When you've worked in the construction business as long as CustomSmart Homes has been, you tend to hear a lot of interesting stories from fellow construction workers and clients about some real project horror stories. Some people have hired builders that lied about their qualifications, or have signed up to work with "green" construction groups who didn't know the first thing about building energy efficient homes. Custom Smart Homes ratings show that our customers have been able to get the homes they wanted without any false pretenses, but other people haven’t been so lucky. If you're thinking about hiring a construction company or contractor to work on your home or business, look for these red flags so you can prevent being swindled.
Red Flag #1: They ask for a lot of money up front
There isn't a construction company or worker around that can start a project without any funds from clients, but the people you choose to work with shouldn't be asking for half of the money upfront before they even start laying out their plans. Most states have limits on how much money contractors can ask for before they begin construction work, and most tend to ask for around 10%-15% of the initial costs before they start their work. If you're working with a contractor that asks for 1/3 or ½ of the money before hand, you're working with somebody who is trying to scam you out of your money.
Red Flag #2: They can't give you a straight on answer on who will be at the construction site
Every person who is trying to get a home or building built needs to ask about site supervision. This question isn't just important to ensure that the project will be properly supervised; it's also to protect the client from any legal troubles. If the contractor you hire decides to not pay their workers, in some states it's legal for workers and subcontractors place a mechanic's lien on your home or property in order to sue clients for compensation. You can protect yourself from this by having each subcontractor and materials supplier sign lien releases or waivers each time you make a payment.
Proceed with Caution: Their payment schedule is based on pre-set dates and not actual completed work
Determining the payment schedule is up to the clients and the companies and/or individuals they're working with. Some construction companies choose to ask their clients for payments once major construction milestones are reached, like scheduling another payment for after the foundation work is completed or when the electrical work is done. Other construction companies choose to center their payment schedules on set dates and not work completion, and inherently there isn't anything wrong with that method either.
Planning payments around the calendar instead of when work is completed gives the client a predictable payment schedule. But some unscrupulous construction companies insist on being paid on certain dates to ensure that they get their money regardless of it their work is done. If your construction company bases their payment schedule off of the calendar and not their work, you should do look up business reviews and past customer experiences to see if they're a reputable company.