Avoid Getting Caught in Renovation Scams

Most of us, when we think of being ripped off by a supposedly legitimate company think about Internet or telemarketing scams that offer big pay for stuffing envelopes or exotic travel in return for some time spent with a high-pressure time-share salesman.

Those are the prevalent scams in our market, but the home renovation industry is another place where consumers can be taken.
Tim Hudak, Ontario’s minister of consumer business services, was in Ottawa recently to explain the problem, share some tips on getting good service and explain details of the province’s “consumer protection for the 21st century” legislation.
The home renovation industry is huge. It employs 250,00 people across the province, and injects $25 billion into the economy. An average of $9 billion is spent annually on home renovations in the province, with the average homeowner spending $12,000 per job.
Driving home his points in a simplistic way, the minister had his colleague, Energy Minister John Baird, use an erasable marker to check off the listed tips as he read them. The two then stepped outside the Westboro renovation project from which they delivered their message, and armed with hammers, they smashed a glass sign the said “Scams.”
“We’re smashing scams in the province of Ontario,” Mr. Hudak said with a laugh. The legislation doubles the fines for consumer scammers and imposes a rule that says final home renovation and repair bills must come within 10 percent of the estimate. It also includes a 10-day cooling-off period during which consumers can give more thought to jobs they agreed to under high-pressure sales. Under the law, if they signed an agreement worth more than $50 in their home, they have 10 days to cancel it.
To cancel, they simply send a letter to the company. The onus is on the consumer to prove the cancellation letter was received so it’s a good idea to send it by registered mail, e-mail or fax and request that delivery be confirmed.
Further,the legislation sets out a 30-day delivery rule that means all goods and services must be completed with-in a month of the signed contract date.
“Most home renovators care about their market. However, sadly, there are scam artists out there who target volatile people and take advantage of them, particularly seniors,” Mr. Hudak said. “Scams hurt consumers and the reputation of the home building industry.”
He said home repair rates third on the list of complaints his ministry receives. Last year, they answered 2,000 calls from concerned home owners and processed 250 complaints.
One consumer had saved up a large sum so he could renovate the basement in his parents’ home to make a separate dwelling for him and his family. He gave the contractor thousands of dollarsup front, but the contractor skipped out on the job. The consumer got in touch with the ministry, which intervened and got $11,200 in restitution for him.
The Better Business Bureau of Ottawa had a complaint about a paving company going door-to-door in Ottawa,using the BBB logo on its literature. A savvy consumer, thinking the association didn’t ring true, called the local BBB and reported this. The paving company wasn’t a member and, once the BBB officials tracked the owner down on their cell phones, they ordered the pavers to take the logo off their material.
Diane Iadeuca, executive director of the BBB of Eastern Ontario and the Outaouais, said this wasn’t a clear case of a scam, but the company had misrepresented itself.
She’s also seen cases where home repair companies have done shoddy landscaping and hadn’t adhered the bylaw obligations. One customer had stairs built, but the builder didn’t follow bylaws that require railings for more then a couple of steps.
“The contractor refused to do it so we got involved,” she said. “We offered to go to mediation. Now it’s in a third-party’s hands.”
To avoid getting in such a mess, Mr. Hudak referred to his handy tip list. Above all, consumers need to deal with companies they can trust. The ministry recommends getting referrals from friends and family and then asking the companies for references. Don’t just read the references, only. You should actually call them to make sure they were satisfied with the work.
Consumers should always get a written estimate for the work and hold the company to it. If they ask for money up front, be suspicious and don’t give more than a 10 percent deposit. Before you sign the contract and the contractor begins the work, make sure all tasks are clearly spelled out so there’s no room for interpretations.
In addition, consumers must educate themselves about the products they’re buying. Then, they should shop around, comparing prices, guaranties, warranties and agreements.
The unfortunates who are already in a bind can call the ministry of consumer and business services on week-days at 1-800-889-9768. The ministry, like the Better Business Bureau, mediates written complaints.

Attributed to Jennifer Campbell. This article appeared in the Ottawa Citizen on Saturday, August 9, 2003.

Home owner’s Checklist
(From the Ontario Renovators’ Council)

q Arrange start/finish dates, and agree upon payment schedules
q Arrange for financing
q Carefully review the change order process (additions or deletions to the contract.)
q Choose materials and finishes
q Discuss and agree upon quality of workmanship
q Identify and obtain any necessary permits or inspections
q Prepare for any inconveniences or disruptions the project may cause (both to homeowners and neighbors.)
q Clear work areas of any furniture or obstacles
q Make arrangements for location of garbage bin (if applicable)
q Arrange for parking/delivery/safe storage areas
q Designate one member of the household as the liaison
q Review and sign the contract