What The Downturn in Residential Construction Has Given Consumers

Last week I spoke with a contractor - whom I hired to do some landscaping that requires the buildup of two small walls - not retaining - with some grading and backfill. Not a big project by any means but we got to talking about the current state of construction and how his business is surviving the downturn. According to him, they are doing OK but his phone isn't ringing off the hook as it did in the years past. They have also scaled down to their original "trusted" choice of subs they've worked with for years and the other sub contractors they brought in during the booming days are now gone.

On that subject, we talked about the difficulty many contractors ran into with taking on new subs that they didn't do any background checks on - because they were too busy to do so - and very often it came back to bite them in the form of shoddy work and complaints from homeowners. Which is why homeowners need to do their own checking on the subs their general contractor chooses and include in the contract that they must be licensed and insured, separate from the contractor himself. Using this contractor as an example of some one who ran an ethical business and prided himself on producing quality work, once he chose to deviate from his usual practice of vetting his new subs to bring on for the added workload, he ended up taking the hit and spending money to correct the problems created by the new workforce. And that's a lesson he learned and when things pick up he states he will be more careful in his choices and make the time to vet new subs. But clearly, that's a problem I've heard from other contractors as to their available pool of so called "skilled" workers. And that's another area where educating the building workforce on meeting industry standards and quality workmanship needs to be fostered on a local level. But does the industry care enough to raise the bar and the need for greater education? If so, it certainly hasn't worked so far. Complaints against contractors for shoddy work is still the number one complaint with national consumer organizations.

Finally, the contractor made an interesting and likely correct assessment of todays' still standing and thriving -albeit much more leaner - contracting workforce. And that is given the downturn and lack of demand for residential construction those contractors - licensed or not - have left the area or have taken on other work as their only interest was to cash in on the renovating boom of years past. These guys were not interested in building a sound business and creating a solid reputation in their communities. A lot of these characters easily got licenses or registrations and jumped on the bandwagon and started basically ripping consumers off. And there were far too many of them; I don't care what anybody says the proof is in the complaints and resulting messes left behind by these con-men and I was sickened by the numerous complaints I received over the last nine years. And the contractor not only agreed with me but shared some stories he witnessed of these so called contractors taking advantage of unassuming homeowners.

It is my intention with the help of my Home Remodeling Boot Camp For Homeowners that the next round of an up tick in residential construction will yield more educated consumer swho ultimately can help themselves avoid a construction nightmare and mitigate the most common problems most homeowners make.

Debunking Conventional Thinking When Hiring Contractors

Over the last year I have had frequent discussions with a construction consultant discussing various ways in which we could help consumers understand the need for educating themselves on the risks and realities in residential construction. For himself, locally with consumers and me on a national scale.

And one of the areas I would like to shine some light on is the notion that everyone suggests homeowners to do -myself included - when vetting their contractors. Here it is:

Consumer agencies and home improvement sites who offer tips to homeowners on how to properly vet their contractor always suggest that the homeowner visit an ongoing project that the contractor has going. OK, well what will that tell the consumer? Do they know what they are looking for and why? Do they understand anything about constructing a house? How important is this in the scheme of things that is important for the consumer to do in their research?

Using our case as an example, we went to a project the contractor from hell supposedly had going and the walls were open so that you could see the studs, joists, brackets and essentially the guts before everything was sealed with the drywall. There were no windows or doors installed yet, but my husband with a background in construction knew what he was looking for but me - not so much. I relied on his expertise. The only thing that could be construed as a red flag - and probably was given our experience with the contractor from hell, was that we had gone by the project three different times over the course of several weeks and no one was ever there working or otherwise.

So the lesson here for the consumer is, with all the other factors that must be researched and considered when preparing to get your project underway ,visiting the job site of someone else's projects tells you little to nothing about the contractor or even how it will translate to your particular project unless you're schooled in construction practices. Otherwise, you're clueless as to what you're looking at and so I have to consider this one suggestion for homeowners as pretty much worthless in the overall vetting of your contractor.

There are so many other essential and critical areas to discern that will truly help the homeowner to achieve a more positive home remodeling and building project and I'll touch on those in future blogs.

