Watching all the weather disasters on the East Coast just reminded me of the times we have seen disaster here or nearby. Properties are destroyed or really damaged and need construction. For some reason, there are people that like to prey on these types of situations. Here are a few things to be aware of to protect you. Don’t be afraid to ask questions up front.
Times are tough these days and everyone has to protect themselves. We hear too many times that contractors are taking money up front and not doing the job or taking money from the homeowner and not paying their subcontractors or paying for the materials. This really happens in disaster areas, but it can happen in our own backyard. So it is very important to know who you are doing business with and how they operate. Here are a few things to think about and do:
If you are in a disaster area, your insurance (if you have it) will need to be called first. They will send out an adjuster to evaluate the damages and normally tell you have much you have in coverage to start your repairs or rebuild.
If you are hiring a contractor and writing the checks, how many of you wondered if they are paying their bills or if they will come do the job? In this trying time, people are not always honest. How do you protect yourself and your investment? First off, investigate their references before you write that first check. If you are going through a lending institute, both you and the builder can establish a separate account that requires both signatures (yours and theirs). If you are paying for budget items, make sure you get the receipts or copies. Most independent builders work off draws, meaning that at certain points you will need to pay for work performed or materials to be ordered. The last payment should only be made when ALL the work has been performed and you are satisfied with the job. There should be a final inspection prior to the completion of a home or building. Once you are satisfied with the work and have made that last payment, ask the Builder for a Contractor’s Affidavit stating they have paid all bills. This document is a sworn statement, signed and notarized. Within this document, it states all labor, materials used, etc., have been paid and satisfied and that no security interest on such property exist. If there is an outstanding amount due, the party and amount should be noted within this document. This document should reflect: You as the owner, with an address, real property description, statement, any outstanding amounts, signed by builder, and notarized. Just another step in protecting yourself and what is yours.
You must protect your investments. If the bills are not paid, liens can be put against your home or project, so it is very important to follow your job the whole way. Your contractor should have given you a detailed outline of the job in the beginning for you to follow. And at the end, ask for that Contractor’s Affidavit.
Whether we are in the disaster area or not, you need to protect yourself and follow some of these guidelines. They are not guaranteed, but they might just help out some.
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