Buyer Beware: Theft by Contractors Now in Season!

Getting your driveway re-paved? How about having a new roof installed on your house? Before having the work done, you'd be wise to make sure the contractor is reputable.

It’s certainly a wonderful time of year here in Wisconsin.  The summer season is in full bloom. Outdoor activities abound in the warm weather and the festivals and county fairs are there to be enjoyed.

Unfortunately, it’s also a prime time of year to find yourself becoming a victim to unscrupulous business practices by contractors who would replace your roof, re-pave your driveway or make other improvements to your home.

Make no mistake. There are many, many excellent contractors who do high quality work at a very fair price and we don’t want to paint all contractors with any sort of broad brush. However, the fact is there are also shady contractors out there and these have become a growing concern within the criminal justice system.

We also see contractors who may be very good at what they do but sometimes they have taken on too many projects and have too many irons in the fire at the same time. Problems can arrive quickly when a contractor will take, say, a $1,500 down payment from one customer and then apply that money to costs being incurred on a different project. In some cases, the contractor repeats this practice across a group of projects and suddenly none of those projects are getting finished.

Frustration for the home owner quickly sets in.  Why is it taking so long for the crew to come back and finish our project?  Why doesn’t the contractor return my phone calls? What’s going on?

In far too many cases, the problem extends beyond poor business practices and into the realm of criminal activity.  The contractor takes the down payment money and simply disappears, not returning to do the work.

We’re not talking about a disagreement about the quality of the work, which is a civil issue.   Money has been given to XYZ contractor and XYZ contractor simply hasn’t done the work, either because he just runs or he’s used that money to finish up a different project.

There is a lot of this activity going on.  From a prosecutorial standpoint or from the defense perspective, getting involved to represent the contractor, there is a fine line of whether it’s a civil issue where there’s a contract dispute versus an actual theft by the contractor.

The contractor can say, ‘Wait a minute. We didn’t take your money. It was a deposit.’ The deposit must be returned if the work isn’t done.  A lot of times where the contractor gets prosecuted, it is simply a case where the contractor got $10,000, they spent $2,500 on the project but it’s been stopped for six months and suddenly they fall off the face of the earth. They’re not returning phone calls, not showing up on the job. Then law enforcement gets involved and tries to ferret out the details.

If you want to protect yourself from this kind of ugly situation, do yourself a huge favor. Do your due diligence on your contractor:

  • Referrals are the key. Do your homework. If your best friend had really good luck with a certain contractor, chances are excellent they are reputable and will do a good job for you, too.
  • Check backgrounds on a contractor you are considering.  See if there are any civil lawsuits pending or small claims suits pending against those contractors.

That’s not the end-all, be-all but if it appears there are financial issues, address that with the contractor before starting any work.  If you don’t feel good about their answer, trust your instincts and move on to another contractor.

We also see way too many instances where people do handshake deals on thousands of dollars in remodeling projects. In this day and age, handshake deals are NOT the way to go. Make sure it’s in writing.  Make sure any deposit you are making is written into the contract.  If they say they can’t do that, it’s a sign that this is a contractor you don’t want to work with.

If it’s in writing, you will have legal recourse both, civil and criminally, where you can document what the contractor agreed to do and what amount of down payment was made. They didn’t do the work, they are missing and they are not returning phone calls.  Your remedies can then be either civil or, if there is criminal activity, you have something in black and white that you can present to law enforcement.

Pay with a check, NEVER with cash.  Checks or credit cards will leave a paper trail.  When you pay in cash, it becomes your word against the contractor’s as to how much cash was given, when it was given and why it was given.

Remember: doing your homework in advance will help you choose the right contractor to complete your project on time and to your personal satisfaction. It will also give you tremendous peace of mind.

About Attorney Mark Powers
Attorney Mark Powers is a partner at the criminal defense law firm of Huppertz & Powers, S.C. in Waukesha. Previously, Powers served as an Assistant District Attorney with the Waukesha County District Attorney's office as well as a municipal judge in North Prairie. He currently focuses in the area of criminal defense, and has handled many cases involving operating a motor vehicle while intoxicated, domestic disputes, and drug offenses.

Powers attended Valparaiso University School of Law, where he received his Juris Doctorate. Prior to law school, Mark attended the University of Wisconsin, La Crosse where he received his bachelor of science in Political Science.

For more information, please visit www.waukeshacriminalattorneys.com.

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Sarah Millard (Editor) August 09, 2012 at 05:56 PM
Thanks for sharing, Mark! I've been on housing rehabilitation trips to New Orleans post-Katrina. It's shocking the things people will do to take advantage of others during times when they need help. Hopefully people can use this advice to keep from being defrauded by contractors.
Absolutelyfabulous August 10, 2012 at 03:24 AM
A local contractor, ie Shorewood based, does amazing work and just an all around honest, down to earth and nice guy w/ decades of experience..Bob Duffy. I think they may have done the interior of Oakcrest Tavern when they came into the space. Custom cabinetry/woodwork, additions, dormers, kitchens, patios, decks, porches etc..Beautiful work. Duffy Construction/Remodeling on Frederick in Shorewood.
235301 August 10, 2012 at 04:20 AM
It's pretty rare for a contractor to be brought up on theft by contract charges, even when the evidence is clear that it occurred. Many of these contractors are basically pushing a ponzi scheme. They take payments on a new job to pay off the work/salaries/subs from the last job. It works until new work dries up. And it's a very tight community among the contractors. The subs won't be telling you, the customer, that "hey, your prime hasn't been paying me for previous work". It's also very difficult to get visibility into a contractors past. Your best bet is ccap: http://wcca.wicourts.gov/simpleCaseSearch.xsl;jsessionid=5AA0A912E04B0587A60B5E7118D596DA.render6? One thing I didn't see in the article above that is extremely important: the contractors on your job will have lien rights to your home. That includes the subs. Even if you pay the prime contractor and they fail to pay the subs the subs can come after you, putting a lien on your home. With one caveat: Wisconsin law requires that the contractors provide you a note within 60 days of starting work in your home that they have lien rights. Most subs do not do this because it tends to scare the homeowner. So it's typically beyond the 60 days when things start to go south, the sub hasn't been paid and now they want someone to make them whole. If it's after the 60 days and you haven't received that note then you are safe. Don't be bullied by a sub.
Mark Powers August 16, 2012 at 05:32 PM
Sarah, thank-you for the comments! It is unfortunate that people take advantage of misfortune for their own gain.
Peter Egan Jr. October 10, 2012 at 07:24 PM
When I lived in Louisiana, we had terrible problems with contractor fraud after Katrina. It's just amazing to me how some people can take the little bit someone who has lost nearly everything has left. It's one of the reasons I moved from there.
kk February 02, 2013 at 07:33 AM
What if a two partners in a LLC go out of business unannounced and then are sued. HMMM like Bella Kitchen & Bath Elm Grove for instance. Can one partner file bankruptcy and walk away free and clear leaving the other partner in the breeze? How hard is it to bring up charges on a LLC for theft by contract.... I would like to see justice served!


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