Attorney General Kamala D. Harris Issues Consumer Alert on Home Improvement Scams

SAN FRANCISCO – Attorney General Kamala D. Harris today issued a consumer alert to Californians regarding home improvement scams.  As summer approaches, many consumers may consider home remodeling, repair, and maintenance projects.  Unfortunately, not all contractors are legitimate and the unwary may fall victim to home improvement scams, which peak during the summer.  Consumers should be aware of their rights under California laws governing home improvement contracts.  This consumer alert provides some helpful tips for selecting reputable contractors, and provides an overview of homeowners’ rights in the event they encounter a home improvement scam.
                

WHAT TO LOOK OUT FOR

The Attorney General offers California consumers the following tips to help them select reputable contractors, and to understand their legal rights:

When selecting a contractor, be wary of unsolicited visits by contractors who claim to just “happen to be in the neighborhood” working on a nearby property or who promise large discounts because they have extra materials left over from other jobs.  Often, these contractors are not licensed, take large amounts of money upfront, and then fail to finish a job or do any work at all.

• Instead, seek out contractors recommended by trusted friends or family members.  It is wise to shop around, get at least three written quotes, and call all references.

• Once you have selected a contractor, check to make sure they are licensed.  You can find this information on the Contractors State License Board’s (CSLB) website or www.CheckTheLicenseFirst.com.   You can also check the Better Business Bureau’s (BBB) websitefor any complaints about the contractor.  A contractor’s license is required for all jobs except minor work totaling less than $500; this minor work cannot be part of a larger project.  (Bus. & Prof. Code section 7048.)

• If you feel pressured into signing a home improvement contract, California’s Home Solicitation Sales Act (Bus. & Prof. Code sections 1688 to 1693) allows you to cancel the contract within three days.  However, be aware that this law does not apply to contracts for emergency repairs or to contracts signed in the contractor’s place of business.

• Always insist on a written contract.  Under California law, all home improvement contracts over $500 must be in writing.  California also requires contract terms to be legible, easy to understand, and to inform you of the right to cancel the contract.  The contract must also require any change orders to be in writing and must include a warning regarding mechanic’s liens.  (Bus. & Prof. Code section 7159.)

• Make sure that the contractor carries the appropriate insurance.  Contractors should have personal liability, worker’s compensation (if they have employees), and property insurance.  Confirm that insurance is addressed in the contract and ask for copies of insurance certificates if you have any concerns.

• Make sure that the contract clearly states that the contractor is responsible for obtaining all necessary permits for the work and that the contractor will comply with all local permitting, building, and zoning laws.

• Never pay large amounts of money upfront.  In fact, California law generally prohibits contractors from requiring down payments of more than $1,000 or 10% of the total contract price, whichever is less.  (Bus. & Prof. Code section 7159.)  Don’t pay the full contract price until the job is complete and you are satisfied with the work.

• In the event that you have a dispute with your contractor, you have four years to file a complaint with the CSLB.  The CSLB administers two arbitration programs for claims against licensed contractors: a mandatory program for claims of $12,5000 or less, and a voluntary program for claims between $12,500 and $50,000.  More information about the complaint process can be found on CSLB’s website. 

HELPFUL RESOURCES

To learn more about home improvement scams in general, visit the Federal Trade Commission’s webpage on home improvement scams.

The BBB has also published an article with other helpful tips, “Scam Alert – This Home Improvement Deal is Really a Scam: Summer Contracting Scam Tricks Homeowners.”

WHAT TO DO IF YOU HAVE A PROBLEM WITH A HOME IMPROVEMENT CONTRACTOR
 

If you are unable to resolve a dispute with a home improvement contractor, CSLB provides information on how to file a consumer complaint and its arbitration program:

The Better Business Bureau (BBB) also provides information on how to file consumer complaints about a particular company..

Finally, the California Department of Justice protects the rights of consumers and collects complaints on scams in order to identify patterns of wrongful activity.  To submit a complaint to the California Department of Justice regarding a home improvement scam, please use one of the following complaint forms:

English: Consumer Complaint Against a Business or Company (English).  

En Español: Consumer Complaint Against a Business or Company (Spanish)

中文: Consumer Complaint Against a Business or Company (Chinese) 

Tiếng Việt: Consumer Complaint Against a Business or Company (Vietnamese)