Thursday, September 15, 2011

7 Common Roofing Contractor Scams to Avoid and How to Avoid Them

Of all the components to your home, your roof is probably the most important and the most overlooked, until there is a problem.  Even a minor leak can cause major damage to your possessions, the integrity of your home’s structure and your peace of mind.  To make matters worse, by the time you notice a stain on the ceiling or a wet spot on the floor, the water has had time to penetrate your shingles, underlayment, sheeting, insulation, attic space, ceiling joists and sheetrock.  What’s really maddening is that the results of a roof leak are typically a lot easier to detect than the source of the leak itself.

All of this angst is fuel for unscrupulous roofing contractors to take advantage of you.  While there are many clever scams (we’ll expose 7 of them here), the basic motivation for all of them is the same; to separate you from your money.  All of them play on your fears and lack of insider knowledge to take advantage of your bad situation.

Roofing Scam #1 – The Ferris Wheel:
You try to be a savvy shopper by bringing in multiple contractors and getting multiple quotes.  One company’s quote is dramatically lower than everybody else’s.  You scrutinize the quotes and press the low-ball contractor to explain how his number can be so low.  Here comes the shine-o-la.  He may tell you that he got a better deal on materials or that the other guys are overstepping the needs of the project by replacing components that are not damaged.  Sounds good.  And just like the Ferris wheel at the country fair, he puts his price on the ground so you can easily climb on in.  But once the lap-bar comes down, you better hold on.

Now that he has your deposit and has removed enough of your roof to insure your commitment to the project, the price starts to go up.  “I’m going to have to replace more of your sheeting than we agreed to.”  “I’ve noticed some damage to your fascia boards and your trusses.”  “We can’t match your shingles so we’ll have to replace all of them.”  The price keeps going up until he has become the most expensive of all your quotes. But it’s too late to change teams.  If you refuse to pay, he just disappears and you have to find someone else.  Only now you have less money and less time to correct the problem.

How to avoid it:
Get local referrals for any roofing contractor you choose.  If he hasn’t done work for your neighbors, he doesn’t belong on your roof.  Get your quote written in contract form before you let work commence.  If he is too eager to get started it is usually so you don’t have time to change your mind until you’re up in the air.  Never agree to pay more than 30% at the start of the project.
Rule of thumb – avoid the temptation to go with the lowest bid.  The cost of structural damage to your home, or damage to your property or losing a potential buyer will always surpass a few dollars for the right contractor.

Roofing Scam #2 – The Poor Mouth:
Your contractor says, “I’m only charging 8% mark-up on your roof.”  This scam is designed to give you the feeling that your poor, salt-of-the-earth roofing contractor isn’t really in business to make money.  Why would he want you to think that?  Probably so you will trust him enough to give him the job out of pity and so you will never challenge any of his pricing.  Now he can overcharge you for materials and labor too.

But the worst part of this scam is that it is ultimately a ploy to get you to pay out 92% of the contract before the work is done.  You believe he is only make 8 percent so naturally the rest of the money you give him will be for hard costs.  He leads you to believe that he wont make a dime until the very end of the project.  But once he’s got your money, he may be hard to find.

How to avoid it:
Remember that his profit percentage isn’t your concern.  Even if he tells you he is doing your job at cost as a favor or just to take the work from his competitor, it has no impact on your cost or your finished project.  Get multiple quotes and award your job based on reputation, like work and price, not on which contractor has the most sympathetic story.  Also, get a “lien release” in your contract.  This will protect you if your contractor fails to pay his suppliers with the money you pay him.

Rule of Thumb – Any contractor that is trying to leverage your sympathy over his own reputation is probably deficient in the latter.

Roofing Scam #3 – Lost In Translation:
You sign a deal with a contractor and work begins on your new roof or repair.  On day three of the job you notice some new faces in the crew.  A few more show up on day four.  By the end of the week it seems like a completely different company is working on your job.  You call the original contractor and he explains that they got called onto a big emergency job and his friend, brother or cousin is helping out at your house.

About the time your second payment is due, the job has become much more involved and expensive.  The original contractor is missing in action and the friend, brother, cousin is explaining that the complexities of your repair are causing an unforeseeable cost overrun.  He can stop all work while you wait for contractor 1 to return and explain it or you can give him the extra money to keep the project rolling.  When you finally track down contractor 1 he says, “you shouldn’t have approved the extra work without notifying me.”  “But I thought he was working for you.”  You begin to feel like nobody is speaking the same language any more.

How to avoid it:
The best practice with any contractor you hire to work on you house is to demand proof of insurance and make sure it is part of the contract.  This requires your contractor to verify the names and status of every person who will work on your house before the job begins.  It is worth a phone call to the insurance agent to make sure everybody on your job is covered and that the policy is up to date.  Otherwise they are your liability if they get injured on your property.  Now, when the friend, brother, cousin shows up, you’ll have a really good reason not to let them on your property.

Rule of thumb – The only reason contractors use this ploy is to pass a gullible customer from one scammer to the next.  Always know who is working at your home.

