Your home: real estate

Avoid contractor rip-offs

Remodeling spending is expected to grow next year – and so, too, will the likely number of complaints. Follow these tips to dodge unscrupulous contractors and get the work you paid for.

By Elizabeth Gehrman
December 5, 2010

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Ray and Carla Di Ciaccio loved the location of their 1949 Attleboro ranch but wanted to give each of their four teenage boys his own room, create an office, and expand the kitchen. So they had an architect draw up a plan that would add 2,100 square feet, more than doubling the size of the house. Ray, a computer consultant, got several bids, met with each of the contractors, and checked their references before deciding on one. “On a personal level, we liked the guy,” he says. “To this day, despite what happened, we think deep down inside he’s a good guy.”

You know what comes next: At the start, in June 2006, the work was going like gangbusters. “All of a sudden,” Ray recalls, “within a day or two, boom, you’ve got a structure.” But after several weeks, the crew dropped down from eight or 10 men coming every day to three or four. “By late August, it was down to two guys,” Ray says, though there was still much to be done. The contractor said he was having financial problems and even showed Ray the shut-off notices for his phone and electric service. At first, Ray and Carla were understanding, but eventually their patience reached its limit. The couple, who didn’t have time-based deadlines in their contract, kept calling and e-mailing the contractor, begging him to finish the project, to no avail. In the end, they paid for 90 percent of the $125,000 job but estimate only 70 to 80 percent of the work was completed. Ray hired a lawyer, who tried to put a lien on the contractor’s house, only to find it had been foreclosed on. The homeowner called the state’s Office of Consumer Affairs and Business Regulation, which in February of this year awarded the couple $10,000 from a fund set up for ripped-off homeowners.

With the housing market in disarray, many more homeowners are expected to start following the Di Ciaccios’ lead and fix up their existing homes rather than move into new ones. Research from Harvard’s Joint Center for Housing Studies indicates that after a three-year decline, “substantive growth” seems likely in remodeling spending next year.

Unfortunately, horror stories like the Di Ciaccios’ are likely to increase along with the number of jobs being done. In fact, according to Consumer Affairs, calls about contractors topped the list of consumer complaints in 2009, the most recent year in which statistics were compiled.

Here are a few tips to keep you from being one of those dialing the phone next year.

Research your project

“It doesn’t matter whether the project’s big or small,” says Cheryl Reed, communications director for Angie’s List, a member-based consumer review website. “You need to do your research.” As with any purchase, it’s to your benefit to learn what you’re buying before you even start shopping. Pick up a few renovation magazines and spend some time searching the Web; this can give you an idea of price, the kind of materials that should be used, and the order in which each step in the process should be done. Then, if your contractor starts painting before patching holes in the wall, for example, you’ll be able to call him or her on it before the work goes too far. Consider the finishes you’d prefer in advance; it can help your contractor devise an accurate price estimate for the job and keep you from trying his or her patience with endless hemming and hawing when it comes time to make a decision.

Go to your city or town’s building inspection department and ask as many questions as you’d like. “A lot of homeowners come in and say they were heavily involved with Boston Inspectional Services after the fact,” says Steven Zuilkowski, a hearing officer for the Massachusetts Consumer Affairs’ home improvement contractor program, “but it wouldn’t hurt to be involved with them, or your local equivalent, beforehand. It’s a good way to educate yourself quickly about what needs to be done.”

The Boston Building Materials Co-op and its affiliate, the Building Materials Resource Center (617-442-8917,, both in Roxbury, jointly offer a class called Working With a Contractor, which is scheduled for this spring. You can learn the basics, talk to an expert and to other homeowners, and get handouts such as sample contracts.

Find the right contractor

It’s always best to get references from a friend or neighbor – someone you trust who has worked with this person before. There are also services that provide suggestions: Angie’s List (888-888-5478, allows you to see what past customers have to say about a contractor or other service and gives you access to a complaint resolution team, which can intervene before things get too ugly. Service Magic (877-800-3177, can help you find virtually any kind of contractor who works in your area; the company screens the people it recommends, and the website offers customer reviews.

Don’t use a contractor who comes knocking on your door offering unsolicited help for a low price if you pay in cash. This is often a scam.

