Home Improvement Fraud FAQ's : More Topics & FAQs : Consumer Assistance Program : University of Vermont

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Home Improvement FAQs

Below you can find more information about your consumer rights around home improvement and how to avoid fraud.  If you have further questions, contact us for assistance.

How to Avoid Home Improvement Rip-Offs

The best way to avoid becoming a victim is to avoid disreputable contractors. Some warning signals of less than reputable contractors are that they:
  • Solicit door-to-door.
  • Inform you that they were passing by and noticed a problem with your home.
  • Offer you discounts for finding other customers or promise that the job will be a "demonstration."
  • Just happen to have materials left over from a previous job and can give you a really good price.
  • Only accept cash payments.
  • Pressure you to make a decision on the spot.
  • Ask you to pay for the entire job or a substantial portion of the job up front.
  • Suggest that you borrow money from a lender the contractor knows.

Selecting a Contractor - Before You Sign Checklist 

The fact that a contractor takes out a large display ad in the phone book or newspaper does not guarantee that he or she is reputable. In order to be sure you are hiring a reputable contractor, check several sources. Ask friends and neighbors who have had work done recently and were satisfied for the names of their contractors. You should then arrange an interview with each of the contractors you are considering. Here are some questions you should ask:
  • How long have you been in business? There is nothing wrong with hiring someone who is new in the business, but your contractor needs to have the skills and experience to build according to standard building code specifications.
  • How many projects like mine have you completed in the last year? Ask for a list of projects. This will help you determine whether the contractor has experience doing jobs like yours.
  • May I have a list of references? You should ask for the names and addresses of at least three recent clients. You should then call all of them and ask them questions about the contractor’s performance on their jobs.
  • Some questions you might ask include: Were you satisfied with the job? Was it completed on time? Were there cost overruns? Did workers clean up after the job was completed? Would you hire the contractor again?
  • Talk to CAP staff and check the Attorney General's complaint database for the complaint history against the business. 
  • Check the Better Business Bureau for its complaint history.
  • Keep a copy of any advertising done by the contractor. 
  • Do an internet search for the contractor and see if there is a website, either active or inactive.
  • Check the HIF Registry to see if the contractor is listed (see below). 
  • Check the Vermont Secretary of State's Corporations website to see if the contractor (unless operating in his or her own full name) has a registered tradename or is incorporated; print screens for your files.  
  • If electrical, HV/AC, gas installation, or plumbing work is part of the project, is the contractor licensed to do this work?  Link to Department of Public Safety, Fire Safety Division website here. 
  • Does your town require that a building permit be obtained for the project?  Address this responsibility in the contract. 
  • Ask whether the contractor has personal liability and property damage insurance coverage.  Obtain a copy of the insurance certificate naming you as a named insured on the policy.  Contact the insurance company to ensure that the certificate is accurate and current.  
  • Does the contractor have people working for him or her?  If yes, obtain their names and contact information if possible. Ensure that the contractor has workers' compensation insurance for any employees. You can check status online at:  Vermont Department of Labor Workers' Compensation 
  • Keep a copy of any estimate and all communications with the contractor.  
  • The contractor typically writes the contract.  But, homeowners should require that the information in the "Put it in Writing" section is included in the contract before they sign. 

Put it in Writing

Vermont law does not require home improvement contracts to be in writing.  However, it is in everyone’s best interest if all of the terms of the agreement are written. Taking some time before the job starts may save a substantial amount of time, money and frustration at a later date if things don’t work out as planned.  Here are some things the contract should include:
  • The contractor’s name, address and phone number.
  • The total price and the payment schedule for the contractor, subcontractors and suppliers.
  • The estimated start and completion dates, with a firm date for completion of the work.
  • The process for handling change orders. This is one of the most fertile areas for disputes, and should be spelled out in advance in as much detail as possible.
  • A detailed list of all materials including color, model, size and brand name. Confusion about exactly what quality of product was included in the contractor’s quoted price is another common source of disputes between homeowner and contractor.
  • Warranties on material and workmanship. The contract should specify what warranties exist and their terms, and who is responsible for honoring them—i.e., is it the contractor, the supplier or the manufacturer of the product?
  • Notice of your three day right to cancel, as described earlier.

