Friday, December 07, 2007

Here's a scenario that is common practice amongst unethical
contractors: The homeowner pays the General Contractor who in turn is
supposed to pay the sub contractors for work performed. But the
contractor decides to pocket all the money and later down the road, the
homeowner gets hit with a mechanics lien against their property from
the unpaid sub contractor. This is when panic sets in which then leads
to anger. Perfectly understandable and warranted.

But there are a few checks the homeowner can do to see if in fact the sub has the
right to actually perfect the lien. That's what you need to find out first because if they don't have that right to perfect the lien then it's just going to sit there until it becomes null and void and then you can go about the business of removing the lien. You can petition the courts to remove the lien yourself (the paper work required is a bit of a hassle) or you can hire an attorney to do it for you.

You can read more about mechanics liens in this section on my site.

Anyone can file a mechanic's lien but the letter of the law must be followed
in order for the person to actually make good on the lien. Sub
contractors must first send the homeowner what is called a "Preliminary
Notice" of the right to lien if they are not paid by the contractor.
Though each state has different time lines for this, in California it
is 20 days once the sub has begun work on the project. If he sends it
out 30 days later that would be too late and he missed his chance to
legally lien if he doesn't get paid by the contractor.

If the sub is outside of the time lines he will likely file the lien anyway as a way to get money from the homeowner, hoping they don't know about the law and required time lines and if they do and challenge the sub on it they'll likely ignore you and just let the lien lapse. Happens alot and it's one of the top complaints I receive each month.

The problem with the filing of fraudulent liens by a sub can be avoided by
requiring "Unconditional Lien Releases" from each sub on the job who
has performed work when you pay the general contractor for each invoice
you're presented. This is a separate lien release from the one the
General will present you with that he signs for his part as he cannot
sign for the subs: the sub contractor needs to acknowledge he's been
paid by the contractor with their own release and signatures. So it can
get easily overlooked but it's one of the best ways to stay in control
of the money being paid out.

The following email I received from a homeowner in New York is a good example of a sub who was not paid by the contractor and is going after the homeowner even though he did not file a Preliminary Notice within the required time lines for that State:

The contracting services is a private residential in new york. Job was completed 7.5 months ago. I have paid contractor in full but disagreed to the amount on the extras as he did not invoice me until the very end. Read More...

Tuesday, November 27, 2007

On November 16th I participated on a panel that was set up to help the Firestorm victims (San Diego County) avoid unscrupulous contractors looking to scam unsuspecting homeowners who are beginning to rebuild their lives and homes. There was a whole lot of good information being dissemenated rather quickly and I knew that the most important points being made were going to be much needed six months from the event and we would likely be a faded memory. Getting people to re-visit the information provided and the various websites such as contractorsfromhell.com is going to be key to jogging their memory and getting down to the business of doing their research on potential contractors.

A successful home building and remodeling project is dependent upon hiring an ethical, reliable, competent and experienced contractor. In California as well as many other states, the first step is to check with your Contractors State License Board and verify that the contractor has a clean record, that there has been no history of complaints, disciplinary action and the license is not revoked on suspended.

However, just because a contractor has no complaint history does not mean that complaints have not been filed with the Contractors Board. The Contractors Board cannot disclose complaints until and unless there have been a sufficient number racked up and egregious enough in nature to be referred to the Attorney Generals' Office and THEN the dirty deeds are revealed. In the mean time, unsuspecting homeowners are hiring these unethical contractors and surprise, surprise - getting slapped with a shocking dose of reality and a whole host of problems.

Which brings me to my next key point: Just because someone is licensed DOES NOT MEAN he/she will be ethical or perform quality work meeting industry standards. This same principal applies to organizations with paid memberships such as NARI,NAHB or the BBB. Unethical individuals will use the membership to promote themselves as fine upstanding individuals when nothing could be further from the truth. It's unfortunate that they abuse the membership but there are so many contractors over the years -including my own contractor from hell- who have been revoked, suspended, served jail time, committed grand theft and more and were members of these organinzations. Don't be lulled into thinking that if you hire someone from these organizations you're safe. You still have to do your background checks regardless of how you found the contractor. You can learn more about conducting background checks by following this link to contractorsfromhell.com.