Mandatory Arbitration Clauses / Construction Defects

Mandatory Arbitration is the worst clause a consumer can agree to as it strips them of their rights to a jury of their peers. And it's no surprise that Construction arbitration firms were either created by or with the help of major homebuilder associations, causing an immediate conflict of interest. I found an article on this subject that is a must read for any one entering into a contract to either renovate or build a home:

Home builders Stack Deck Against Buyers With Arbitration: New Report shines light on unscrupulous practices

Also, construction defects are beginning to rear it's ugly head around the nations a a result of the building frenzy in the late 90's and 2000.

Fallout from the 90’s Housing Boom: Construction defects begin to appear

Introducing a Construction Consultant Familar with Home Remodeling Nightmares

This past year I've pretty much devoted my time to putting together the Home Remodeling Bootcamp For Homeowners in an effort to really get consumers involved in doing as much homework and research in the areas that will ultimately determine the success or failure of their project. The last 9 years of counseling the "walking wounded" that have ended up on my site asking for help with their horrible situations really motivated me to create the Bootcamp. There were some common themes throughout all their stories that, had they known about in advance, would have saved them from a construction nightmare. And the same holds true for my own nightmare 10 years ago. If I knew then what I know now, well, I guess the ContractorsFromHell.com site would never have been created. With that said, it was my intent - and still is - that my experience and those of others could help homeowners avoid the pitfalls that we experienced

One of the points I bring out not only on my website but in the Bootcamp as well is finding a reputable Construction Consultant or Home Inspector that you can bring in at specific milestones of your project. This is a third party who can advise you on any challenges or questions you may have going with your contractor and renovation project. You can read more about that in detail on my site as well as in the Home Remodeling Bootcamp For Homeowners introduction page.

On the subject of Construction Consultants, I was contacted by a consultant out of New Jersey about a year and a half ago who found my website and wanted to introduce himself and let me know that he was very much in agreement with my views even though we come to it from different experiences. His name is Mark Trapani and the owner of Contracting Smart. And so we started a dialog and began exchanging information and ideas on what we could do within our own respective businesses to help consumers make better choices in contractors as well as educate them on the risks and realities of renovating an existing structure. Not to mention key components needed in the contract, spec sheet and complete transparency for all parties. Mark also is vested in educating contractors and architects in the business of contracting and how they can contribute to a better outcome with their clients.

We're now talking about developing a joint venture together and I'll be sharing more about that here on my blog. Until then...

Launching the Home Remodeling Boot Camp For Homeowners

OK - so it's been nearly a year since I've blogged on the Remodeling Lessons Learned blog but it's been in the interest of creating a new feature for the ContractorsFromHell.com site. True too, construction has been hit hard in the slowing economy and the resulting job losses have been great. I've spoken with a number of contractors the last 12 months who are really hurting and those with employees that had been with them during the fat times had to be let go. Fewer folks are renovating or building new homes and banks aren't lending. Grim to say the least.

But with that said there are those folks who out of necessity - fire, floods, water damage - that will be looking to remodel, repair, or reconstruct their homes as the economy begins to show glimmers of coming back around, albeit slowly. And that is actually beginning to happen.

In my neighborhood there are a number of homes undergoing renovations and on recent walks two new remodeling projects have popped up this week. Sure, it's not like the frenzy we've all witnessed in the previous 8 to 9 years of building and remodeling created in part by the banks' "loose lending" and refinancing during those years but it shows that people are beginning to show some confidence in spending their hard earned money.

But I want to get back to what I mentioned earlier in this blog post regarding the new feature I've been working on the past 12 months. And that is is "Home Remodeling Bootcamp For Homeowners" which is comprised of 12 core lessons that takes the homeowner through specific informational steps, downloads and links to relevant sites to help them understand the potential risks in construction projects, how to protect themselves, what to include in their contracts, what they need to consider including in their specifications sheet and the importance in doing so and much more.

I'll be touching on each of those core lessons in the Home Remodeling Bootcamp For Homeowners on this blog as well as what prompted me to create the Bootcamp in the first place. And I'll also talk about a new working relationship I've been forming with a Construction Consultant / Engineer / Contractor whose view of the construction industry as a whole is similar to mine. You'll learn more about him and his work in future blogs.

But for now, welcome back. And that goes for me as well ;-).

