Wash L&I Reminds Residents of Contracting Scams

May 31, 2005

Upfront work by a homeowner can help protect against a contractor who takes one’s money and runs, or does a poor job and won’t come back to fix the problem.

“It takes a fair amount of work to find a good contractor, but it’s easier than trying to recover from a bad one,” said Pete Schmidt, who is in charge of contractor registration for the Washington Department of Labor and Industries.

Schmidt steers homeowners to L&I’s online contractor database, which was visited by nearly 350,000 users last year. At Contractors.LNI.wa.gov, indiiduals can find out whether their contractor is registered with L&I, and whether that contractor has any current claims against his or her bond.

Contractors are required to:

* Register with the state.
* Carry a minimum of $250,000 of liability insurance.
* Obtain a $6,000-$12,000 bond (depending on the type of contractor) that a customer or supplier can use to make a claim against a contractor who didn’t finish a promised job, did the job improperly, or didn’t fully pay for supplies or labor.
* Contractors.LNI.wa.gov will help a homeowner find out whether their contractor meets these requirements.

Checklist for hiring a good contractor
Checking out one’s contractor on the L&I Web site doesn’t guarantee that he or she is a good one, or that they are qualified to handle a particular job, but it’s one of several steps individuals can take to protect themselves against unscrupulous or unqualified contractors:

* Interview several qualified contractors and solicit written bids. Bids that are significantly lower than all others should be questioned.
* Verify that the contractor is properly registered. Ask them to show identification and their L&I contractor-registration card. Then verify the contractor’s registration status at Contractors.LNI.wa.gov or by calling L&I’s toll-free contractor-registration line (1-800-647-0982) or by calling the local L&I service center, listed in the state government section of the telephone book.
* Review all aspects of the bid, not just the price. Materials, time frames, cleanup practices, required deposits and references are also are important.
* Ask for references on similar projects and go look at the finished product. Also, visit a project in progress to see how the contractor operates — is the site clean, do they communicate with the homeowner and follow-up in writing with changes? References should also include suppliers of products and subcontractors.
* Be wary of contractors who ask you to buy the building permit. Property owners can purchase a permit for work they personally do on their own property, but only a registered contractor can buy a permit for work on someone else’s property. Also, make sure that all inspections required under the permit are conducted.
* Be wary of a contractor who asks for a large deposit or the entire cost upfront. Ten to 15 percent of the bid price is normally sufficient. * Before work begins, ask the contractor for the required disclosure statement, called “NOTICE TO CUSTOMERS,” if one’s project is valued at more than $1,000. This statement provides individuals with information about their rights and responsibilities.
* Withhold 15-20 percent of the project cost until fully satisfied with the finished product.
* Try to anticipate problems and inconveniences such as cost overruns or cleanup, and make sure a written agreement is in place before the work is begun.
* Protect against liens on one’s property for a contractor’s unpaid bills. Individuals can make their check payable to both the contractor and the material supply house, pay for the materials themselves, or require a lien release at the time of delivery. Individuals may also want to consider a “performance bond” for any project more than $12,000.
* Put all change orders in writing and include the additional cost. Ask questions as work progresses. If not liking an answer or not understanding it, stop the work until feeling more comfortable with it.

What if the job goes bad?
To recover damages from a contractor, individuals must file a claim in the county superior court where the job was done. A description of the process can be found on the L&I Web site at http://www.LNI.wa.gov/forms/pdf/625088a0.pdf or by calling (360) 902-5753.

Was this article valuable?

Here are more articles you may enjoy.