Important Things to Consider Before You Sign on the Dotted Line

by Patrick Schurr | Contributor

Follow these guidelines to protect yourself from crooked contractors and/or shoddy repairs.

PART ONE: AVOID THE DOOR-TO-DOOR SALES PITCH!

Be cautious when a salesperson appears at your door uninvited. Two very common sales pitches often associated with home improvement scams are:

• The salesperson “was in your neighborhood and noticed that you needed siding, storm windows or some other improvement.”

• The salesperson “just did some work in your neighborhood” and has “extra building supplies that would be just enough to repave your driveway or reshingle your roof.”

Both come-ons are red flags. Businesses that do a particular kind of home repair do not generally cruise neighborhoods to knock on doors, looking for houses that need them. This would not be a very efficient way to find business.

And while most contractors will put up a sign in the yard where they are working to try and win some neighborhood business, they are not likely to go door-to-door selling leftover materials. They are more likely to use the leftovers on the next real job.

Home improvement scams often flourish in the wake of disasters, especially violent storms like those we have experienced recently in Plano and North Texas. Some legitimate repair specialists may work door-to-door in these circumstances but so do con artists.

PART TWO: KNOW YOUR CONTRACTOR

Take time to choose the person who will work on your home. It is a good idea to choose a contractor with an established physical address. It is common for people in construction to use cell phones, but you should be sure you can find anyone who has done work on your house, in case problems arise.

The best policy is to get bids from more than one person for any work you are going to have done on your house. Get the bids in writing and look for details about exactly what will be done.

Seek references. If you are hiring the kind of worker who must be licensed by the state (such as an electrician), contact the licensing agency to check the person’s credentials and inquire about complaints.

PART THREE: GET IT IN WRITING

Most home repair and remodeling work is performed pursuant to a written contract between the homeowner and the contractor. Legitimate businesses will usually insist on having a contract for their own protection, and a well-written contract should protect the homeowner, too.

DO NOT sign a contract with blanks in it. It happens: the blanks get filled in later, and the new terms are not likely to be in your favor.

DO NOT sign a contract until you have carefully read and understood every word of it. Sometimes it can be difficult to get out of a signed contract.

Make sure everything promised to you is in the written contract. Insist on a contract that specifically states what the contractor will do, when the work will start and when it will be completed. Make sure the contract includes everything the salesperson or contractor promised and spells out the cost of special orders and materials.

Get and keep copies of everything you sign at the time you sign it.

PART FOUR: WHAT THE CONTRACT SHOULD SAY

Any contract you sign for work on your homestead must contain the following warning next to the space for your signature:

“Important Notice: You and your contractor are responsible for meeting the terms and conditions of this contract. If you sign this contract and you fail to meet the terms and conditions of this contract, you may lose your legal ownership rights in your home. Know your rights and duties under the law.”

When you sign a contract for home improvements on your homestead, the contractor can legally place a lien on the homestead provided that he complies with the Texas Property Code. If you sign a contract containing the language quoted above and you fail to make the payments, you risk the possibility of the company enforcing their lien. If your contractor fails to pay the subcontractors and suppliers, YOU may be responsible, even though you have not contracted directly with the subcontractor or supplier.

If your homestead improvement exceeds $5,000 in cost, the contractor is required by law to deposit your payments in a construction account at a financial institution. Ask the contractor for written verification of the existence of the construction account. Monitor deposits and disbursements to subcontractors, laborers and vendors.

Just that simple, right?!  

Patrick Schurr, a partner with the law firm of Scheef & Stone, L.L.P., represents large and mid-size corporate clients and individuals, including financial institutions, manufacturers, distributors, and companies in the construction industries. In addition to representing clients in complex commercial litigation and bankruptcy-related litigation, he also represents business clients and individuals in contract disputes and collection matters in both the state and federal courts in Texas through trial and settlements prior to trial.  He received his J.D. from Texas Tech University in 1989 and his B.A. from Vanderbilt University in 1986. 

For questions or a consultation, contact Patrick at 214.472.2136 or patrick.schurr@solidcounsel.com.