Ask at least three contractors for bids. Cass Benson, a Provincetown developer, notes that the process not only gives you an idea of high- and low-end prices, but is “also a good indication of how promptly they’re going to do your job. If they can’t get it together to give you a bid, that’s a problem.” You don’t have to shy away from the lowest bid, assuming that contractor will provide lesser-quality work. “One contractor can do a job for $100 a square foot and another will say $200 to $300 a square foot,” says Benson. “Is the electrical going to be any different? No. You’ve got building inspectors checking quality, so everybody’s going to do pretty much the same quality. You might have some discrepancy in the finish workmanship, but that’s something you can find out by going and checking how the person does the finish job.”

Once you’ve zeroed in on one contractor, request at least three previous clients from him or her. Even better than calling these homeowners is to go to their houses and see what kind of job was done. Ask whether the contractor showed up on time, answered phone calls, responded to e-mails. Inquire whether the homeowner felt comfortable leaving the person alone in the house. And, finally, ask how the contractor handled any problems that came up and whether the homeowner overheard any serious grumbling about the boss among subcontractors – did he fail to pay them or put them in danger in any way?

The next step is to ask for crucial paperwork:

1. For many projects, your contractor should have a state-issued construction supervisor’s license; to find out if your project requires one, go to and search for “construction supervisor.” Licensed contractors can pull permits and are generally more careful about sticking to building codes. But more important, they want to protect their livelihood and know that the state can yank their license if wrongdoing is shown. That’s more of a threat to them than the idea of being hauled into civil court by individual homeowners.

Separate licenses are required for asbestos and lead removal, plumbing and gas fitting, and electric, so if your project involves that work, ask for proof of those licenses. You can make sure your contractor has an up-to-date license by searching

2. Ask your contractor if he or she has a home-improvement contractor registration number with Consumer Affairs. Registered businesses are required to pay annually into a guaranty fund; the pooled money is then given to homeowners, like Ray and Carla Di Ciaccio, who can prove their case against unscrupulous or incompetent contractors. Since the fund started in 1992, an estimated $7.5 million has been paid out. Find out more about the fund and check any previous arbitrations under a contractor’s name or registration number by searching “guaranty fund” at

3. Check that your contractor has liability insurance and, unless he or she will be the only one on your job site for the duration of the project, workers’ compensation. “If I get injured, [workers’ compensation] will cover me,” says Kim Toomey, site supervisor for Sleeping Dog Properties, a developer in Boston, “and [liability insurance] will cover you if I break or damage anything in your home. If I come into your house and spill paint on the carpet, say, you still have to pay me because my services have been rendered already. Some guys will say they’ll pay you or replace it, and they never do.” Ask your contractor to provide you with a certificate of insurance before he or she starts even the smallest job.

The final element in selecting a contractor is simple chemistry. Don’t be shy about asking your contractor how he has handled difficult situations. “It’s a red flag if he demeans a prior client or says things that are offensive to you or make you question whether you want to hire him,” says Reed of Angie’s List. Go with your gut, experts say, and walk away if you feel something’s amiss.

Spell out the job before it starts

Once you find the right person for your project, there are a few things you need to take care of before the first nail is ever driven. The most important one is agreeing on a detailed contract. “It doesn’t have to be fancy,” says Matthew St. Onge, executive director of the Building Materials Resource Center and president of the Boston Building Materials Co-op. “But the scope of the work needs to be in writing, so both parties understand what the expectations are and there are no gray areas – no ‘You said,’ ‘I said.’ ”

There are several elements every good contract needs, from a clear delineation of the scope of the work to the start and end dates. (For a complete checklist, search for “required contract terms” at An important part of your contract lays out the payment schedule. A contractor can ask for up to a third of the total price of the job as a deposit; never give him or her more than that. As much as another third can be paid after a certain amount of work – also specified in the contract – is done, and the balance is paid after the building inspector has signed off on the work and the project is completed to your satisfaction. Make sure to stick with this schedule, no matter how much you like your contractor or how much he or she cajoles or intimidates you to pay before the job is done.

