Practice Areas Menu

Protect Yourself Against Contractor Fraud!

In the aftermath of Sandy, many municipalities have modified their permit and approval procedures to enable the victims of damages caused by the storm to begin to rebuild their homes and lives. However, in the quest to re-build their homes, many residents are hurrying through the selection process to find contractors to begin construction and forgetting some important steps to protect themselves. These are some important reminders that every resident should consider in hiring contractors and choosing their plan of re-construction.

First, prior to hiring a contractor the homeowner should confirm that the contractor is licensed with the State of New Jersey. This can be easily accomplished by confirming that the contractor is registered with the State of New Jersey in accordance with the Contractor's Registration Act. A homeowner should also confirm that the registration is not expired, suspended or revoked. The Contractor's Registration Act requires every registered contractor to have a proper registration number. If your contractor cannot provide a number that has the prefix 13VH then the homeowner should access the State website for Community Affairs to review the list of contractors who are presently facing Notices of Violations prior to hiring them. Additionally, that registration number ensures that the contractor has the proper liability insurance.

In addition, it is important to discuss with the contractor who will obtain any necessary permits. This step in the process maybe somewhat modified from the traditional permit process, as many municipalities have new, easier procedures for victims of Sandy to re-build and repair storm damage. The contract between the parties should establish a payment plan, especially if the resident is awaiting insurance proceeds to pay for the cost of the work. Many insurance companies may not pay out the full amount of the insurance proceeds in a lump sum. The insurance company may require installment payments as work is completed or refund the homeowner a portion after the work is complete. It is best that the homeowner and contractor agree on the payment schedule with a full understanding of the homeowner's insurance policy.

Of course, if there is a situation where a contractor leaves without completing a job or does not complete the project in a workmanlike manner, the homeowner can contact the Law Firm of R.C. Shea & Associates to protect their rights.