And just to illustrate some of what I'm talking about here is an email I received this week from a homeowner who found out after checking that the license with the CSLB was "clean" later found out- after problems began to crop up with the contractor-that suddenly complaints started to show up. Happened to me and it was a hard lesson learned:

Hello, We checked out our contractor's status with the CSLB in April, and we found no complaints. We also checked the BBB. Then in mid October they were insisting that we provide the next progress payment before the next stage was completed. We of course refused. His insistance made me wonder what if he was having problems with another job. I checked the CSLB , and I found that there were now complaints showing. I then noticed that their license was now suspended because the bonding company had not canceled their insurance. Shortly thereafter they did obtain new bonding insurance retroactively. Once reinstated, we continued to debate when the next progress payment should be paid. During that time I received two preliminary notices. I then insisted on being provided with unconditional waivers for previous progress payments. I am also insisting that with my next progress payment, that he pay subs or material suppliers for any work already completed. I will provide him with a cashier check for each party, but I must obtain an unconditional waiver from each sub for past work. He is refusing to pay one of the subs until the end, but the bill from the sub is higher than what my final payment will be. If he refuses at the end to pay him, I will then owe the sub contractor . I have reported this company to the CSLB. How can they insist that they will not pay the subs until the end of the job?

You can read my response to this consumers' query in my FAQ section on contractorsfromhell.com

Monday, November 05, 2007

In San Diego county the last couple of weeks have been the worst for everyone living in and around the city as the Santa Ana winds and severe dry weather conditions yielded one of the worse fires in our histroy that destroyed over 1000 homes and forced more than 500,000 people from their homes. The nations' media descended upon our city broadcasting to the world that Southern California was burning out of control, people fleeing their homes and evacuation shelters were springing up around the county. It was horrible to witness on TV and when coastal communities were being evacuated I was shocked to hear of the eminent danger as I too live on the coast though 25 miles down from these communities. Still, the fire knew no boundaries and I momentarily envisioned what I thought would be impossible. It never happened but the thought was enough to keep me glued to television and radio for days.

In the midst of all this the local agencies and politicos were rushing to warn victims and scam artists - such as smary, unethical contractors - that contracting without being a duly licensed contractor in an area that has been declared as a state of emergency, is a felony and all penalties are increased and mandatory jail time is enforced. What struck me is how quickly all these agencies were coming forward about the very real problems of contractors willing to scam homeowners because frankly it happens everyday not just in San Diego or California but throughout the nation. It really supports the notion that there are more unethical contractors out there - who happen to be licensed - as well as revoked, suspended, and unlicensed contractors - who are ready to prey on people regardless if it's legal or not. You can be licensed but still perform shoddy work, can still front-load contracts, can still cause problems for owners and be a shady individual. That happened to alot of the 2003 Cedar Fire victims who dealt with licensed contractors but had some serious problems and the Contractors Board stepped up their usual enforcement because of the fire disaster. Otherwises it would have been "business as usual" with complaints taking months to get assigned and resolved

The bottom line is that homeoweners every day are faced with the possiblity of hiring an unethical, licensed contractor just as much as an unscrupulous, unlicensed or revoked contractor. The difference is that the licensed contractor - if he/she is interested in keeping the license in good standing - will correct his behavior and start performing ethically. The other ones make a living out of scamming homeowners and aren't put off by fines or the threat of regulatory agencies. And there is plenty of these kinds of individuals out there.

Friday, October 12, 2007

If there is one email I can count on getting pretty regularly it would be the "I'm at the point where I'm thinking of firing my contractor". The homeowners are always at their wits end and have tried to get the contractor to either continue on the job, perform work on a consistent schedule, repair obvious shoddy work or are suddenly faced with some "extra work" performed without their consent and the demands for payment are fast and furious.

Before any homeowner comes to this decision there are definte steps that must be taken before the contractors' walking papers are given. Proper documentation and copies of certified letters sent to the contractor requesting specific problems needing to be resolved, are just a couple of steps a homeowner must take to legally protect themselves down the road. You'll also want to consult with an attorney to discuss your civil exposure and file a complaint with the regulatory agency that oversees the contractors laws in your state.

Be sure to read the article "The Right Way To Fire Your Home Remodeling Contractor" for more discussion on this subject.

This week's blog was inspired by a homeowner who wanted my thoughts on firing her contractor. Her situation and my response can be found at my FAQ section at contractorsfromhell.com

Tuesday, October 02, 2007

I've heard from many consumers over the years who hired a friend - sometimes licensed, sometmes not - to perform some type of remodeling project. And it just never turns out to be the smartest idea and very often it's the end of the so called friendship. Usually the lure is one of "saving money" and the guy could use the work and well, their friends". Yeah right. Quite the opposite typically happens.

The work ends up being shoddy and timelines are not met. Of course there is no contract and the homeowner usually has fronted a good deal of the entire cost of the project with very little to show for it. They've asked repeatedly for some progress and some folks ask for a contract after the fact. These kinds of scenarios rarely work out in favor of the homeowner and only add to their frustration and money lost.

