For the average American, which most likely means you, the largest asset and most consistent form of wealth generation is your home. However, when it comes time to make home repairs, most people do not take the necessary, and simple steps to protect it. So, how do you hire the right contractor and if you didn’t hire the right contractor, what do you do next?

In Virginia all contractors must possess a license issued by the Board of Contractors. This is for any job, no matter how big or small. The licenses are issued in three different classes: A, B, C. Class A contractors are allowed to do jobs of unlimited price, and Class B contractors are limited to doing jobs that cost a maximum of $120,000. Class C contractors are limited to jobs that cost $10,000. The “cost” includes labor and materials. If your job costs $6,000 in materials and $5,000 in labor, bringing the total cost to $11,000, your contractor must possess a Class A or Class B license, a Class C contractor is not allowed to do this job.

In addition to their Class, contractors are also issued specialties or classifications; such as plumbing, electrical, masonry. Do not hire a contractor whose only specialty is “Framing” to redo your bathroom by installing a new shower and sink. Hire a plumber.

It is important to know the reasoning behind the different maximum costs contractors are allowed to perform. The more expensive the job is, the more complicated it will be and it will necessarily cause the contractor to incur more costs to complete it. DO NOT PAY UP FRONT.

To obtain a higher class of license the contractor must have provided proof to the Board of Contractors they have the experience and knowledge and finances to perform more complicated jobs. For example, Class A contractors have proven they have more resources, talent and financial, than Class C contractors have - don’t let a cheaper Class C contractor sweet talk you into believing they are just as qualified to perform your $40,000 kitchen makeover as the more expensive Class A contractor is. They are not qualified.

Speaking of cheaper bids…. Contracting work involves health and safety issues. Why are you looking to cut corners for the structure you live in? If you have quotes from three contractors, two are similar and the third is significantly cheaper, there is probably a good reason why one is much cheaper, and it will not be a good reason, potentially everything from cutting corners to possibly just stealing your money.

Building Permits are required primarily for health and safety reasons. A permit is a two-step process, - you apply for it with your local Building Official and then after the work is complete the Building Official inspects the work. Your job is not complete until it has passed the Building Official’s inspection.

Do NOT hire a contractor who tells you a permit is not required or who will NOT obtain one. To obtain a permit a contractor must be licensed and must provide proof of their license to the Building Official. If a contractor tells you a permit is not required for your job or tells you it will be cheaper or easier if you apply for the permit, they are most likely NOT licensed. If your contractor is wiling to ignore the law and not obtain the required permit and inspection, what faith should you have in them to do the job properly? The permit protects the property owner as the Building Official will need to check off on the contractor’s work. If a contractor does not want the Building Official to check their work, there is a reason and it’s probably a bad one.

As stated above, contractors have proven to the Board of Contractors they have the financial ability to do your job. Why then are they demanding payment up front? Do not pay up front nor pay in cash. Your contractor should have sufficient resources to do at least 1/3 of your job without payment or at least to purchase the required materials without your payment. If a contractor cannot do that they do not have sufficient finances or credit to properly do your job. Instead, your contract should have a schedule of progress payments.

You can easily determine if your contractor is licensed by looking here:

https://www.dpor.virginia.gov/LicenseLookup

What can you do if you hired the wrong contractor? If they are licensed, you are in luck. You can file a complaint with the Board of Contractors. The Board cannot make a contractor refund a customer money, but if the Board finds the contractor engaged in improper practices, to include improper work, the Board can sanction the contractor. Sometimes through this process the contractor will do what is necessary to make the customer happy to lessen the sanction.

If the contractor does not make you happy, you can file suit. A sanction by the Board is admissible in a lawsuit. If the Board has ruled the contractor engaged in improper practices the Judge will not disregard that and decide something else. If your contractor is not licensed, they are committing fraud, and you should file suit immediately.

If your contractor, licensed or not, has stolen your money you can file criminal charges. To file criminal charges, you first need to send a letter to their last known address by certified mail demanding a refund. Don’t worry about the contractor ignoring it or saying they didn’t receive it. All you are required to do is send it. If a refund is not granted within 15 days, you can then file criminal charges with the police. Save a copy of your letter and the certified mail receipt.

If you have questions about contractor fraud, or about this subject in general, contact Todd Knode (tknode@setlifflaw.com) at (804) 377-1260 or Steve Setliff (ssetliff@setlifflaw.com) at (804) 377-1261.