Read Every Page Before You Sign

A common practice of fraudulent contractors is to hide important documents underneath the contract, tell you they are simply additional copies of the contract, and then have you sign them without reading them. These documents may include an agreement to give the contractor or a finance company a mortgage on your home. The consequence of signing such a document may be that if you are dissatisfied with the work and refuse to pay, the finance company could attempt to take your home from you. Never sign a document that you have not read and understood or that has blank spaces that can be filled in later.

Some contractors include a contract provision that requires arbitration of any dispute relating to the project.  Consider whether this is a provision you want to agree to.  Agreeing to arbitration means that you will have to jointly select and share the costs of an arbitrator with the contractor and that have waived your right to bring a civil lawsuit if you have suffered damages.  

A Note on Estimates

Unlike many states, Vermont does not have a law prohibiting a contractor from exceeding an estimate. In Vermont an estimate is just that—an estimate. If you want to make sure that the cost of your home improvement does not exceed a certain amount, write it into the contract that way.

Your Right to Cancel

Under Vermont’s Home Solicitation Sales Act, a consumer who makes an agreement to buy goods or services at his or her home or workplace is allowed to cancel that agreement within three business days. The purpose of the law is to protect consumers from high pressure sales at their homes and to give them some time to reconsider their decision. If you are solicited for a home improvement job while at home or at work, or agree to have the work done while at home, you have three days to cancel the agreement. The contractor must tell you orally that you have three days to cancel, and the contract you sign must include forms stating that you have three days to cancel. If the contractor fails to tell you of this right, or if the contract does not contain the proper notice, your
right to cancel extends until three days after both oral and proper written notice are given to you.

If the contract is not solicited or completed at your home, you still have three days to cancel and must be given oral and written notice of that right if your home
is used as collateral for the financing of the contract—e.g., if the contractor or a lender takes a second mortgage on your home.

Paying for the Job

Almost all of the complaints about home improvement filed with the Consumer Assistance Program in Vermont involve cases where the consumer has paid and the contractor has either not done the work or has not done the work properly.  Where consumers have not yet paid, complaints are rare. Here are some tips on payment to help you minimize your chances of becoming a victim:
  • Keep your down payment to the minimum possible. Large down payments are an invitation to trouble.
  • If possible, make your payment upon completion of the work; or at least make payments as the equivalent portion of the work is completed. That way, if the contractor walks off the job, you haven’t lost any money.
  • Don’t make final payment until you are completely satisfied with the work.
  • If you are dealing with a disreputable contractor, the final payment is the only meaningful guarantee you have that he or she will complete the work

Home Improvement Fraud and the Home Improvement Fraud Registry

A Registry is available of the names of all persons who have been criminally convicted for committing “home improvement fraud” since July 1, 2003, or “fraudulent acts relating to home improvement” since July 1, 2008. The registry additionally includes individuals who have resolved civil claims brought against them by the State of Vermont in Superior Court.

“Sentence Deferred To” column: In criminal cases (cases which are resolved in district courts), a defendant may receive a “deferred sentence.” This means that if the person successfully completes all terms and conditions imposed by the court during the term of the deferred sentence, the conviction is expunged or removed. If there is a date in the column marked “Sentence Deferred To,” then the defendant will be taken off this list if he or she does everything required up to that date.

“Bond Filed” column: No person on this list who has been convicted of a criminal offense may engage in home improvement activities unless (1) the person has filed a bond with the Vermont Attorney General’s Office, or (2) the person works for another person or a company which has been notified of the past fraudulent activities.

Last modified April 06 2017 01:56 PM

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