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Post date: June 3 2012

A.G. Schneiderman Takes Action Against Unscrupulous Home Contractors And Issues Tips To Protect Homeowners

A.G.’s Offices Statewide Say Consumers Are Unfamiliar With The Law Aimed At Protecting Them

Schneiderman: Homeowners Need To Know Their Rights And Home Improvement Contractors Need To Obey The Law

ALBANY – Following action cracking down on unscrupulous home improvement contractors, Attorney General Eric T. Schneiderman today issued tips to protect New Yorkers from unlawful contracting practices as the summer season begins. While in Plattsburgh on Saturday, the Attorney General announced the results of an investigation into 47 contractors for committing widespread violations of the law, including failure to provide written contracts or honor the most basic terms of the consumers’ work agreements. Attorney General Schneiderman also used the opportunity to educate consumers about the Home Improvement Contractors Law, which many New Yorkers are unfamiliar with.

Article 36-A of the General Business Law requires that every home improvement contractor, before beginning work, provide the consumer with a written contract, signed by both parties, which sets out certain specific information and disclosures. 

"It happens all too often, homeowners hire contractors without having a signed contract stating what work will be done and how long it will take. And many times, they end up with a much larger bill than expected, or with a project that was never started or completed," said Attorney General Schneiderman. "Homeowners need to know their rights and home improvement contractors need to obey the law. My office will fight to protect consumers' hard earned dollars and ensure that bad contractors are held accountable."

Today's statewide announcement comes after an investigation in Plattsburgh revealed dozens of contractors were not complying with the law. Nearly 50 contractors have entered into settlement agreements with Attorney General Schneiderman's office. They have agreed to do home improvement work only under written contracts that comply with the law and to put all advance deposits into a customer account at a local banking institution. Each of these contractors paid penalties and costs ranging up to $1,500. 

The Attorney General's office says if there even is a contract, roughly seven out of ten times the contract has no address for the business or full name of the contractor, which makes locating them difficult.

"One very simple tip that consumers can follow when hiring a contractor is to write down the license plate number of the contractor. That will give authorities a better way of tracking the individual down should something go wrong," addedAttorney General Schneiderman.

The law requires that the contract must:

  • Provide proposed starting and completion dates
  • Describe the work to be done
  • Include materials to be provided 
  • Give notice that the consumer has an unconditional three-day right to cancel the contract without penalty

In addition, the law requires that any advance deposits taken by the contractor must be placed into an account at a banking institution separate from the contractor’s other funds. The contractor must notify the consumer of the banking institution at which the deposit is kept.

The need for such written contracts is demonstrated in these examples:

  • An elderly homeowner was verbally quoted estimate of $13,000 for remodeling her home. After the work was completed, she received a bill for $25,000. This situation could have been avoided had the contractor provided a written contract with price and scope of work as required by law.
  • One homeowner was shocked to learn that a lumber company had filed a lien on his house for $10,000 for materials used by a contractor but not paid for from contract funds. This situation might have been avoided if the contract had complied with the law and warned the homeowner that subcontractors and material-men who are unpaid can put a lien on the home.

Consumers should take the following proactive steps when hiring home improvement contractors:

  • Be specific about what work you want done
  • Educate yourself about the required permits - don't rely solely on the contractor
  • Shop around
  • Get references and check them
  • Get proof of insurance from the contractor
  • Check licenses (if required)
  • Never pay the full price upfront
  • Always put work to be done in writing
  • Know where your payments are going
  • Never do business with a contractor who is unwilling to abide by any of the conditions above

If consumers feel they have been victimized, they are urged to contact Attorney General Schneiderman's Consumer Helpline: (800) 771-7755.

To view Attorney General Schneiderman’s announcement of the results of his investigation into 47 contractors for committing widespread violations of the law, click here.