This is Part 1 of a three-part guide on Rebuilding After the California Wildfires. You can jump to Part 2: First Steps in Your Insurance Claim or Part 3: Getting A Fair Estimate to Rebuild or Repair Your House.
Contents of this post:
1. The Risks of Post-Disaster Contractor Fraud
In the aftermath of natural disasters like the fires in the North Bay, the conditions are ripe for all types of fraud, scams, and price-gouging. It’s hard to believe that there are individuals who would take advantage of people down on their luck, but history shows that the re-victimization of survivors is not uncommon.
After Hurricane Katrina in 2005, scams exploiting victims were so rampant that the Justice Department established the National Center for Disaster Fraud (NCDF), and federal prosecutors have charged over 1,300 disaster fraud cases related to Hurricane Katrina alone. Weeks after Hurricane Harvey, the Washington Post reported that the Texas attorney general’s office received more than 3,200 complaints about scams, and the number of fraud reports filed to the NCDF jumped from 79 the week before Harvey to 425 the following week.
Among the many types of scams that emerge in the wake of a disaster is contractor fraud, where unlicensed individuals or businesses will solicit work from homeowners whose properties have suffered damages. Rather than finishing the agreed-upon repairs, the solicitor takes the payment and either makes shoddy, incomplete repairs or disappears altogether.
2. Tips for Avoiding Contractor Scams
- Don’t rush into signing contracts and avoid making major financial decisions immediately after.
- Never give full upfront payments for work. The California Contractors License Board limits upfront payments to 10% of the contract or $1,000, whichever is less. Anyone asking for more or asking to be paid in cash is a red flag.
- Beware of contractors from out of town. While non-local contractors will be necessary to meet the demand for rebuilding in the community, be wary of anyone who arrives unannounced and is overly eager for your business.
- Take the time to vet your contractor. There are many resources that can help you check a contractor’s reliability, including BuildZoom’s free background check service.
3. Hiring A Trustworthy Contractor
Your contractor should first and foremost be licensed and registered with the Contractors State License Board (CSLB). If you live in California, you can check the contractor’s license number and verify their status at www.cslb.ca.gov. The Better Business Bureau will have a record of any complaints submitted by past clients. You can also check a contractor’s licensing status, past work history, and reviews on their BuildZoom profile page. We’ve already done the research for you and have our top ranked contractors on our city listing pages below:
Santa Rosa | Napa | Sonoma
Any contractor you would like to get a quote from should be able to provide you with the following documentation:
- Business License
- Contractor License
- Worker’s Compensation Insurance
- General Liability Insurance
- Good References
Are They The Right Fit?
A contractor may have great reviews and a clean record, but are they really the right fit for your project? It’s a good idea to check that they have past experience with the types of work you need done, and that your project budgets are generally aligned. The person who built your neighbor’s front door, for example, may not be the best person to design and build your custom home.
Getting Bids and Negotiating Contract Terms
The industry standard for hiring a contractor is to get three bids before making a decision. In order to accurately evaluate the best bid, you need a breakdown of materials, labor, and unit costs so you’re not comparing apples to oranges. Every contracting business operates their project accounting differently, and you will inevitably see some variance in individual bids. But if you’re getting widely different estimates, then you’re probably not effectively communicating what you need. Decide on as many selections before and be as explicit as possible when you solicit a bid, so the contractor can provide you with a more accurate estimate.
A detailed bid also helps you identify areas you may want to adjust to meet your budget, and will be useful if you eliminate or add an item later on in the project. Moreover, asking for the details encourages the contractor to think deeper about planning for the project, and will result in fewer unwelcome surprises or add-on costs down the road.
Before you sign any agreement, make sure you are happy with the contract terms. They should cover details such as:
- The foreman or project manager who will manage the team and be your go-to person
- A general schedule including start and end dates
- Payment terms and any upfront costs
- General Conditions on an estimate, including permit costs
- Conflict resolution processes and arbitration clauses
- Change orders if there are major changes to the Statement of Work
- Allowances for undecided selections
4. Using BuildZoom’s Service
At BuildZoom, we have data on over 200,000 contractors within California state and approximately 100,000 contractors and specialists in the affected and surrounding areas in northern California. When entire communities have suffered damages, contractor shortages can severely delay rebuilding efforts, as recently reported in SF Gate.
Tom Carreiro, president of Santa Rosa’s Carreiro Builders, said the phone started ringing Monday with clients eager to be first in line when the rebuilding starts.“The fire is not even out yet and people are calling,” said Carreiro. “They know it’s going to be really hard to find a good contractor.”
We are here to help you find the best contractor by calling, vetting, confirming licenses or running a background- all for free. Call (707) 617-1004 or tell us about your project here and we’ll help you find the right people for your home restoration.
You can also find information on any licensed contractor in California by searching their name or license number on our website.
Additional Resources:
Read more about Insurance Adjuster and Contractor Fraud
Economist Article on Disaster Fraud
NY Times Article on Rebuilding Your Home After A Disaster
See United Policyholder’s Guide to the Reconstruction Process
Leave a Reply