Avoid home renovation rip-offs

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Every couple of weeks I get a call from a viewer with a complaint about home renovations. They always go the same way. "He seemed like a nice guy. He got right to work. He said he needed money up front to buy supplies. Once he got the money he never came back. When we phone him, we get a pager and he never calls us."

It's amazing how many people will research for months before buying a television set, but they entrust a complete stranger, just someone who left a flyer in their mailbox, with a $20,000 home renovation project. There are reputable, hard-working contractors out there, but unfortunately the profession is overrun with scam artists who start jobs with no intention of finishing them. Renovators may offer to save you money by doing a job "under the table" in order to avoid taxation, but not having the proper paperwork, contracts and receipts can lead to problems later. Even if a dishonest or unprofessional home renovator does complete the work, they will cut corners, use inferior materials and work shoddily. I have investigated cases where renovators have ripped off homeowners for hundreds to as much as $80,000.

Word of mouth is your best bet to find a good contractor because if a friend or family member has had a good experience with them, chances are you will, too. If you really can't find anyone on your own, check with the local building supply store to see if they can recommend someone reputable. Avoid contractors who come to your door or drop off flyers in your mailbox. And make sure you can get a hold of your contractor if yoou need to. When things are going well, your calls to a cellphone or pager will be returned, but when there is a problem they may disappear. Knowing their physical address can help, so you can track them down if things go wrong.

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Excerpted from The Smart Canadian's Guide to Building Wealth by Pat Foran. Copyright 2006 by Pat Foran. Excerpted with permission by John Wiley & Sons Canada, Ltd. All rights reserved. No part of this excerpt may be reproduced without permission in writing from the publisher.