For many New Yorkers their greatest investment is their home. Beginning a home improvement project can be daunting and finding a reputable contractor can be stressful. This chapter features an overview of steps and a listing of resources for the homeowner to consider when embarking on a home improvement project.
- Getting Started
- Entering into a Home Improvement Contract
- During the Project
- At the End of the Project
- Payments
- Licenses
- Don't Fall Victim to Common Contractor Scams
- Green Remodeling Resources
- Problems and Remedies
Getting Started
- Know what work you want done.
Prior to meeting with a contractor write down what work you want done and conduct research at home improvement stores or online. Determine how much you can spend. This will help you stick to your budget.
- Ask friends and family for personal recommendations for a contractor and get references.
Personal recommendations are usually the best way to select a reputable contractor. If your friends or family have not had work done, make sure you ask any prospective contractor for at least three references and check them.
- Ask Questions of the Contractor.
- How long have you been in business?
- How many jobs of this nature have you done?
- Will you be subcontracting this job out or do you have in-house staff?
- May I have your cell phone, business address as well as an emergency number that I can use to reach you?
- Do you have insurance?
- Shop around and get proposals in writing.
Do not be pressured into agreeing to hire a contractor when you first meet them. Get a written proposal from at least 3 contractors and compare the prices quoted and the materials suggested.
Warning Signs of Potential Home Improvement Contractor Problems
- You can't verify the contractor's name, address, telephone number, license or insurance information.
- The contractor's vehicle is not identified with the name of the business or phone number or has out-of-state license plates. Avoid transient contractors with only a P.O. box address or cell number.
- The contractor solicits door-to-door.
- The contractor tries to pressure you into signing a contract.
- The contractor asks you to get the required building permits.
- The contractor tells you a special price is available only if you sign the contract "today."
- No references are furnished or the references do not respond to your inquiries.
- You are asked to pay for the entire job in advance, or to pay in cash to a salesperson instead of by check or money order to the company itself.
- The contractor does not offer, inform or extend notice of your right to cancel the contract within three days. Law requires notification in writing of your "Right of Rescission."
- The contractor suggests a lender for financing your project. The contractor could be obtaining kickbacks from the lender or loan brokers for referrals.
Entering into a Home Improvement Contract
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N.Y. Gen. Bus. Law 771
Do I have to get a contract in writing?
Yes. The law requires every home improvement contract must be in writing, in plain English and signed by all parties to the contract.
What must my home improvement contract contain?
All home improvement contracts must include the following information:
- The name, address, telephone number and license number, if any, of the home improvement contractor.
- The approximate or estimated dates when the work will begin and be substantially completed and state any contingencies that would materially change the completion date. The contract must also include whether a definite completion date is "of the essence," meaning, whether the contractor absolutely must have the work completed on the specified date in order to complete his or her part of the bargain.
- A specific description of the work to be performed, the materials to be provided by the contract (including makes and model numbers) and the agreed upon compensation for the work and materials.
- Get proof of insurance. If a worker is injured, or damage is caused on your property, you could be held liable if your contractor does not have the required insurance.
What is a Lien Waiver Clause?
A lien waiver clause should be included in your home improvement contract. They protect you from having a lien placed against your home by unpaid subcontractors or vendors. With this you can withhold final payment until the contractor submits proof of payment to all subcontractors and vendors.1
Sample Contract
A sample building contract is available from the New York State Department of State Division of Consumer Protection.
During the Project
- Inspect the progress of the job. You will be making progress payments during this time. The work being done should be consistent with your payments.
- Make sure you are approving any and all changes during the course of the job. Any changes to your original plan should be detailed in writing. This will ensure that you are not faced with a substantial increase in the amount owed to the contractor at the completion of the job.
At the End of the Project
- Inspect the job to ensure that it meets the agreed upon specifications outlined in the contract.
- Make sure you receive proof that all subcontractors, suppliers, vendors and laborers have been paid.
- Check to see if the site is cleaned of debris and no damage has occurred.
- Inspect the contractor's work before signing off on the project.
- Make sure that the work passes inspection where required by the locality.
- Get a paid-in-full receipt for your records.
Payments
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N.Y. Gen. Bus. Law 771(f)
Advance Payments
Do not pay a large down payment before work begins. Negotiate only reasonable advance payments that are tied to completion of specific work. Make sure the contractor signs all papers. Keep a copy of all documentation for your records.
Progress Payments
A contractor may ask you to make progress payments for materials and expenses, prior to completion of your home improvement project. The contractor should have a schedule showing the amount of each payment required and the specific work that triggers the payments. The amount of each progress payment must bear a reasonable relationship to the amount of work to be performed, materials to be purchased or expenses to be incurred. If the contractor is to be paid hourly or on other specified time basis, then payments made shall not be considered "progress payments."
Licenses
Licenses for home improvement contractors are issued by consumer agencies in some counties in New York State. The following counties require contractors to be licensed. You can check the status of your contractor's license and file complaints by going to the web site of the appropriate authority:
New York City (Brooklyn, Bronx, Queens, Manhattan, and Staten Island)
Home improvement contractors and salespersons in New York City are required to get a license from the New York City Department of Consumer Affairs (NYCDCA) before conducting business in the locality. You can check to see of your contractor has a license on the NYCDCA website.
Some home improvement work areas -- such as electrical or plumbing -- are restricted to qualified trades people licensed by the New York City Depatrment of Buildings (NYCDOB) under separate laws. You can check to see if your contractor is licensed by going to the NYCDOB website.
