You’ve worked long and hard to become a successful contractor—skipping restful nights to keep projects on schedule, traveling from site to site to ensure that your workers are following the correct procedures, and investing your heart and soul into an ultra-competitive, often thankless business. However, the results have been worth it. Every building erected is a monument to your success and leaves a lasting impression on the community it benefits. Unfortunately, all of this progress can be undone by committing fraud against an owner.
In part one of this two-part series, our Miami construction attorneys answered the titular question: what is contractor fraud? Now, we will explain the various ways you can avoid fraudulent actions to retain your license and continue serving your community for the foreseeable future. Remember, fraud is fraud regardless of intention, so it’s a good idea to partner with a Miami construction attorney who is well-versed in handling all facets of construction law including contract review, license defense, dispute resolution, and litigation to safeguard yourself against a potential lawsuit.
Avoiding Contractor Fraud
How can you avoid accidentally committing fraud? As we mentioned in part one, contractor fraud can be intentional or unintentional, but most cases are the result of calculated actions taken by a contractor to defraud an owner or investor. Still, negligence can result in fraud, so it’s best to understand how you can prevent it from happening in the first place. This includes:
- Never request an exorbitant payment up front. Owners should never pay more than 10 percent of the total project cost up front.
- Ensure that your contract includes all verbal and written agreements. Your contract is supposed to include all the important details of your project. Omitting information can lead to fraud whether intentional or not.
- Obtain the right permit for the project you plan to complete. Surprisingly, unlicensed contractors aren’t as rare as you may think, so it’s imperative that you have the proper licensing.
- Your contract should include provisions for additional work that require joint signatures from the owner and yourself.
- Do not try to sell materials to an owner or another contractor for a reduced price. Although this isn’t illegal, it is a tactic commonly utilized by fraudulent contractors to sell stolen or unpaid for materials.
Partner with a Miami Construction Attorney
When you partner with a Miami construction attorney from Cotney Construction Law, you can rest assured that your contracts will be reviewed thoroughly to avoid potential cases of fraud. Contractor fraud requires legal representation that is familiar with the nuances of the construction industry. Our Miami construction attorneys are well-versed in all facets of construction law and have the skills necessary to represent you in court.
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.