate, we were taken for 12,500 by a contractor that did exactly what is descrbed here, not showing up day after day, bringing materials we didn't order, excuse after excuse ,talking in circles, extremely nice but a con artist. did so much damage to our home by removing materials and not replacing, and i find the law protects them as the legal process is very expensive and lengthy. where do we go when this happens. i talk to so many that have gone through this and only lose in the end. help.

Jim 9 years ago

Subject:

As a painting contractor I get 1/3 down with the balance due at completion of the job--that means when the job is done right. Also a great way to check out contractors is to ask your local lumber center, paint store, carpet store for people they would recommend. One other point, here in Pennsylvania the new law states that any contractor can only get up to 1/3 downpayment on a job.

Dotti 9 years ago

Subject:

Hey, I agree with you. Contractors can get hurt too. But how about when a contractor gets the money up front and then tries to push something on you that you don't want because he already has it in his warehouse from another order, or he says you'll get mid-line cabinets like KraftMaid and then tries to put in Chinese junk using your upfront payment for materials. Low-balling the initial estimate and then adding on 40% in add-ons for better quality is a little like bait and switch.

David Simon 9 years ago

Subject:

I couldn't do a job to start with 10 to 15% Down thats absurd. Your deposit she have the material money in it. You use the customers money not your own. I get 1/3 down or i get half down, or i don't do the work !!

William 9 years ago

Subject:

Follow the above tips. Don't pay off the bill until you are pleased with the work and check for a professional license. I didn't do this and got bum results on a vinyl job. I was in a hurry to get it done - met him at a home repair center. I didn't check the status of his license, 2 yrs out of date. I paid him off and he would not answer calls to fix some small details. Don't go for the FAST-CHEAP unless you know the product.

Eric 9 years ago

Subject:

Every job is different some have more up front costs than others. Customers and contractors should be on the same team and treat each other with respect after all if your good people you want the same outcome a job well done with as few problems as possible. As for the money up front don't ever pay 100% 1/3 is reasonable remember the contract will have expenses such as your materials, gas, payroll, etc...

Lou 9 years ago

Subject:

Contractors are being taken as many times as home owners, a contractor must get money up front to pay for materials, many times contractors get to the 50% mark, ask for money and the home owner will say, gee, don't have it this week, but I'll have it next week, but next week never comes.

Trish 9 years ago

Subject:

Our contractor ran off with 1/3 of the money to repair our home after the plumber set the house on fire. I thought I asked all the right questions but apparently I didn't. I don't know what the answer is to not getting screwed.

Dotti McKee 9 years ago

Subject:

From what I have learned from General Contractors, I refuse to and I will not hire one. This one lowballed the entire project then went for about 40% in add-ons. I paid him a huge amount for "supplies" up front so he could purchase them. Then I learned that his cabinets were cheap and if I want good ones it would be another $4,000 add on. He pushed a floor that he already had in the warehouse from another job, while knowing I didn't want that color. He tried to demo my kitchen before I had picked out the cabinets. I felt like he was a carpet guy, going into general contracting. I am now my own contractor and will hired good guys for each job I need done. I think I'll be way ahead of the game money-wise and quality-wise.

Janie 9 years ago

Subject:

Most states have a consumer protection agency such as a Contractors Board. Laws vary greatly from State to State- from how much a contractor can collect up front to what the qualifications are to BE a contractor in that State. You should consult with your State Agency that regulates contractors- and often they have websites. Be informed and ask a lot of questions! Oregon has a great resource for consumers if you good Oregon Construction Contracotrs Board.

Babs 9 years ago

Subject:

A contractor who was wonderful to my neighbors, decided I was an easy mark. They way he wrote his contract, I was supposed to pay 2/3 up front - BEFORE the work started - and final 1/3 at the 75% completion point. Who is he kidding? I called him on it right away. He apologized but never did take the job.

Amy 9 years ago

Subject:

I am not a contractor but I have been in business for myself at times. First do your homework and research a business/get referrals. Then how much you put down, really depends upon what materials or products are going into the job. You can't really expect a business to be a no interest bank for you - if they need to pay for something, it shouldn't be out of their pocket, or it is the same as them loaning you money. Materials and products needed to do the job or start the job (especially custom) require financial commitments. Yet, I would definitely say, be careful about paying 100%, without a thorough walk through, as it can be difficult to negotiate expectations of finished work after payment is complete. If we are talking about the price of labor only, then I would expect much less would be put down and payment would be made over the course of the project as satisfactory progress is made.

John 9 years ago

Subject:

When dealing with "Big Ticket" items for your remodeling project expect to either pay the supplier in full to order or contradctor may ask for 50% or more to covere those costs

Matt Denise 9 years ago

Subject:

If you hire a contractor and he does not show up or he shows up sometimes, does he call you to tell you what the delay or problem is? If he doesn't call when he is not coming out, 9 times out of 10 he is a bad contractor!!!

Jane 9 years ago

Subject:

I don't think contractors are allowed to take more than 10% or $1000 of a job (whichever is less) in advance but maybe I don't understand the question?

connye holliday 9 years ago

Subject:

The best policy is to pay a contractor 25% when they are at 30% of completion, 50% when he is at 60%, 90% when he is at 100%, with all retained money to be paid when final walk through is complete and all issues resolved to your satisfaction. He should also show proof that any outstanding materials accounts used on your project has been paid in full before releasing final pymt.

connye holliday 9 years ago

Subject:

I do not feel that you should ever pay any money up front to a contractor.!5% of a $3000.00 dollar job is alot of beer money to an unscrupulous contractor.

Chris 9 years ago

Subject:

If you distrust a person and act suspicious as a customer, your contractor will treat you with derision. Don't believe everything you hear from others, rather look at the work the contractor has done and your judgment of the contractor's character. You can't become an expert on hiring contractors by using 2-5 of them over the course of your life.

Jim H 7 years ago

Subject: "If you distrust a person and

"If you distrust a person and act suspicious as a customer, your contractor will treat you with derision."

Only an insecure jerk or a 12 year old would treat a customer with derision in the presence of a bit of healthy skepticism. Especially in regards to the welfare of their own money/property.

Stu 9 years ago

Subject:

If your contractor has many different excuses for not showing up on time, including "you haven't made a decision on this or that", when there are twenty different other things that he can do that are unrelated to that decision, you definitely have a bad contractor, who isn't being honest with you. You can be sure that he or she has another job elsewhere that is interfering with your work.

Lea 9 years ago

Subject:

We hired a mason about a month ago and gave him $860 for material. He was recommended by someone else who had done some work for us and we were satisfied with his work so had no worries this person would turn out to be a nightmare. Eventually he dropped off some materials but did not come back. Talked circles around us and had excuses. Tried to bring another person into the job which we did not approve. We are stuck with about $300 worth of materials and out $560. I realize we are lucky it is not more. This is a small village, everyone knows everyone and my husband and I are business owners. I find it hard to understand why a local person would burn us with our opportunity to spread the truth about this guy. His name is Christopher Jennings by the way....of Chatham NY, don't use him!

Amiee 9 years ago

Subject:

We just had a 67,000 remodeling job done with statwide and we didnt give them any money upfront- they helped us obtain finacing and we didnt sign off on the loan until the job was completed to our satisfaction- after all these horror stories I wouldnt do it any other way.

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