Consumers, Beware When You Contract For Disaster Repairs
Release Date: February 10, 2004
Release Number: 1505-021
» More Information on California Earthquake
SAN LUIS OBISPO, Calif. -- State and federal disaster recovery officials advise individuals who had property destroyed or damaged by the San Simeon earthquake to be careful when they hire contractors to clean up or rebuild their homes and businesses.
"Contractors will play a major role in helping residents and business owners recover from the December 22, 2003, earthquake, said Federal Coordinating Officer Peter Martinasco of the Federal Emergency Management Agency (FEMA). "However, scam artists occasionally masquerade as legitimate contractors in the wake of a disaster."
Scam artists rely on a variety of schemes. For instance, some offer to clear debris and then dump it nearby once they are paid, leaving the homeowner liable for the cleanup. Others may demand a big deposit up front to rebuild a home and later vanish with the money.
"Take the time to check out the people you hire," said Dallas Jones, director of the California Governor's Office of Emergency Services (OES) and state coordinating officer. "Don't let yourself be victimized twice. Finding a reputable contractor is an important element in recovering from the earthquake." The following suggestions are offered:
- Use reliable licensed contractors. Contractors working on a job totaling $500 or more for labor and materials must be licensed. The Contractors State License Board (CSLB) operates a disaster hotline at 1-800-962-1125 to answer contractor-related questions from those affected by the earthquake. Consumers also can verify a contractor's license status or order publications on the CSLB Website at www.cslb.ca.gov.
- Check the contractor's track record. Contact your Better Business Bureau or local business trades council to make sure the contractor's company has no outstanding consumer complaints against it.
- Get a written estimate. Compare the services and prices of several reputable contractors before making a final decision. Hire local contractors if possible.
- Check references. Call former customers who had similar work done to make sure they were satisfied with the job.
- Check to see whether the contractor carries general liability insurance and make sure the contractor carries workers' compensation. If the contractor is not insured, the homeowner may be liable for accidents that occur on the property or to the house/building.
- Ask for a written contract. Never sign a blank contract or one with blank spaces. Have a lawyer review the contract if substantial costs are involved.
- Pay by check. Avoid on-the-spot cash payments. The safest route is to write a check to the contracting company. A reasonable down payment is 10 percent or $1,000, whichever is less.
- Canceling a contract should be done within three business days of signing. Be sure to follow the agreements stated in the cancellation clauses. Send the notification by registered mail.
- Have work inspected. If excavation work is being performed (e.g., sewers or basement walls), make sure a building inspector or other qualified inspector signs off on the work before it is hidden from view to avoid problems in the future.
The California Governor's Office of Emergency Services coordinates overall state agency response to major disasters in support of local government. The office is responsible for ensuring California's readiness to respond to and recover from natural, manmade and war-caused emergencies and for assisting local governments in their emergency preparedness, response, mitigation and recovery efforts.
The U.S. Small Business Administration is the federal government's primary source of money for the long-term rebuilding of disaster-damaged private property. SBA helps homeowners, renters, businesses of all sizes, and private non-profit organizations fund repairs or rebuilding efforts, and cover the cost of replacing lost or disaster-damaged personal property. These disaster loans cover uninsured and uncompensated losses and do not duplicate benefits of other agencies or organizations.
On March 1, 2003, FEMA became part of the U.S. Department of Homeland Security. FEMA's continuing mission within the new department is to lead the effort to prepare the nation for all hazards and effectively manage federal response and recovery efforts following any national incident. FEMA also initiates proactive mitigation activities, trains first responders, and manages the National Flood Insurance Program and the U.S. Fire Administration.
Disaster recovery assistance is available to any individual without regard to race, color, sex, religion, national origin, economic status, or disability. If you or someone you know has been discriminated against in receiving disaster assistance, you may contact one of FEMA's Equal Rights Officers (EROs) at 1-800-525-0321, or contact your State Office of Equal Rights.
Last Modified: Wednesday, 11-Feb-2004 09:15:07