Roofing Scam #4 – The Yard Sale
This is one of the most insidious tactics of all.  You come home from work on day 1 off your roofing project to find shingles all over your yard, in the bushes out in the street, covering your driveway.  There are also big pieces of plywood everywhere.  There’s a gaping hole in your roof and all your Christmas decorations are flagging in the breeze.  The problem is you signed on to have a minor leak repaired and now you are committed to an entire roof replacement.

The contractor tells you that he burned through the materials deposit paying for all the labor from the day’s activities.  He then informs you that he can “stop now” or start a new contract with an even bigger deposit.  You protest and say, “I thought you were just going to fix a leak.”  He replies, “that’s what I’m doing.”

How to avoid it:
Follow your contractor through the assessment inspection so you’ll see exactly what work must be done to remediate your roof.  Don’t agree to any nonspecific language in the contract like “patch hole” or “replace damaged sheeting.”  You contract should clarify “replace two 4’x8’ sheets of plywood and 64 sf of slate grey asphalt shingles.”  Your estimate should be very precise and your contract should stipulate that nothing beyond the approved scope of work can be performed without prior authorization in writing.

Rule of thumb – This scam is usually targeted at the elderly and the scammers are typically not with a local company.  Check for local references and for a valid business license issued by your city.

Roofing Scam #6 – Storm Chasers:
A tornado, severe windstorm or hailstorm can trigger a feeding frenzy among roofing contractors.  Unless you’ve been through this phenomenon you’d never believe it.  Like the Oklahoma Land Rush of 1889, roofers are flying from door to door trying to claim houses and hammer their signs into the front yard.  The method that they use to brand their conquests and signal to the other storm chasers that “this house is taken” is the ubiquitous blue tarp.

If you are a home owner who just watched you roof fly away, you may even feel lucky that someone cares enough about your family to come out in bad weather and stabilize your home.  The storm chasers want you to feel grateful and ultimately loyal to them for being there.  Their plan is for you to tell your homeowners insurance agent that you’ve already found a contractor so they can bypass the usual approval process.  Then they run up your repair bill and rip you off and your insurance company too.

How to avoid it:
DO NOT LET ANYONE ON YOUR ROOF AFTER A STORM.  First of all, the damage has already been done.  Second of all, you can’t properly vet a contractor in the lull between thunderstorms.  Third of all, what happens when you give a total stranger with no liability insurance permission to climb upon and ultimately fall off of your roof?  Call your insurance agent and tell him that you have visible damage to your home.  Your agent will have a pre-approved list of contractors and first responders that he will notify.  Your agent will tell you whom to expect.

Even if it’s a day or two after the storm and you get a knock at the door from someone offering to do a free roof inspection, don’t fall into the trap.   Call your agent first and get an approved contractor from him if you have concerns about your home and feel you should file a claim.

Rule of thumb:  Any contractor who comes directly to you after a storm instead of through your agent is probably not an approved resource for a reason.  Just because someone has a pickup truck, extension ladder and a tarp it doesn’t make them a certified roofing contractor.

Roofing Scam #7 – Your Lucky Day
Knock knock.
      Whose there?
Roofing scam artist ready to sell you a roof you don’t need for money you don’t have.
      Oh, come on in.

If only it was that easy to spot the roofing scammer.  But they usually have a little slier approach than that.  The “luck day” scam is designed to make you feel like you have the incredible good fortune to be at home when they knock on the door or call.  There are many different opening lines but all of them lead to you signing a contract for roofing repair or replacement that you may not need.  Here are some of the most common pitches:
  • There have been a lot of storms in our area and I can offer you a free roof inspection with no commitment on your part.  And if there is any damage I can file the insurance claim for you.
  • How would you like to get a new roof and have your insurance company pay for it?
  • My company is expanding into your area and we’re offering a promotional, free, 17-point roof evaluation.
  • It’s almost time to replace your roof.  Wouldn’t it be smart to extend your warranty?
  • I have a crew working in your neighborhood and we’ve got some material overruns that are already paid for.  I could have a technician replace your torn, curled and missing shingles as soon as this afternoon.
  • No matter what this guy has to say to get on your roof, the too-good-to-be-true offer will end up with the discovery of major damage and some arm-twisting to get you to hire him for more work.

How to avoid it:
Don’t agree to anything on your front porch.  Tell the salesman that you would like some information about his company and the promotional offer so that you can check them out for yourself.  Inform him that you will call to set an appointment if his references are satisfied and your insurance agent agrees that his company is reputable.

Rule of thumb – If a dentist knocked on your door and offered to look in your mouth for free you wouldn’t let him.  Door to door roofers know that the fastest way to your wallet is to climb on your roof.

The roofing business has been around as long as people have lived in houses.  Even though it is a very competitive category, most roofing companies are completely above board.  There are thousands of reputable roofing companies all across America that offer great service at fair prices and are completely worthy of your trust.  The companies that resort to the tactics you just read about tend to move around, change names and rarely last very long.

The roofing contractors referred on are pre-screened. You may have to wait 24 hours, but rest-assure - the roofers have been verified in having General Liability Insurance, Workman's Comp Insurance and Licensed (some states do not require Workmen's Comp or a License and, if that is the case, it will be noted in the referral statement.

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