Contractor fraud has become a major challenge to our community's recovery from disaster.
LouisianaRebuilds.Info and the LSU Sociology Department in Baton Rouge have created a survey that will help us understand how widespread contractor fraud is and more importantly, what we can do to stop it.
Whether or not you've been a victim of contractor fraud, please take this important survey. Getting information from all residents will give us better insight on how to fight this issue.
The survey takes an average of 5 minutes to complete and is fully confidential.
With your help, we can work together to help fix this devastating problem.
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Help our community rebuild by getting the word out about good and bad contractors. Use our Contractor Rating System to rate a contractor you've used or search for contractor reviews before you hire.
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Make sure they are licensed in the State of Louisiana:
Commercial Projects over $50,000 require state license
Residential New Construction of Single Family Homes require
state license
Home Improvement/Remodeling over $7,500 requires a state
license
Hazardous materials or mold remediation over $1.00 requires
state license
Verify a Contractor's License or Registration number at (225) 765-2301 or
on the Louisiana State Licensing Board website. Ask to see the
license and get a copy. Click here
for a sample State license. Be sure to check for the State watermark.
Anyone doing business in Orleans Parish is ALSO required to obtain an
Orleans parish business license - by no means should this be assumed to
be or to replace an official contractor's license. A business license
is not a contractor's license.
Ask for a copy of their business license. (Click here for a sample Orleans Parish business license) Then
check with the Bureau of Revenue/Department of Finance at 504-658-1600 to
confirm their business license is current.
Check if they have any history of violations, complaints, etc…
Ask for proof of insurance before a contract is signed. The contractor
should have General Liability and and Worker's Compensation Insurance. See a
sample certificate of insurance here.
Develop a Comprehensive Legal Agreement that Protects Your
Interests
Get a written contract and don't sign anything until you understand
the terms of your contract clearly. You can get free review of your contract by attorneys at the following locations:
Common Ground Collective's free legal clinic - Walk-ins are welcome on Saturdays from 12pm-3pm and Monday-Friday from 9am-7pm. The clinic is also open other times by appointment. The clinic is located at 1800 Deslonde Street in the Lower Ninth Ward (call 504-717-7324 for more
information).
New Orleans Legal Assistance (NOLAC) - Call
504-529-1000.
Include a written statement of your right to cancel the contract
within three business days if you signed the contract at your home or at a
location other than the contractor's place of business.
Give as many details as you can in the contract for the work that
you expect to be done.
Write out exactly what, item to item, the contractor will
and will not do. For example, is the site clean-up and trash hauling included in
the price?
It's recommended that you include in the contract about four
or more tasks that you pay for as they are completed.
Include a statement that all plumbing and electrical work
must be up to code. Contractors who are reputable will be willing to spell out
all the details in your contract.
Include in your contract a labor, materials, and mechanical
lien waiver which means that he will provide you with paperwork showing that he
has paid the subcontractors before you give him the next payment. Make sure the
contractor gives you the company name, name of the person in charge, and cell
phone number for all subcontractors before you sign the contract. Read more
about how to avoid/fight and unfair lien here.
Include a payment schedule for the contractor, subcontractors and suppliers
Write out how change orders will be handled.
Include a detailed list of all materials purchased for the job including
color, model, size, brand name and product. Keep all warranties covering
materials and workmanship.
Oral promises should always be added to the written contract.
The contract must include start date, finish date, and has to be signed by
you and the contractor.
Pay 10% down, or $1,000, whichever is less, depending on project size and
reasonable starting cost requirements. 10% of the contract is the maximum that a
legitimate professional contractor should ask at the signing of the contract.
Don't let payments get ahead of work completed. Never pay for anything with
cash. Keep records of all payments.
Keep a job file of all papers relating to your construction project. Take
periodic photos of the job's progress which will help should there ever be a
dispute.
Don't make the final payment until you are satisfied with the job.
