Design Lesson

Avoid home renovation rip-offs

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Avoid home renovation rip-offs Author: Style At Home

Design Lesson

Avoid home renovation rip-offs

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Share your renovation experiences with other readers in our forums.

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.

Read our 6 tips to reduce the stress of home renovations.

It's always a good idea to get at least three quotes on any major job. Work to be done should be detailed so it's not open to interpretation. If you want a toilet, you can pay $80 or $4,000 for one. If you don't make it clear which one you want, you will get the cheapest one on the market. One way to keep track of prices is to buy the items yourself, although a contractor may get a special rate on materials. For example, trees you would buy from a nursery may cost you $149, but contractors may get them for $79. You can use this information to negotiate an even better deal. If you buy the drywall and plumbing materials yourself, you will have them in your possession if a renovator quits before the project is complete. You can also write a cheque directly to a building supplies store and have the materials delivered straight to your home.

Another good idea is to never pay too much money up front. A contractor may say they need a 30 per cent deposit to secure them and then another 30 per cent to begin. This means you have given them half the money before they've done anything! If you're going to get lousy work, that's when it will begin and when you complain they just won't come back. If a contractor is too eager to get money before starting a job, this may be a clear sign they're not legitimate. Even a reputable contractor may require some money up front to buy materials, but this amount should not be excessive.

One major problem with renovations occurs when people don't have a clear plan set out for their renovations. There should be a contract that spells out the details.

• How much will labour cost?
• How much will materials cost?
• Is the contractor responsible for the debris left behind? Will they transport it to the dump or will you?
• What is the warranty or guarantee?
• Is the quote a firm price or could it change halfway through the project?

All your plans and instructions should be put in writing because verbal promises mean nothing when a problem arises.

Most bad renovators are knowledgeable as to how the law works, so when you say you will call the police they don't care. If a renovator takes $35,000 from you and does absolutely no work, it's fraud; however, if they begin the job and then quit, it's a civil matter for the courts. The police won't get involved, you may need a lawyer and even if you win your case you're still not assured of getting your money back. That's why it's so important to choose the right contractor.

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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.

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Design Lesson

Avoid home renovation rip-offs