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Do you know how to recognize construction fraud?

On Behalf of | Dec 30, 2021 | Construction Law |

As a property owner who is looking to make improvements to your home or investment property, you may find that there are many contractors and construction professionals who are willing to look at your job. Your priority is to find the team that is affordable and who will do the job correctly.

One thing you do have to watch out for is construction fraud, including issues like significant delays, payment or accounting disputes or a complete breach of contract. Fortunately, there are some tips that can help you.

Preventing construction fraud starts with asking the right questions

If you are keen to prevent fraud, the first thing to do is to avoid those who are trying to take advantage of you or take your money without actually meaning to do the job.

Some signs that a contractor may try to cheat you include:

  • Asking for the full payment for a project up front
  • Not having a normal place of business and instead working from a transient location
  • Offering a big that is significantly lower than others
  • Asking you to pay for a bid
  • Not having branded or marked trucks, a phone number on an invoice or pitch and not having a consistent address
  • Not being able to provide you with proof of insurance or workers’ compensation insurance

These are all major red flags that the individual or individuals you’re looking to work with are likely not licensed or insured to do construction work. These could also be signs of a much larger construction scam ring, which could leave you paying for work that never gets done.

To avoid trouble, you need to ask questions. Do ask for proof of insurance and about where the company’s main office is. Do ask for an estimate, and request information on a warranty.

It’s smart to get more than one bid, too. By doing this, you can see if one of the bids is much lower than the others and do your due diligence to find out why. Once you have bids, look into the contractor or team’s reviews, too, so you know what kind of work they’ve done and if others have been happy with it.


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