Be Careful When Hiring Contractors for Disaster Repairs
Release Date: August 10, 1999
Release Number: 1279-23
BISMARCK, N.D. -- State and federal disaster recovery officials advise North Dakota residents who have disaster-related damage to be careful when hiring unknown contractors to clean up and repair their homes and businesses.
"Normally residents are familiar with who the local contractors are," said Adjutant General Keith D. Bjerke, state coordinating officer. "In those cases where an unfamiliar firm or face appears, it's best to be cautious, ask questions and get references."
Disaster recovery officials advise residents to be especially alert for door-to-door solicitors who hand out make-shift flyers and ask for large cash deposits or advance payments in full.
"Some scam artists claim to be "FEMA certified"," notes Federal Coordinating Officer Lesli A. Rucker. "The Federal Emergency Management Agency (FEMA) neither certifies nor endorses any private-sector contractor."
The North Dakota Secretary of State's Licensing Division and emergency management officials offer the following suggestions on how to be a wise consumer:
- Use reliable, licensed contractors. Check with the North Dakota Secretary of State's Licensing Division at 1-800-352-0867, extension 83665 or (701) 328-3665.
- Get a written estimate. Be sure to obtain a written estimate for the job and read the fine print. Compare the services and prices of several reputable contractors before making a final decision. Hire local contractors, if possible. Some contractors charge a fee for an estimate, which is often applied to the price of subsequent repairs they make.
- Check references. Contractors should be willing to provide the names of previous customers. Call several former customers who had similar work done to make sure they were satisfied with the job.
- Ask for proof of insurance. Make sure the contractor carries general liability insurance and 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.
- Insist on a written contract. A complete contract should clearly state all the tasks to be performed, all associated costs and the payment schedule. Never sign a blank contract or one with blank spaces. Make sure the contract clearly states who will apply for the necessary permits or licenses. Have a lawyer review the contract, if substantial costs are involved. Keep a copy of the signed contract.
- Get any guarantees in writing. Any guarantees made by the contractor should be written into the contract. The guarantee should clearly state what is guaranteed, who is responsible for the guarantee and how long the guarantee is valid.
- Have work inspected. If excavation work is being performed (e.g., sewers or basement walls) make sure a qualified observer inspects the work before it is hidden from view to avoid similar problems in the future.
- Make final payments when the work is completed. Do not sign completion papers or make the final payment until the work is completed to your satisfaction. A reputable contractor will not threaten you or pressure you to sign if the job is not finished properly.
- 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 30 percent of the total cost of the project. Federal law gives consumers a three-day "cooling off" period for unsolicited door-to door sales of more than $25.
- Canceling a contract. Canceling a contract should be done within three business days of signing. Be sure to follow the procedures for cancellation that are set out in the contract. Send the notification by registered mail with a return receipt to be signed by the contractor.
Consumers who have problems with a contractor or have been victims of fraud are urged to contact the North Dakota Consumer Protection Division at 1-800-472-2600 (TTY 701-328-3409).
Last Modified: Tuesday, 16-Dec-2003 09:55:16