It’s the stuff of which nightmares are made. You make a significant down payment to a building contractor for a new home, business or other structure, for an addition or internal remodeling, or for related work such as a patio, sidewalk or driveway. Halfway through the project, the builder walks away and will not refund your money. Or you prepay part of a remodeling job or roof replacement, but the contractor never shows up and disappears with your money.
This kind of theft is a construction fraud scheme. A Virginia consumer in this situation can seek help from government entities or may be able to file a civil lawsuit.
In extreme cases, authorities could even charge the construction professional with a crime for construction fraud or taking money under false pretenses.
Prevention is the best protection
The best way to protect yourself starts before you hire the contractor. Check to make sure they are licensed. The Virginia Board for Contractors is the state agency that licenses building contractors.
You should not hire a contractor who is not licensed to do the work contracted for. If the contractor is not licensed, you will lose many protections which are available to consumers who hired a licensed contractor. In addition, you should check online reviews for the contractor and see samples of their other work. Talk to prior customers if possible. While this may not prevent all instances of contractor fraud, it will reduce the risk and give you a better chance of being made whole if you are a victim of fraud.
Assistance from state or local governmental agencies
If you are facing losses from an act of construction fraud, report the incident to the Contractor’s Board so it can take disciplinary action against the licensee. To prevent negative repercussions, the contractor may step up to finish the project or to refund your deposit.
If the Board says the contractor does not hold the proper license, it may open an investigation into the person or business for licensing violations.
In addition, land or building owners must pull the correct permits for construction projects from the appropriate city or county agencies such as the Prince William Building Development Division. Usually, the contractor will pull the permit for the homeowner, and you should insist that the contractor be required to do so in the contract. Should a contractor abandon a permitted building project, the city or county body that issued the permit can investigate the incident and may initiate an enforcement action – but only if the contractor is the one who pulled the permit.
Other legal remedies
If despite your efforts the contractor does not return to finish the project, you may need to retain a different person or business to complete it. You may be able to bring a lawsuit for increased costs and for any deposit the fraudster did not refund to you. Examples of such claims may include breach of contract, civil fraud or unjust enrichment. In extreme cases, you may be able to recover additional damages over and above the increased cost of the job.
Steps you can take
When you hire a contractor to do construction work for you, no matter the size of the project, get more than one estimate and check with the Better Business Bureau. Be sure the contractor is properly licensed and in good standing with the Board for Contractors.
Check with your local permitting agency about the proper permits and ask your contractor to obtain them before work begins.
As soon as possible after you realize the contractor’s deceptive intentions, send a certified letter to them demanding that either they finish your project or refund your money. Be sure to photograph and videotape the unfinished work.
Do not just accept a financial hit from construction fraud when there may be governmental or legal remedies for your losses.