Here's How You Can Protect Your Business

8 Indicators of Contractor Scams Part 2

In part one of this two-part series, the Florida construction attorneys at Cotney Construction Law discussed four different indicators of contractor scams including:

  • Lack of license
  • Large deposits
  • Low bids
  • No contract

Now, we will discuss four other indicators of contractor scams. As a contractor, you must avoid these pitfalls to ensure that you and your company maintain a positive reputation. Cutting corners to cut costs can seem like an attractive option when business is slow, but your reputation is too important to compromise through ill-advised actions. Consult a Florida construction attorney to ensure that your contracting business is following all pertinent laws and regulations; otherwise, you could be stripped of your license.

#5: No Office or Permanent Place of Business

Although it’s not uncommon for contractors to reach out to property owners who have visibly damaged buildings for work, most owners who need the services of a contractor will seek out a brick and mortar establishment to discuss their needs and sign a contract. Contractors who don’t have an office or permanent place of business often lack the proper licensing to complete jobs. Plus, owners want to know that they can find the contractor they’re working with if an incident occurs.

#6: No Insurance

As a contractor, you’re likely familiar with the two types of insurance every contractor should possess—general liability and workers’ compensation insurance. If you have failed to renew your insurance coverage or never had any at all, your actions are comparable to those of a scammer. Insurance is crucial to any contracting business.

#7: Poor References

Owners, especially owners of commercial real estate, will typically request references from a contractor before agreeing to the terms of a contract. Contractors who lack references rarely get large jobs and more and often than not, are working without the proper licensing or experience. Make sure that you have at least five strong references before attempting to procure a bid on a project.

#8: “The Hook Up”

Special pricing is a huge red flag in the world of contracting. Simply put, construction-related jobs require a considerable expense. Contractors who are trying to give you an abnormally good deal on a job are often looking to cash in on the owner’s deposit. In many instances, they don’t have the capabilities to perform the job they are proposing at such a low price.

If you would like to speak with a Florida construction attorney, 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.