State reminds homeowners to do their homework before hiring a contractor
The Minnesota Department of Labor and Industry (DLI) reminds homeowners to do their homework before hiring a building contractor after a storm … or anytime.
“There are many companies in Minnesota that specialize in repairing roofs, siding and windows resulting from storm damage. Most of these contractors are reputable and licensed,” said Ken Peterson, DLI commissioner. “However, after most storms unscrupulous operators try to take advantage of storm victims.”
After neighborhoods experience a wind or hail storm, homeowners may find salespeople for these companies going door-to-door soliciting repair work.
Contractors may not pay insurance deductibles
In many cases, the contractor’s salespeople explain they will work with the homeowners’ insurance carrier to get a good settlement so the homeowner will not have to pay any more than the amount of their deductible. They may even offer to pay their deductible for the repairs. However, contractors may not offer to pay the homeowners deductible. State law prohibits contractors from paying deductibles or offering any compensation as an incentive to hire them to perform storm repair services.
‘Authorization forms’ are contracts
A salesperson may ask a homeowner to sign an “authorization form” to allow the salesperson to contact the homeowners’ insurance company or to conduct an inspection of the home to look for storm damage. In reality, this document is actually a formal contract that when signed, obligates the homeowner to allow the contractor to perform any repair work that your insurance company agrees to cover, for a price that the contractor and the insurance company agree on.
Homeowners should not sign anything until they have read it carefully and understand the document. In almost every case, the document a contractor asks the homeowner to sign is a legally binding contract, regardless of what the salesperson says.
Check contractor’s license and history
Before a homeowner signs a contract, call DLI at (651) 284-5069 or go online at DLI’s Licensing/Certificate (https://secure.doli.state.mn.us/lookup/licensing.aspx) search to verify the contractor is licensed and to learn if the contractor has a history of disciplinary action.
Homeowners should also check with the Better Business Bureau (http://minnesota.app.bbb.org/search) and check for lawsuits or judgments (http://pa.courts.state.mn.us/default.aspx) involving the company or its owners.
Among many categories of specialized contractors, DLI also licenses residential builders, remodelers and roofers. To work in Minnesota, these professionals must be licensed. If a homeowner hires an unlicensed contractor, they will not have access to the Contractor Recovery Fund (www.dli.mn.gov/CCLD/RBCRecovery.asp), which compensates consumers who have suffered a financial loss and obtained a civil judgment against a licensed contractor due to the contractor’s defective work, failure to perform work, or fraudulent, deceptive or dishonest practices.
Quick tips
Before hiring a contractor, DLI suggests the following:
- ask for the contractor’s license number and contact DLI at (651) 284-5069 or 1-800-342-5354 to verify the builder is currently licensed and to find out if they have a disciplinary history. The status of a contractor’s license can also be verified by using DLI’s Licensing/Certificate search.
- a contractor registration is NOT a license “ do not hire a contractor whose license number does not begin with the letters ‘BC’ ‘CR’ or ‘RR.’Â Contractor registration numbers being with ‘IR.’
- ask the contractor how long and where they have been in business.
- ask for references and check with former customers to see if they were satisfied with the work.
- ask for a Minnesota business address other than a post office box.
- ask for a local phone number where the contractor can be reached during normal business hours.
- check the contractor’s litigation history on the state court system’s website athttp://pa.courts.state.mn.us/default.aspx.
Avoid contractors that:
- arrive in an unmarked truck or van;
- ask you to sign an estimate or authorization before you have decided to actually hire them;
- appear to be willing to do the job at an unusually low price;
- offer to pay your deductible or offer discounts or other compensation for hiring them;
- provide only a post office box for their business address;
- require full or substantial payment before work begins;
- refuse to provide a written estimate or contract;
- refuse to provide a license number issued by the state of Minnesota;
- refuse to provide references;
- show up at your door unsolicited; or
- use high-pressure sales tactics.
Before you sign a contract, make sure it includes:
- a detailed summary of the work to be done (unless the contract is conditioned on insurance approval);
- a description of materials;
- the total contract price or how the price will be calculated; and
- specific timelines and provisions explaining what will happen if the contractor fails to meet contractual deadlines.
- Regulation is in place to protect homeowners entering into contracts with roofers. With certain restrictions, homeowners are allowed to cancel a roofing contract if their insurance company denies the claim.
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