4 Ways to Avoid Basement Renovation Scams
Home improvement, repairs, and renovations are always a significant investment and a basement renovation can be one of the least expensive ways to add more space to your home.
However, this kind of major renovation can be an inviting target for fraudsters who are planning on swindling homeowners off their money.
“Renovations for a home are not something to be taken lightly. One would not just hire anyone to remodel their kitchen or bathroom, so why not take the same care when hiring a team to renovate a basement,” said Lewis Cowie, a representative of Corefront in a report.
Hiring the best Toronto general contractor who is highly skilled in basement building products and has expert knowledge about foundation issues—specifically the challenge of preventing moisture from seeping in—would guarantee a successful renovation.However, while there are honest, hardworking professionals, there also exist those whose aim is to swindle people.
“We just want people to know that research is vital when it comes to putting money into a home,” says Cowie. “It is important that homeowners know how to spot and avoid certain scams that could cost them money.”
Here are some common scams to look out for when hiring a contractor to renovate your basement:
1. Asking for payment upfront
This is the most common trick used by renovation scammers, according to the Better Business Bureau. While a reasonable down payment is part of the process, but an excessive down payment, particularly one that exceeds a third of the total cost, is a clear sign that they may elope with your money.
In some states, down payments are limited by law, so it’s important to check your local regulations. A report by Angie’s Listreveals that about 75% of home improvement professionals are willing to negotiate down payments, which could be an advantage should you need to hire a different service.
Remember, if mandatory,never pay more than $1,000 or 10% of the job total upfront—whichever one is less.
2. Avoiding permits
This should always be a major red flag. Any contractor who doesn’t want to obtain permits is most likely unlicensed and wants to cut other corners by avoiding the prospect of the authorities taking a close look at their work.
Most scammers might try to convince homeowners that avoiding permits would save them a few bucks, but in reality, you’d be left to pay a heavier price should the contractor turn out to be a scam. Not having a permit means they are not only unaccountable for the work, but unpermitted renovation can lead to challenges should you try to sell the house in the future.
Also, by law, you are required to get a building permit for any significant construction project. Doing this allows building officials to visit the property periodically to confirm that the renovations meet safety codes.
Therefore, always ensure that the contractor obtains a building permit as it sieves out unlicensed contractors, giving you the added protection of an independent assessment of the work.
3. Avoiding contractual agreements
Before, hiring any contractor, it is necessary to alwaysput it in writing as a written contract protects both you and the contractor for very legitimate reasons.
Ensure that the contract contains a dated schedule of work, payment terms, procedures for changes, cost breakdowns, and proof of licensure, bonding, and insurance. Also, your contractor is responsible for providing additional paperwork to back up the contract.
Having a written contract is the strongest legal protection you could have should anything go wrong.
4. Excessive pressure into making a hasty decision
Legitimate contractors do not need to employ high-pressure sales tactics, similar to someone trying to sell you cheap products, just to get you to work with them.
Carrying out a home repair—or basement renovation in this case—doesn’t come cheap as it is a serious investment. Therefore, a good contractor would understand that it’s not a decision that can be made hastily.
Even in a legitimate emergency scenario where your contractor will try to convince you about the importance of making immediate repairs, they still won’t hold you hostage using a limited price offer just to get you to agree immediately.
Any contractor who is pressuring you into making a hasty renovation decision is most likely a fraudster.