Recently I received another one of these kinds of emails from a homeowners asking what her options are and my answer to her query is posted in my FAQ section of my site.

Bottoom Line: Don't do business with a contractor-friend and expect a great deal. Go through the steps outlined on my site, Tips on Hiring Home Remodeling Contractors as well as Questions To Ask The Contractor regardless of whom you're looking to hire.

Monday, September 10, 2007

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Wednesday, September 05, 2007

One of the first things a contractor learns and is advised to do by
training institutions and Contractors Boards alike is to retain an
attorney before they begin their contracting business. Makes sense,
given the problems and challenges that are likely to arise for the
"newbie" or up and coming general contractor. Truth be told, the
majority of contractors are not personally well-versed in business
management and ethics. More importantly, there are those individuals
who are lured by the potential to make a whole lot of money - easily -
and aren't committed to truly building a business; there out to get
their hands on the consumers hard-earned money.


Given this very real scenario, it is imperative that homeowners consult with an
attorney specializing in construction / defect law before they hire a
contractor and sign a contract. Even if it's just a kitchen remodel -
which requires a number of different tradesmen, where important
decisions will need to made, with consistent supervision, permits etc -
having an attorney review andred line the contract is key. After that,
a homeowner needs to have that attorney in their back pocket should
issues or questions arise, just like the contractor. And if you're
remodeling or building from the ground up, you absolutely need to
consult with an attorney. There's just too much that can go wrong or
overlooked legally in terms of protection and your rights.


Does consulting with and retaining an attorney guarantee a perfect,
problem-free home remodeling project? No - there are no guarantees in
life that I'm aware of other than death and taxes BUT you will be able
to mitigate anyunforeseen problems, have greater control over your
project and have some assurances that your behind is covered.
Additionally, you'll have access to your legal queries more quickly
than if you had no one or no idea of who to turn to when you need them
the most. Like the contractor who is advised to seek legal
representation beforebeginning the business of contracting a homeowner needs to do the same before contracting with a home remodeling contractor.

As a side note, the past several months I have received many a request for
attorney referrals from homeowners and interestingly attorneys have
inquired about promoting their services on my site via paid
sponsorship/advertising. And I believe it's a great match for both
parties. So coming this Fall I'll be putting together a section of
construction law/defect law beginning withCalifornia . Besides, I keep
getting legal questions from homeowners and It's about time they have
direct access to those who are committed to helpinghomeowners with their contractor issues and queries.

So stay tuned!

Monday, August 27, 2007

This past month of August proved to be a month of emails regarding mechanics liens, lien releases and one in particular about a Material Supplier who could quite possibly be in cahoots with the contractor.

There were a few homeowners who gave 50% or more upfront - with no work started as yet and the contractor would work for a week or so and then suddenly become a no show or would just work a couple of hours a week and drag out the project. After multiple phone calls by the homeowners, the contractor would throw a fit and demand more money. Shocked, the homeowners would argue that the project was just getting started and already behind schedule and that he was given sufficient funds to begin as "per the contract".

(And I bet you that contract is garbage and has little detail regarding the project).

Once the homeowners argue the facts, the contractor threatens a mechanics lien unless they pay up. And frankly they're screwed, because filing fruadulent liens are a dime a dozen with the intention to extort money and if that doesn't work cloud the title on the homeowners poperty. Unscrupulous, smarmy contractors make it a way of doing business and homeowners who get involved with these guys have likely not done a sufficient background check including even the basics of checking license status.


Yet another homeowner gave the 10@ up front required (California law) and a day later found out the the electrician failed to pull the required permits as per the contract and fired him. He also didn't have a business license and the work is suspect. The homeowner filed a complaint with the Contractors Board and the BBB and of course the contractor is threatening the homeowners with a mechanics lien. Now she is looking for an attorney and wanting to know if I have a referral for her. Another homeowner has had problems with a cement pad and patio cover built by a contractor and for the last two years he has failed to respond to her requests. Shoddy construction has her looking for an attorney as well.

Be sure to read the section on Mechanics Liens and to learn more about these homeowners stories at my FAQ section of contractorsfromhell.com

Tuesday, July 31, 2007

I frequently get emails from homeowners asking for help regarding their
home remodeling contractor. Usually the contractor has obtained
thousands of dollars from the homeowners before the job has begun, then
begins to show up less often and becomes difficult to reach. Much of
the time the contracts they have entered into with the contractor are
vague and the scope of work is less than detailed. Many homeowners are
confronted with the contractor asking for more money than was agreed
upon via the contract. Not knowing their (homeowners) rights, they hand
it over even though they don't really understand why the need for the
additional money but they "trust" the contractor; some are intimidated
and just don't want to create any problems.

