Mike Holmes | Dec 17, 2012 8:00 AM ET
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You would think that after 10 years of me showing case after case of bad contractors that there wouldn’t be so many of them out there. But there are. And they’re still taking homeowners’ money and running.
People are always telling me, “Mike, why don’t you go after these guys? Why don’t you do a show about catching these crooks? They’re giving us good guys a bad name.” I agree — and they’re dragging the industry down with them.
When it comes to home renovations, add fraud to greed and you’ve got the kind of people that deserve to be in jail. They calculate and strategize on how they can take homeowners’ money and get away with it. They know the fraud laws.
Fraud laws state that as long as you do a little bit of work in the house you can’t be charged with fraud. That’s because a contractor can come back and claim that they were doing their due diligence. And even if they’re charged with fraud, odds are by the time it goes to court, most homeowners don’t have the money to fight the case. You can’t charge these people with anything else, because they’re not stealing. They are masterminds when it comes to fraud.
They don’t care about you. They don’t care about your kids. They don’t care if your house burns down. What they care about is getting your money. And they will do and say anything to get you to give it to them.
Intimidation is used a lot by fraud suspects. They’ll threaten to put a lien on your house or report you to the police. This makes homeowners not want to report anything, or deal with them altogether — to the point where homeowners just want them to go away. And that lets them off the hook.
Homeowners need to report home renovation fraud suspects. These cases go unreported too often. People are embarrassed, and think they won’t be taken seriously.
But there are many organizations that you can go to — organizations such as the Better Business Bureau, Ministry of Consumer Services, Canadian Anti-Fraud Centre and local police departments. The more information you give these agencies the more likely it will be that they can go after them.
In order to fight these people, agencies need “similar fact” evidence. Similar fact evidence is something that repeats over a number of households. That’s why homeowners need to come forward. Without that information these agencies are handcuffed.
New measures are being taken, such as the Prepaid Contracting Licence endorsed by Service Alberta. Basically, a contractor must hold a Prepaid Contracting Licence in order to take a deposit before beginning work. If the contractor doesn’t provide the services or provide the goods as agreed, the homeowner can submit a claim against the security the contractor has paid to the government.
As far as I’m concerned the best way to beat home renovation fraud is by educating the homeowners — and the public in general — on what’s a scam and what’s not. They need to know the red flags — and there are plenty of them: door-to-door contractors, contractors that show up at your house in a car — not in a professional truck, c. Contractors that advertise in flyers.
Good contractors are busy. They don’t need to go out looking for jobs. In fact, they’re overbooked.
Homeowners also need to look at the contract. Seems like I can’t say this enough. Is there information on what the job is going to look like, or how much it’s going to cost in floors, trim, repairs, building walls, electrical and plumbing? If it doesn’t spell out anything other than “I want your money and we’re coming in on this date,” kick them out. And if the price seems too good to be true, I guarantee it is.
Know your rights. Most homeowners don’t know that they can cancel a contract within 10 days — it’s what’s known as a cooling-off period. They can also cancel their contract if there is any misrepresentation by the company they hired.
The last time I got subpoenaed to court, a “professional” kitchen company brought in this big lawyer. Before we went into the courtroom I told the guy, “Do you really want to do this? Do you really want to fight these people or do you want to give them their money back right now?” He decided to fight them, and he lost. In the end, the judge took the money this company paid upfront to defend this case, charged them more and then gave it all to the homeowners.
But homeowners have to take some responsibility and do their homework. I don’t want you to think that going to court is your first option; it’s expensive! It’s always better to prevent than to treat. As far as I’m concerned the battle isn’t won in the courtroom. It’s won at home when you kick these people out of your house and you don’t give them a dime.
Catch Mike Holmes in his new series, Holmes Makes It Right Tuesdays at 9 p.m. on HGTV. For more information, visit hgtv.ca. For more information on home renovations, visit makeitright.ca.