Here's How You Can Protect Your Business

8 Indicators of Contractor Scams Part 1

Over the years, our Florida contractor lawyers have dealt with an array of professional contractors. Unfortunately, just like any other profession, not all contractors conduct their business honestly. Contractor scams are more common than you might think, so it’s important to do everything in your power to separate yourself from the “bad” contractors and align yourself with the “good” contractors. A quick Google search for “contractor scams” will almost always turn up a few recent cases involving contractors who tried to increase their profits at the expense of their client.

When you partner with a Florida contractor lawyer from Cotney Construction Law, you will always have a legal representative on your side to ensure that you are compliant with state and federal laws. In this two-part series, we will discuss eight different indicators of contractor scams. By ensuring that you avoid making any of these mistakes, you can build trust between yourself and your clients and protect yourself against any potential litigation stemming from negligence, breach of contract, or something else entirely.

#1: Where’s Your License?

Sometimes, a person with connections to the construction industry will try to pose as a contractor to cash-in on jobs they aren’t qualified to take on. This is extremely common in the wake of a natural disaster. As people are scrambling to get their homes repaired, they often fail to ask for proof of licensing. “Door-to-door” contractors often lack the necessary licensing to perform the fixes they are proposing. Most state licenses do not permit contractors to work out of state, so consult with a Florida contractor lawyer to get a better understanding of where you can seek jobs.

#2: Suspiciously Large Deposits

Every state has unique regulations that determine the amount a contractor can request for a down payment or deposit. Typically, this figure ranges from less than 10 percent to around 30 percent. Even if you are concerned about a client’s ability to compensate you for your work, don’t demand an unrealistic deposit. Your contract will ensure that you are paid for any completed work.

#3: Abnormally Low Bids

Most homeowners know that they should get at least three bids before proceeding with a contractor. However, an abnormally low bid can lead to disappointment. Make sure your bids are realistic and achievable before submitting them. Contractors who claim they can do the work for less but produce at a substandard level will inevitably leave homeowners feeling like they’ve been duped. Remember, the cheapest bid isn’t always the best bid.

#4: No Contract, No Business

Always utilize a contract whenever you agree to complete a project for a client. Contracts are the foundation of construction-related projects and without one, your work is simply not being performed legitimately or legally. Even quick jobs require contracts to outline the cost, timeline, and scope of work. You are only hurting yourself if you fail to establish a written contract between yourself and the owner.

To learn about the other indicators of contractor scams, read part two.

If you would like to speak with our Florida contractor lawyers, please contact us today.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.