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DES PLAINES, Illinois, Mar. 28, 2008 – May is National
Home Improvement Month. During times of a softer economy
paired with the approach of warmer weather, the National
Association of the Remodeling Industry (NARI) wants to
remind homeowners to beware of unscrupulous people
posing as remodelers.
One common issue exploited homeowners have run into is
having to pay both the contractor and the
subcontractors. The homeowner’s financial obligations
should only be to the contractor. Some dishonorable
contractors are collecting large, upfront payments from
residents. When the work has been completed, instead of
paying the subcontractors, the dishonest business owner
instead pays the interest on properties they have
already purchased and can only re-sell below cost. This
predictably leaves subcontractors without paychecks and
forces them to establish mechanics’ or materialmens’
liens on their customers’ properties.
The subcontractors secure payment for their work, but
this causes difficulties for homeowners, who then pay
the same fee twice for one remodeling project. Since
subcontractors have 90 days to file mechanics’ liens, it
could take months for homeowners to realize that they
have been defrauded. Residents should note that these
types of liens will pay the subcontractors before the
homeowners if occupants sell their properties.
Protect yourself
To avoid these circumstances and ensure that you only
pay the cost of a project once, NARI suggests you take
the following steps:
Be sure you hire an experienced remodeler and not a
fly-by-nighter waiting for the building industry to pick
up again.
Contact state or local licensing agencies to ensure a
contractor meets all requirements.
Check with your local NARI chapter, the government
Consumer Affairs Office or the Better Business Bureau to
ensure the absence of any adverse files on-record for
the contractor.
Ask to see a copy of the contractor’s certification of
insurance or for the name of his or her insurance agency
to verify coverage. Most states require a contractor to
carry worker’s compensation, property damage and
personal liability insurance.
Verify that the contractor’s insurance coverage meets
all the minimum requirements. If homeowners request
estimates from several different contractors, they
should confirm that they are bidding on the same scope
and quality of work. Discuss any variations in bids and
beware of any bid that is much lower than the others.
Draw up a contract before a remodeler begins work that
includes the contractor’s name, address, and phone and
license numbers, if applicable. It should also include
details about what the contractor will and will not do.
The agreement should offer a detailed list of materials
for the project, with information such as size, color,
model, brand name and product. The contract should
include approximate start and completion dates.
Study the design plans carefully. Before any work
begins, the homeowners should insist both that they
approve the plans and that the contractor identifies the
design plans in the written contract.
Known as the “Right of Recision,” federal law requires a
contractor to provide a homeowner with written notice of
the resident’s right to, without penalty, cancel a
contract within three business days of signing it,
provided it was solicited at some place other than the
contractor’s place of business or appropriate trade
premises.
Verify that you share an understanding of financial
terms with the contractor and that the contract
explicitly states them. The total price, payment
schedule and any cancellation penalty should be clear.
The contract should include a warranty covering
materials and workmanship for a minimum of one year, and
identify the warranty as either “full” or “limited.” The
contract must identify the name and address of the party
that will honor the warranty, namely the contractor,
distributor or manufacturer. Homeowners should make sure
the document specifies the time period for the warranty.
In the event of a disagreement, a binding arbitration
clause is useful. Arbitration may enable the homeowner
to resolve disputes without costly litigation.
Before signing a contract, completely review it and
confirm that you comprehend it. Consider the scope of
the project and verify that the contract includes all
requested items. If the agreement lacks mention of a
specific, discussed item, consider it excluded. Never
sign an incomplete contract, and always keep a copy of
the final document for review.
Homeowners can depend on NARI
NARI reminds all homeowners that its members must adhere
to a strict code of ethics and that there are grievance
procedures in place for members who do not. Under the
NARI code of ethics, members pledge to always provide
quality service and work and follow the high ethical
standards of the association, to only promote products
and services that are functionally and economically
sound, and consistent with objective standards of health
and safety, that any advertising or sales promotions
will be factually accurate, and any agreements or
warranties will be fair and mutually beneficial to all
parties concerned.
NARI members also agree to honor all contractual
obligations, until and unless all contractual parties
involved alter or dissolve them. They also will promptly
acknowledge and act on any customer complaints, and
refrain from any act intended to restrain trade or
suppress competition.
NARI is the only trade association dedicated solely to
the remodeling industry, and its members voluntarily
subscribe to a strict code of ethics. Consumers may wish
to search www.RemodelToday.com to find a qualified
remodeler who is a member of NARI.
Consumers can also call the NARI National hotline at
800-611-NARI and request a free copy of NARI’s brochure,
“How to Select a Remodeling Professional,” or visit
www.RemodelToday.com and click on the homeowner’s guide
for more information.
About the National Association of the Remodeling
Industry
The National
Association of the Remodeling Industry (NARI) is the
only trade association dedicated solely to the
remodeling industry. With more than 7,700 member
companies nationwide, the Association – based in Des
Plaines, Illinois – is “The Voice of the Remodeling
Industry”TM. For membership information, continuing
education opportunities in the remodeling industry, or
to find a contractor in your area, visit NARI’s Web site
at www.RemodelToday.com, or contact the national
headquarters office at (800) 611-NARI.
Source: The National Association of the Remodeling
Industry (NARI)
CONTACT: Gwen Biasi,
Director of Marketing & Communications, National
Association of the Remodeling Industry (NARI), E:
gbiasi@nari.org T:
847-298-9200
Website:
www.RemodelToday.com
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