BAD CONTRACTORS – 5 WAYS THEY CHEAT YOU!

I KNOW THAT THERE ARE GOOD CONTRACTORS OUT THERE

I want to start this article by saying that there are a lot of very good, honest contractors at work out there. I’m lucky enough to know a dozen or more in my hometown of Raleigh, North Carolina. And I’m sure I could find thousands more like them if I worked in other cities throughout the country.

As I spend more years in the carpentry trade, I’m constantly alarmed by the deplorable condition of the industry.

I’ve heard countless stories about clients being cheated, scammed or underserved by dishonest contractors. I have witnessed first-hand the various tactics that bad tradesmen use to part clients with their money.

This article explains five of the most common ways that contractors cheat their clients. I write them here in hopes that they will help you identify possible situations of construction fraud. And perhaps avoid them altogether.

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1. CONTRACTORS DRAW AND DASH

My first example is quite possibly the worst–what I call the “draw and dash.”

On jobs, material costs run into the hundreds or thousands of dollars. Therefore, it’s often necessary for contractors to ask for material payments in advance. The client may back out of the agreement, or somehow lose their funding.  With a draw, he contractor is not left on the hook for materials already purchased.

These “material draws” are a common, valid part construction, and I would never argue against their usage.

BAD CONTRACTORS TARGET HOMEOWNERS

However, things can go very awry when an extremely dishonest contractor secures advanced payment for materials, but has no intention of actually doing the work.

These contractors will often string their clients along, claiming that certain materials are on back order. Or that personal issues are preventing them from getting to the job. In some cases they simply stop responding to calls altogether. They count on clients’ timidity to simply cut losses and walk away.

This is outright robbery.

SO PICK YOUR CONTRACTOR CAREFULLY

Unfortunately, handing over a material draw is always a matter of trust. Therefore, you need to be certain that the person you’re hiring is on the level.

Avoid contractors who have no internet presence, no identifiable business front, and no traceable work history in your area. A business’s reputation is its collateral. If a contractor is advertising heavily in an area, and they rob you of your advance pay, you will have numerous avenues for reprisal.

On the other hand, if a contractor has nothing but a first name and an out-of-state address, your odds of squeezing them for remuneration are slim to none.

2. MATERIAL SWAPPING

A more difficult example for many clients to identify is the “material swap.”

Here, contractors draw up an agreement to use a certain quality or type of material for a construction project, but then surreptitiously use a cheaper, inferior product instead.

These contractors are relying on the notion that their clients simply can’t spot the difference between the two. Or, they’re hoping that an area will be painted over or covered up before a wiser client has an opportunity to inspect it.

Insist on looking at your contractor’s materials before the construction process begins. You don’t have to be overt or rude about it. Just ask: “Is this the hardie plank siding?” or, “Is that the PVC trim you were talking about?”

HAVE A GOOD CONTRACT AND CAREFULLY WATCH WHAT’S USED ON YOUR JOB

Good contractors will always be happy to show off a quality product, as well as explain what makes it superior. And good contractors will probably insist on using these products anyways, since they will ensure a longer-lasting quality.

If you don’t feel confident in your ability to identify materials, have a neighbor or friend with some construction experience glance at them. Construction materials are very easy to distinguish from one another for anyone who has worked with them before.

3. BAD CONTRACTORS CHANGE ESTIMATES

This is probably the most overused trick in the construction industry–or any other trade industry, for that matter. And it happens far more often with repair work than with new construction.

In this example, a contractor looks at a possible repair project and blithely quotes a decent job price. They then carry out the demolition phase of their work, only to discover (go figure!) that the problem is far more extensive than they thought. A full repair is going to be much pricier than expected.

This puts the client in a real bind. Some major portion of their house is probably demolished, their former contract is moot, and their lives will be disrupted until everything is put back to normal.

HERE’S WHAT A BAD CONTRACTOR DOES

The contractor begins leaning on them to shell out for the additional work.

They use scare tactics, telling the client that their house is at risk, that no one else will do the work for any less. And if the client dares to balk at the estimate change, the contractor uses a fail-safe argument: There was no way to tell how bad it would be until we opened everything up.

BUT…

The problem is, they’re technically telling the truth!

Tradesmen don’t have x-ray vision. Houses often hide their damage, and pieces need to be pried back, torn up, or fully removed to reveal the real source of a problem.

What makes situations like this so dishonest, though, is that the contractor did not adequately warn the client about the potential for additional work.

They threw out a low number that they were sure the client would say yes to, then went into the project fully anticipating that they would demand additional work once their client was on the hook.