Westchester County
Westchester County Department of Consumer Protection - Weights & Measures
112 East Post Road, 4th Floor
White Plains, NY 10601-5113
Tel: (914) 995-2155
http://consumer.westchestergov.com
Putnam County
Putnam County Department of Consumer Affairs
110 Old Route 6, Bldg. 3
Carmel, NY 10512
Tel: (845) 225-2039
www.putnamcountyny.com/consumers/file/contractorlist.pdf
Rockland County
Rockland County Department of Consumer Protection/Weights & Measure
18 New Hempstead Road, 6th Floor
New City, NY 10956
Tel: (845) 708-7600
www.co.rockland.ny.us/cpl/default.htm
Nassau County
Nassau County Office of Consumer Affairs
200 County Seat Drive
Mineola, NY 11501
516-571-2600
www.nassaucountyny.gov/agencies/oca/index.html
Suffolk County
Suffolk County Office of Consumer Affairs
1 North County Complex, Bldg, 340
Hauppauge, NY 11788-0099
631-853-4600
www.co.suffolk.ny.us
Don't Fall Victim to Common Contractor Scams
Be aware of common tools or lines of persuasion offered by some unethical contractors.
"I just happen to be working in your neighborhood."
Some contractors may make an unsolicited visit to your home using the pretense that they noticed problems with your home while working on a neighboring house. For example, the contractor might say he or she was on the roof of your neighbor's home and noticed missing shingles on your roof. More often than not, repairs are not actually needed. Be especially skeptical if the "contractor" has an out-of-state license plate or does not have a company name or phone number on his or her vehicle. Do not agree to any repairs on the spot. Get references, a second opinion and estimates for the job.
"I have materials left over from another job."
Contractors may offer a discount for a job because he or she has extra materials from another job. The reality is that reputable contractors order supplies to meet the needs of each job.
"I want cash up- front."
Contractors asking for cash up-front often take your money and disappear before or after your project gets under way. Do not pay in full for a project. Do not pay in cash. Note: You may be asked to pay a down payment. You should create a payment schedule in writing with the contractor at the start -- wherein you pay some portion upon completion of stages of the project. Your payment schedule should be based on reasonable performance. Hold a portion of the payment until the job is complete.
"I can help you finance the project."
A contractor may suggest you borrow money from a lender the contractor knows. This could indicate a home improvement loan scam, as the contractor may be getting kickbacks from the lender. Never finance through your contractor without shopping around and comparing loan terms. Be careful what you sign as you may end up with a home foreclosure problem.
Additional information can be found on the New York State Department of State Division of Consumer Protection's Home Ownership page.
Green homeowners enjoy knowing they are doing something good for the environment, their family and the future. Green remodeling reduces energy costs and the impact we have on our natural resources. There are many financial incentives, tax credits and resources on both the federal and state level, to encourage going green.
New York State Resources
New York State Department of Environmental Conservation (DEC)
Chapter 63 of the Laws of 2000, establishes a Green Building Tax Credit. It provides for tax credits to owners and tenants of eligible buildings and tenant spaces which meet certain "green" standards. These standards increase energy efficiency, improve indoor air quality, and reduce the environmental impacts of large commercial and residential buildings in New York State, among other benefits. Further information can be found on the DEC website.
New York State Energy Research and Development Authority (NYSERDA)
NYSERDA is a public benefit corporation created in 1975 under Article 8, title 9 of the State Public Authorities Law. NYSERDA's aim is to help New York meet its energy goals: reducing energy consumption, promoting the use of renewable energy sources, and protecting the environment. NYSERDA's residential programs help homeowners and renters reduce their energy costs; assist multifamily building owners in providing energy-efficient apartments for their tenants; reduce the impact homes have on the environment; and, provide training to contractors on how to provide quality energy efficiency services to their neighbors. Further information can be found on the NYSERDA website.
Database of State Incentives for Renewables & Efficiency (DSIRE)
DSIRE is a comprehensive source of information on state, local, utility and federal incentives and policies that promote renewable energy and energy efficiency. Established in 1995 and funded by the U.S. Department of Energy, DSIRE is an ongoing project of the N.C. Solar Center and the Interstate Renewable Energy Council. Further information can be found on the DSIRE website.
Federal Funding, Incentives, Tax Credits and Loans
U.S. Environmental Protection Agency (U.S. EPA)
The Green Building section features a directory of funding options targeted for several audiences including consumers and industry sectors. Further information can be found on the U.S. EPA website.
U.S. Department of Housing and Urban Development (HUD)
Federal Housing Administration's (FHA) Energy Efficient Mortgage program (EEM) helps homebuyers or homeowners save money on utility bills by enabling them to finance the cost of adding energy efficiency features to new or existing housing as part of their FHA-insured home purchase or refinancing mortgage. Further information can be found on the HUD website.
Energy Star
Energy Star is a joint program of the U.S. Environmental Protection agency and the U.S. Department of Energy. Information about Energy Star appliances and tax credits can be found on the Energy Star website.
Problems and Remedies
The New York State Department of State Division of Consumer Protection can mediate contractor complaints on behalf of consumers. You can access the Agency's consumer complaint form on the Division website. Please be aware that the Agency has no legal authority to require a contractor to pursue any specific action on your behalf; our mediation efforts and the resolutions we achieve are voluntary.
The Better Business Bureau attempts to successfully resolve complaints involving buyers and sellers in a fair and timely fashion. This includes complaints involving consumer-to-business and business-to-business transactions that involve the advertisement and/or sale of a product or service. You can file a complaint with the Better Business Bureau on their website.
Contractor complaints can also be filed with the Office of the New York State Attorney General via their website.
- NYC Department of Consumer Affairs, Home Improvement Consumer Guide http://nyc.gov/portal/site/nycgov/?front_door=true. ↑