“This is a lesson to be learned,” says Ray Di Ciaccio. “This is where I blew it.” Di Ciaccio and his contractor drew up an excellent contract, with the work divided into more than a dozen separate jobs and a corresponding payment schedule. “In a lot of cases, the tasks seemed to get 70 or 80 percent done,” says Di Ciaccio. “I should have waited for the porch to be 100 percent done before paying him the next portion and letting him move on to the next part of the job. I ended up with a lot of things that were 70 or 80 percent complete.”

If you hold back only a part of the final payment, says Toomey of Sleeping Dog Properties, it might not be any better than paying the whole thing. “The contractor will probably look at it and say, ‘It’s only $500. She’s a pain in the butt. I’m not going back to finish.’ ”

Built into every contract should be a “permit notice,” which points out that if you pull your own permit for the work rather than requiring the contractor to do it, you will not be eligible for payment from the Guaranty Fund should things go south. Another way of saying this is “do not sign a homeowner waiver,” according to Lisa Timberlake, spokeswoman for Boston Inspectional Services. “That gives the homeowner full responsibility for what’s happening on the property, and that’s a mistake and a half.”

Another matter to work out in advance is who will purchase the supplies, especially ones that involve matters of taste, like kitchen cabinets or light fixtures. If your contractor is doing the buying and you would prefer higher-end finishes, make sure the contract reflects that. Give your contractor details such as the model number or SKU of the products you’re looking for, or pictures of the style you want. Also, spell out what you don’t want. “Say you absolutely don’t want brass fixtures or vinyl anything, for example,” says Reed. “If there’s something you don’t want in your house, say that.” If he purchases the vanity or faucet or light fixture, a contractor might mark it up by as much as 20 percent, so homeowners sometimes want to do the shopping themselves to save money. But contractors don’t warranty materials they don’t buy. “If you pick up a faucet at Home Depot or Lowe’s and it cracks within a week after it’s installed,” says Toomey, “the contractor’s going to charge you to come out and put in a new one. But if he picks it up at a plumbing supply company and it’s no good, he probably won’t charge you twice if he has to come back and fix it.”

“Change orders,” or work that’s outside the originally agreed-upon job, should also be discussed in advance to determine how they will be dealt with. Your contractor might, for example, discover a concealed condition, like broken ceiling joists, that will require extra work. Or you may want to add some tasks to the project. Talk to your contractor about how these extras will be handled; the best approach is to attach an addendum to the contract that spells out the work to be done and the payment schedule. “The homeowner will frequently say, ‘Oh, since you’re here, can you build some shelves over my washer and dryer?’ ”

says St. Onge. “If you don’t execute a change order, what typically happens is the work gets done, the contractor submits a bill, and the homeowner says, ‘If I knew it was going to cost that much, I wouldn’t have asked you to do it.’ ”

Finally, before work begins, sit down with your contractor and make sure everyone’s expectations are clear. “Try to leave nothing to chance,” says St. Onge. “Can they use your bathroom? Can they put things in the fridge for lunch? Are smokers going to be on the property? Are they planning to bring a dog with them? All those things.” Another matter to cover at this meeting: which person in a two-partner household will manage the contractor. Reed recalls a case on Angie’s List in which the wife said something to the contractor’s crew that made them think the driveway should curve a certain way, and when the husband, who had previously given different instructions, got home and saw it, he was furious. “The crew shouldn’t have done it without talking with the contractor,” she says, “who probably would have checked with the husband.”

Know how to tackle problems

Often problems arise when the contractor does something that seemed perfectly logical to him – putting a towel bar 6 feet off the floor, for example – but that the homeowner could never have anticipated he’d do. These should prove to be a small wrinkle as long as you and your contractor are still communicating well, but once things start to break down, it’s best to bring up any issues by e-mail rather than on the phone or in person. A paper trail can help if a dispute grows in scope.

If you decide you must take action against a contractor, you can send a “demand letter,” also known as a 93A letter, after the provision of Massachusetts law that describes it. The letter should detail the events that took place or the work that wasn’t done, explain what you think you are owed, and tell the contractor he has 30 days to address your grievances. (There’s a sample letter on If the contractor doesn’t make it right or simply doesn’t respond to the letter, you can then file a suit against him or seek mediation, which is offered by the Consumer Affairs department. And, like the Di Ciaccios, if your case has merit, you just might get some satisfaction.