I cannot stress enough how important it is to be in control of your home remodeling
project be it big or small. Knowing your rights from the get go and
having a well written contract that protects you is key to having that
control. If you're adding on to the square footage of your home it,
getting an attorney to review your contract is highly recommended.

Knowing your state's contractor laws, what the legal dollar amount or
percentage of the contract that can be obtained from the homeowner to
start the project are other considerations. I cover all of this on my
site with href="http://www.contractorsfromhell.com/hiring_remodeling_contractors.html">Tips
on Hiring Home Remodeling Contractors.

This past week I received a good example of why everyone homeowner should have an
attorney review their contract. A woman in California is shocked to
find herself at odds with her contractor and cannot believe how his
personality has suddenly changed to the point where he begins yelling
at her. Not surprising to me but you can read more about this woman and the problems with her contractor on my site.

Wednesday, July 18, 2007

This past week I have received several emails from California consumers
who are in the midst of remodeling their homes. Their questions all
have to do with dealing with bad home remodeling contractors who have
taken their money and have failed to perform the work according to the
contract.

One contractor refuses to take their calls or promises to meet with them but becomes a no-show. Another contractor has racked up over $50,000 in materials, refuses to give the homeowners' any receipts or proof of material purchases. Even stranger,
the materials supplier refuses to provide the homeowners with any
information about "their account" until six months later when the bills
have not been paid by the contractor. Then the material supplier sends
them a bill stating that there is "a problem", provides them with
invoices and slaps a mechanic'slien on their property. To add insult to
injury, the invoices include materials purchased for other jobs the
contractor had going but put them on this homeowners' account.

Another woman wrote asking for help for her father stating that he didn't do
his homework. The so called contractor took a large deposit and failed
to perform according to their contractual agreement, Moreover, she
checked on the guy's license and it seems that it has been revoked
since 2004. The license the contractor gave initially belongs to someone else.

None of these scenarios are unusual - and that's a sad statement of facts.
I have been getting these kinds of emails over the last eight years and
it only enforces my position on how little protection homeowners have
and their recourse is costly and the outcome not all that great.

The one common denominator these homeowners share is that none of them
filed a complaint with the Contractors State License Board yet all of
them wanted to know what course of action they should take. When
problems occur such as these, consumers should file a complaint with
the CSLB and if warranted at some point, consult with an attorney who specializes in contruction law. On my website - contractorsfromhell.com - I cover the steps that consumers should take when they encounter problems with their home remodeling contactors.

My point here is to remind consumers that they must take a proactive
stance should they find themselves involved with an unscrupulous
contractor because they didn't do their homework. File that complaint,
consult with an attorney and be prepared for what may be a ridiculous
fight. Ridiculous because of the lies and garbage the unethical contractor
will throw at you. Protect yourself and do your homework before hiring
a home remodeling contractor.

Wednesday, July 11, 2007

Who knew remodeling your home could become a horrifying and eye-opening experience about unscrupulous individuals with a license to destroy your plans and a government that allows it to happen with little oversight?!!

With so many emails from homeowners sharing their experiences and frustrations and many of you wanting to write letters to state officials demanding change, I say-yeah! Go for it - write those letters and send a copy to contractorsfromhell.com so we can support and document your efforts.

Earlier this week I received an email from a woman in California that brought up this issue and she was angry and shocked that what happened to her with her smarmy contractor cost her financially as the contractor declared bankruptcy and simply got another license and continues to work. And according to her, he's figured out a way to beat the system. Moreover, she believes the Contractors Board to be incompetent and wants to start a letter writing campaign to the Legislature to effect policy changes that govern the CSLB as well as contractors.

So I want to share with and enlighten all of you who have written asking (and criticizing) why is it that the government allows unethical contractors to continue to harm homeowners and the contractors doing so continue to get away with it. It all boils down to the Legislature who is driven by special interest groups - i.e., the Building Industry - who contributes a great deal of money to keep their interests and their support or rejection of bills before the House or Senate a priority. If it's good for consumers BUT should Industry believe it limits their interests and leaves their members (contractors) vulnerable to discipline, it ain't happening. Period. The pressure on the lawmaker to back off and reject the bill will be made known loudly by Building Industry representatives and that Senator or Assembly person will concede. Shameful but true.

Having worked with the Center For Public Interest Law in supporting consumer protection bills, as well as attorneys and the CSLB, I have been enlightened as to what really goes on behind the scenes and it's dispicable for the most part as to who calls the shots. Being a constituent really doesn't have a whole lot of influence with the exception of getting your vote at the ballot box.

I would like to think that at some point we could make a difference; but that would take millions of letters and phone calls to your representatives, not just a handful. And a whole lot of media attention.