Did you know, there is laws that help to protect you from bad contractors. The HICPA or Home Improvement Consumer Protection Act was created to help protect you from bad contractors. A to Z Family Business is committed to ensuring you’re in the know and not in the dark. The things we see most often from contractors is the below but there are many more,
- no contract or estimate with details to protect you for the work being performed
“Home improvement contract.” An agreement between a contractor, subcontractor or salesperson and an owner for the performance of a home improvement which includes all agreements for labor, services and materials to be furnished and performed under the contract.
Did you know that when you receive an estimate it should be very inclusive of exactly what’s included in the work you’re getting done including materials and what materials are included. Labor and materials should be broken down and the “scope of work” should be outlined in detail to ensure what you talk about with a contractor and what’s on your “contract” line up with each other. We hear very often that people will get a email or text with just a total cost and no breakdown of labor and materials and no breakdown of what work is being performed. The verbal contract that people think is going to happen will not help you if things go wrong.
- Insurance Coverage – Liability Insurance is the only insurance required by the state to become a licensed contractor and they only require $50,000 in insurance. If the worst happened and serious damage happened to your home such as a fire or serious water damage, $50,000 is not enough to cover your loss. You would be responsible for making up the difference to get things fixed.
(ix) Proof of liability insurance covering personal injury in an amount not less than $50,000 and insurance covering property damage caused by the work of a home improvement contractor in an amount not less than $50,000. For the purpose of this subparagraph, proof of insurance may include information attested to by an applicant that the applicant is self-insured and the bureau shall develop forms for this purpose and make them available to applicants. The bureau may determine the sufficiency of the self insurance and the manner in which it is maintained in compliance with this act.
Did you know that workers compensation insurance is not a requirement for contractors, many contractors use Sub Contractors so they’re able to get away with not having workers comp insurance which covers the employees but also covers you the homeowner. If a contractor is on a ladder at your home, falls of the ladder and gets injured and they do not have workers compensation insurance you’re responsible to pay for damages both medical and living depending on how bad the injury is. This is something most contractors hide behind and just say, “I am licensed and insured” but that’s not typically true for all coverage.
- Deposits or payments should never exceed 33% of the total scope of work or job cost unless non returnable custom materials need to be ordered to start the project.
Did you know many contractors ask for more of a deposit like 50% or more as they’re behind financially and not able to pay their bills so they use these deposits to pay for current bills… many contractors do not know how to properly estimate a project and if a customer is not willing to pay them more money at the end of the project they take a loss overall on the project but still must pay their monthly bills so they’re using your deposit to pay those bills…. this continues to happen over and over again until the contractor is so behind and has so many jobs lined up that they cannot continue and they go out of business and you most likely will not be able to get your money back.
This is just a few of the many examples we see with home improvement and contractors, the full list can be found online with the links below to the Attorney General.