This past week I had the opportunity to be on a morning show based out of New York - The Morning Show with Mike and Juliet - where contractor scams and avoiding hiring unethical contractors was the theme of one of their segments. They opened the segment with my story where they had filmed me at my home in San Diego. They interviewed me briefly on the show and there was another woman from Pennsylvania whose contractor took $20,000 up front with the contractual starting date a few weeks later. Well it was more like 5 months later when he began but he sure was having the time of life using her 20 grand for God knows what.

He then went on to perform shoddy, unsafe work and dragged the project out for months always saying he needed more money in order to come back. $114,000 later he abandoned the project leaving her with just a shell and no protections from the elements. He was no where to be found and the city had to condemn the home leaving the family homeless. Apparently he did this to 14 other homeowners, one of them being a police officer and that's when he got caught. He's now sitting in jail waiting for his trial which is set for June 30th. In the meantime they've lost everything and have had to use their kids' college savings to survive on. I met them at the show and the kids just really looked depressed. I felt so bad for them and understood completely their disillusion with the construction industry, the legal system and the lack of consumer protection laws in their state.

Some States are far better at providing and disseminating important consumer protection information and guidelines than others. And the legal system in various states are more aggressive when it comes to punishing the offending contractors than others; so many of them are let off the hook only to go on and harm others. Its a vicious, dysfunctional cycle that the regulatory agencies are unable to control which only renders them useless when you're talking about protecting the consumer. Truth be told, they don't know how to do that in a way that works and can only perform the administrative end when it does come down to citing a contractor which typically isn't disclosed to the public until the contractor racks up a sufficient number of complaints and then it's too late. He/she has damaged a significant number of homeowners and has collected alot of money along the way and can go to sleep at night knowing what he/she has done. It's sick and something has got to give.

The attorney on the show, a litigator from New York shared with me that even though they may win cases against errant contractors they rarely can collect because these guys immediately file bankruptcy and do not carry General Liability insurance. And their not gone forever; they typically emerge in another city or state where there are limited or no licensing requirements and that's scary. California, Arizona, Nevada and Utah have somewhat similar protection laws and thus have reciprocity agreements in place where they can cross check applicants who apply for licenses. This would at the very least be a good fix to have with more states doing this to keep the roaming transient contractors from working and feeding off unassuming homeowners.

Next blog I'll talk about background checks and what I'll be offering for consumers and contractors alike.

Got an email regarding mechanics liens and unfortunately the email they provided me to respond was incorrect so I'll answer it here. But first the question:

As part of my kitchen remodel project, I purchased maple kitchen cabinets from a kitchen & appliance store in Burlingame, CA two years ago. I had my contractor install the cabinets. After installation, we discovered that the outside panel of the pantry came unfinished and wasn't maple but birch (it actually should have been the inside panel of the pantry that isn't seen). After going through several different unsatisfactory scenarios to try and correct the problem, the kitchen & supply store hired a wood refinisher to put a veneer on the unfinished panel and stain it. The work was completed approximately 3 months ago. Yesterday i n the mail I received a letter from the wood finisher stating that because the kitchen & supply store had failed to pay the invoice, he was demanding payment from me and he will place a lien against my property if I don't pay it. I have discovered that the kitchen & supply store is going out of business and it wouldn't surprise me if he is also filing bankruptcy. My question is this, given the fact that I did contract with this person to do the work, am I liable to pay the outstanding invoice that was sent to the kitchen & appliance store?

If you have a direct contractual agreement with the wood finisher, he has 90 days from the last time he was working on your project to officially record the lien with the county. If it is past that time he has lost his lien rights. Many contractors get sloppy with these time lines and often miss them but threaten anyway. They are betting you don't know the lien laws. Anybody can file a lien but to perfect it in court the burden of proof is on him and he has to meet strict criteria to win his case. Plus he has to hire an attorney to do this and that will cost him, so he must be absolutely sure he meets the requirements of the law.

If the kitchen store hired him as a subcontractor, then he has to send you a preliminary notice within 20 days of starting work on your project in order to retain his lien rights. Again if he didn't, he still will try to get money from you by filing a lien but he doesn't have any stand at this point. Be sure to read the section on mechanics liens on my site as well as the CSLB site.

Check your time line on when he was last on the property. If it is past the 90 days, he doesn't have a solid case. You can wait for the lien to become null and void and then petition the courts to have it removed. You can also consult with an attorney who specializes in construction law who can counsel you further.