A lien waiver certifies that a general contractor has paid all of his subcontractors so that no liens may be filed against your property. If you are using a general contractor, it is in your best interest to require a lien waiver upon completion of the job and prior to final payment. Click the link to download a sample lien waiver.
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FREE LEGAL ADVICE/CONTRACT REVIEW
These organizations will help review your contract before you sign:
Common Ground Collective offers free legal advice at 1800 Deslonde Street in the Lower 9th Ward. Bring your home repair contract to the clinic for a review. Assistance is available with an in-person visit only. Walk-ins are welcome on Saturdays from 12pm-3pm and Monday-Friday from 9am-7pm. The clinic is also open other times by appointment. Call 504-717-7324 for more information.moreless
New Orleans Legal Assistance (NOLAC) provides free legal aid to low-income people in the New Orleans region (including St. Tammany, St. Bernard, Jefferson, Plaquemines, and St. Charles Parishes). Areas of assistance include FEMA recoupment/repayment claims, successions (gaining clear title to Katrina-damaged homes), eviction Defense, Road Home issues, mortgage company disputes, contract reviews (for hiring contractors), food stamps, SSI, and other benefits problems, and more.
Contact the New Orleans office at 504-529-1000 or visit the website for information on other locations.
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Contractors MUST be licensed with the State if an entirely NEW residential home is being built, if the home improvement/remodeling job is over $7500, if the contractor is submitting bids for commercial work valued at more than $50,000, or if the job involves hazardous materials or mold remediation.
Anyone doing business in Orleans Parish is required to obtain a parish business license, but by no means should this be assumed to be an official contractor's license.
Unlicensed contractors should be reported to the Louisiana State Licensing Board at 800-256-1392 or
via email at complaints@lslbc.louisiana.gov
Visit the website to search for a contractor online or call (225) 765-2301.
(Click here for a sample State license. Be sure to check for the State watermark)
Check for an Orleans Parish Business License
Call the Bureau of Revenue/Department of Finance at 504-658-1600 to check for a business license. Note: a business license is not a contractors license. If a contractor is performing work over $7500 then he must have a State license. A business license is required for anyone doing business in Orleans Parish.
(Click here for a sample Orleans Parish business license)
Listed here are average prices for some of the most common construction items and projects locally.
Gutting
The going rate right now is about $1.50 per square foot. This will likely include standard demolition (sheetrock, most
flooring materials, fixtures, etc.) Some things that could increase this rate include removal of hardwood or
ceramic/stone tile, removal of mortar beds, and removal of lathe & plaster (as opposed to sheetrock).
Demolition
Demolition of an entire structure costs around $5.00 per square foot.
Raising
The cost of raising a house can be anywhere from $30-$120K. Raising a pier and beam structure runs about $30K for the basics while raising a slab house, which is substantially more complicated, can run anywhere from $80-120K depending on the specific situation.
Sheet-rocking
Sheetrock installation is priced per sheet, or board, and typically costs anywhere from $60-$90 per sheet depending on the
installer and the board size (4x8 or 4x12). It averages out to about $2.00-$2.50 per square foot of wall space. This will
include hanging the board, taping, floating and sanding. Texturing may or may not be an additional cost.
Flooring
Hardwood – anywhere from $8.00 - $25.00 per square foot depending on species, board size, etc. Refinishing existing flooring
should run between $2.25 - $3.25 per square foot.
Carpet - $30 per square yard is a good budget number, but again, there can be major variance.
Hard tile - $9.00 per square foot is a good budget number, but costs can vary depending on type of tile, size, layout,
etc.
Roofing
New asphalt shingles should run between $150 - $225 per square (or 100 square feet) or roof surface area. New plywood
decking adds another $120 - $150 per square. Note that if your roof has old slat-type decking (skip sheathing), it is
strongly recommended that you have plywood installed to ensure the integrity of the new shingles.
