Don't be a victim of repair job fraud

Watch out, Mr. Homeowner! Don't end up as just one more statistic, the naive individual who puts up large sums of money, even his entire bank account, to add new siding to this house, renew a "bad" roof, or insulate the walls, only to have the whole project go sour.

You could end up with nothing but a worthless contract and a nightmare.

The legitimate home-remodeling industry is a $40 billion-a-year giant. Yet, outside the honest companies, many outfits operate on the thin edge of the law, with an annual "take" running into hundreds of millions of dollars. The entire bill is paid by the unwary homeowner.

"The Fannie Mae Guide to Buying, Financing, and Selling Your Home" tells about a farmer in Kansas who signed a contract to have new siding put on his house. Two salesmen had come by and represented the siding as a product of the "Kaiser Aluminum Investment Company." Innocently, the farmer signed on the dotted line.

"Not only was the job inferior and costly, but the metal had about as much relationship to the real Kaiser aluminum as an Eskimo to a palm tree," says the book.

No matter how often such stories make the headlines, the fact is that thousands of homeowners each year get bilked. Many of them can't afford it.

Be particularly suspicious of the doorknockers, the itinerant pedlars who cruise the neighborhoods, good from door to door trying to trap the next victim. Before signing up for anything, ask for credentials -- and then take the time to check them out.

The fact is, the bilked homeowner cannot count on the police, the courts, or even the Federal Trade Commission for significant relief.

Where does that put the responsibility? the Fannie Mae Guide asks. "Strictly on the homeowner; on no one else," it responds.

A major remodeling job calls for much more skill than the average homeowner can provide. While you may be able to change the washers on the faucets, replace the furnace filter, paint and wallpaper the walls, or even panel the basement, there are some jobs you might find far too complex to tackle.

Choosing a contractor should be done with the same care and thoroughness you use when buying a high-priced item for the home.

The two key words are professionalism and financial stability.

How do you find a good, reliable remodeler who won't take you to the cleaners?

You can check with local bankers about specific companies, asking whether there have been any significant complaints on the way the business is run and how financially solid the firm is You can check with the local Beter Business Bureau, consumer affairs office, and state attorney general. You can also check with a home builder's association that is affiliated with the National Association of Home Builders.

Get references -- and then check them out. Don't be content with only a surface dusting of the company. Dig into the firm and find out how some of its customers feel about it. Is the work satisfactory, as well as the price? Does the company fulfill its obligations as spelled out in the contract? Is it dependable and does it get the work done on time?

Hiring a general contractor, while more expensive than hiring the subcontractors yourself, might make a lot of sense, depending on the extent and complexity of the job to be done.

Avoid changes in the original contract after the job is underway, if at all possible. Last-minute changes are the most frequent cause of misunderstanding and other difficulties in remodeling.

Everything should be spelled out in writing. Never make word-of-mouth changes in the work orders. It's a sure way to trouble down the road. It's a sure way to trouble down the road. When the final bill is rendered, any last-minute extras may add up to far more than you had expected to pay.

How about an architect? Is he worth his fee?

It depends on the size of the job. If you want a lot of work done on the house, then the answer is yes. For one thing, if you bring an architect onto the job, you shouldn't have any trouble with local building codes. If the architect messes up on this one, his license is at stake.

The local commuinity's building code is designed to protect you and your neighbors, not hamstring you. OIF course, you have no choice in the matter.

With an architect on the job, you also get someone to supervise the job. He'll judge whether or not the contractor is doing a good job. He may even save you money in the long run.

It may also be a good idea to have an attorney negotiate the contract, unless you really know what you're doing. He probably will charge you an hourly rate for discussing the contract with you and a fee for negotiating it.

An attorney at the front of a job can avoid litigation at the end.

If the job is big -- say, $10,000 or more -- ask the builder to post a bond on it. What it does is guarantee that the work will be done in accordance with the specifications as spelled out in the contract. Otherwise, you can collect from the bonding agent.

Will an upgraded property automatically result in a higher assessment, and thus a higher property-tax bill at the end of the year?

Not necessarily. Some cities, such as Boston, encourage people to upgrade their property without a nasty glance from the assessor.

In other words, there are many things you can do to your home, such as replace the furnace with a new one of the same type, patch and repair falling and damaged plaster, redecorate, put in new closets, and a lot more.

If you're planning any major changes in a house, don't forget the building permit. Of course, the architect or contractor, or both, will take care of that job if you have one.

Here's a stickler: If your house predates a building code or new ruling, then you may have to bring the entire house up to the new standard if you make major changes in the house. Suppose, for example, that you want to update the electrical system. You may have to start all over again if the system does not now meet the present electrical code.

The advice is simple: Look before you leap!