SO WHAT TO DO?

To avoid this scenario in my own work, I ALWAYS give my client’s fair warning that the full extent of the job cannot be known until the demolition phase has been carried out. In many cases, I will actually give an “exploration bid”–an estimate for a small, controlled demolition to simply determine the extent of possible future work. Once I have a better grasp on all the variables, I will then bid the job like a typical repair.

Be sure to ask your contractor up front if he or she thinks the job has the potential to become drastically more involved than originally anticipated. Also consider asking them break a repair job into two bids: 1) demolition and assessment; 2) repair.

If a contractor is evasive, or unwilling to work with you, it might be best to find someone with a more reasonable approach in mind.

4. THE NEVER-ENDING JOB

Bad contractors don’t only cheat their clients out of money. They also cheat them out of time.

Part of a contractor’s bid or estimate should always stipulate the intended time frame for a project. This doesn’t have to be a dead accurate number, and it can contain far more leeway with bigger projects. But, contractors should reasonably be able to tell you, to within a few days for a small remodel, how long a job is going to take.

YOUR CONTRACTOR HAS OTHER JOBS, TOO

The problem is, most contractor’s are often juggling numerous projects at once. And whether they admit it or not, some of these projects are far more important to them than others.

If a contractor gets involved in your project, but then has a new project come up offering them higher profit, or even just better visibility in a desired market, they may pull all resources off your job to hunt that better paycheck quickly.

Just like the draw and dash, they will provide you with all sorts of excuses for why this is necessary: materials can’t be sourced; subcontractors are on leave; personal hardship has stretched them thin.

HOW COULD YOU KNOW?

But the thing is, you have no way to challenge or verify these claims. And more to the point, none of this stuff should be your problem anyways!

You’ve paid a contractor to manage your project for you. As such, the issues mentioned above are their responsibility, not yours. You shouldn’t be punished with a three day job that turns into three weeks.

Get serious with your contractor at the outset about how long the job will take. If they waffle, ask them if they will discount a job that goes badly over schedule. If they just seem unwilling to work with you on this, there’s a good chance that they aren’t going to honor their time frame commitments.

5. UNDERBUILDING BY BAD CONTRACTORS

My final example is the hardest for clients to identify–and easily the most harmful.

“Underbuilding” is a term I use to encapsulate any work that simply isn’t up to industry standards. It can be as innocuous as a poorly painted wall, or as dangerous as structurally inadequate framing.

Good contractors will go out of their way to make sure that their jobs are fully code compliant, that work is carried out to a high standard of finish, and that everything gets thoroughly wrapped up.

BE SURE TO GET A PERMIT AND HAVE THE WORK INSPECTED

Bad contractors will look to cut every little corner they can. It may be slapping on one coat of paint instead of two. Or neglecting to use expensive metal hardware on a deck. They simply do what they have to do to get a project looking mostly finished. Then they hope that they can draw a check without the client realizing anything is wrong.

Clients simply don’t have the knowledge or level of experience to identify what has been “underbuilt.” So, bad contractors can get away with these things.

Do you have a carpenter in the family who can look things over during or after the project? If not, then press your contractor for more specifics on the project before it begins. As work unfolds, just ask them to show you the things they explained beforehand.

IT HELPS TO BE A REASONABLE CLIENT

I’m really not trying to get anyone to badger their builder. One of a contractor’s worst headaches is a client that questions the validity of everything, and constantly approaches their work with extreme suspicion

But, as a client, you’re laying a lot of money on the line for a project. And, you’re relying on your contractor for an expertise that you yourself don’t possess. They should be obliged to answer some questions. Often, this is the only way to be sure that you understand the scope of their work. (And that they’re actually carrying it out).

(Here’s a link for more information on modern residential building codes. It can be interesting just to browse this literature and learn a little more about engineering safety standards.)

BAD CONTRACTOR WRAP-UP

I hope these few tips help prepare you for some of the pitfalls that might lie ahead in any construction project. In the end, the gold standard in any trade agreement is trust. Do you feel that you can trust the person who is doing your work or managing your project?

For this reason, a good contractor or tradesman is worth their weight in gold. If you have to pay them a little more, so be it. They’re charging more because they’re worth it.

In the end, bad contractors and tradesmen will always wind up costing you far more than good ones. It’s bad enough that will you have to pay their fee. You’ll also have to pay the fee of the person who comes to fix their mistakes!

(For more clarity on what separates a “contractor” from other trade experts, check out this article I wrote. Contractors, Carpenters and Woodworkers.)