Prices for slate or other roof types depend heavily on the material used, but $1200 - $1500 per square is a good budget for
new slate or artificial slate (Lamarite, etc.)
Wiring
$6.00 - $8.00 per square foot is a good budget, depending on the amount of wiring needed (i.e. first floor only, walls only,
whole house, etc.)
Removing a fallen tree
This typically depends on the size of the tree and accessibility, could run between $500 - $1200.
Read this list of the most common contractor scams to protect yourself from contractor fraud.
Your contractor may be a scam artist if s/he...
Doesn't provide a local address or local telephone number- do not hire someone who only supplies a cell phone number.
Uses a P.O. Box for an address. And some fraudulent contractors give fake addresses of places that don't exist or are actually storm damaged properties. Confirm that the address they cite is legitimate by driving to their office.
Has a company with a name like "Jesus Saves Construction," "Marine Construction," or "Honest Joe's Landscapers". These names are often a cover-up. It doesn't necessarily mean they’re trustworthy - in fact, it usually means the opposite.
Has a ‘doctored’ license. In one case cited by a State Contractor Licensing Board investigator, a man took a real license and forged his name on it. Always look at the contractor’s license (its best to get a copy) and make note of the license number. Make sure that the contractor is the owner of that license and that he is registered in your parish by confirming with the State Contractor Licensing Board. See a sample license here.
Has only an occupational license. An occupational license is required for all business owners for the purpose of paying taxes. Make sure your contractor has a State Residential Building License if the job is more than $7500.
Solicits door-to-door. Legitimate (and busy) contractors do not have time to solicit door-to-door.
Just happens to have left-over materials from previous jobs.
Will give you a discount for recommending other customers.
Demands that you pay in cash or for the job upfront. Never pay in cash. Make sure you pay with a check or credit card which can serve as a record of payment.
Takes more for a down payment than is reasonable, claiming to need instant cash for supplies and to pay workers. A down payment shouldn’t exceed 10% or $1,000, whichever is less, or reasonable to the size of the project.
Tries to pressure you into signing a contract you haven’t read or that has blank spaces.
Asks you to get the construction permits. It’s the contractor’s responsibility to file for building permits.
Asks you to use your home as security for a home improvement loan or borrow money from a lender the contractor knows. If you do not pay the loan or miss a payment, the lender can take your home and sell it.
Uses high pressure sales tactics to scare and intimidate you into making an immediate decision about work. Get a competitive bid, check license and registration and get references from customers you can call to discuss their work with.
Claims that your job will be a “demonstration.”
Offers to perform a free inspection then claims that faulty wiring, bad plumbing, or a leaky roof is putting the homeowner in danger in an attempt to scare the homeowner into agreeing to unnecessary, over-priced work. Always get at least three bids/inspections.
States that a written contract is unnecessary, promising to deliver on the verbal agreement. The shady contractor then takes advantage of the situation to perform shoddy work or none at all.
Be sure to follow best hiring practices listed here. moreless
Every contractor has the right to place a lien on a home if the owner does not pay for work done to the house. However, unscrupulous contractors may put an illegitimate lien on a property with damaging consequences to the homeowner. Click here to find out about liens and how to fight a bad one.
The Louisiana State Licensing Board publishes a list of contractors who have practiced without a license or committed other violations. Download the .pdf from their website.
For a reliability report on a contractor, or to report a contractor, call the Better Business Bureau at 504-581-6222 or visit the Web site at www.neworleans.bbb.org. Click "Company Reports" to see if a contractor has been reported or "File a Complaint" to report a contractor.
For a reliability report on a contractor, or to report a contractor, call the Better Business Bureau at 504-581-6222 or visit the Web site at www.neworleans.bbb.org. Click "Company Reports" to see if a contractor has been reported or "File a Complaint" to report a contractor.
Have a question about contracting work that's not answered in our guide? Email us at questions@louisianarebuilds.info and our panel of experts will answer your questions. Please allow 3-5 business days for a response.
