Home renovations are a lot of work — and require due diligence

About a year ago, Matt Venditto hired a builder to construct a house in Westminster. It wasn't long before buyer's remorse set in.

In early June, Venditto purchased a lot from Green Builders Inc., which was expected to finish the four-bedroom house within six months. But, Venditto says, progress was slow and the builder difficult to reach.

Then, late last year, Venditto started hearing from subcontractors that they hadn't been paid.

By mid-March, a few subcontractors had filed lien notices, while others began calling Venditto to complain that they also hadn't been paid. Venditto negotiated with them to make sure they finished their work, paying about $35,000 out of pocket. Last month, Green Builders filed for bankruptcy under Chapter 7 — which would liquidate the business.

Despite all this, Venditto says he's fortunate.

"Some others are even worse off than me," says the information technology salesman, whose family moved into the new home recently. Meanwhile, a handful of others who hired Green Builders are stuck with houses far from completion.

Green Builders' president, Tom Green, couldn't be reached for comment, and his lawyer did not return calls.

Building a house or undertaking a major home renovation is expensive. But plenty of reputable builders and home-improvement contractors can ensure that projects go off without a hitch. However, when a building job goes bad, it can seriously disrupt the lives of consumers — and cost them a lot more money than they ever anticipated spending.

"You are almost literally held hostage. You started something, and your house is half done or half under construction," says Marceline White, executive director of the Maryland Consumer Rights Coalition. "You put money down and want the project to be done. It's not a thing that people can easily walk away from."

(White's nonprofit recently published "How to Improve Your Home Without Losing Your Shirt," which is available online at marylandconsumers.org.)

So far this year, the Maryland attorney general's office has received 56 complaints about homebuilders and 176 about home-improvement contractors. Last year, consumers lodged 141 complaints against builders and 550 against contractors.

One of the best ways for consumers to protect themselves is to do some homework on builders and contractors before hiring them.

Start by talking to former customers of a builder or contractor you're thinking of hiring. Ask if the builder or contractor finished on time and within budget. What complaints did the customers have, and how did the company respond? Would they hire the company again?

Make sure that builders are registered with the state and that home-improvement contractors are licensed. If they're not, you won't be able to make a claim with state-run guaranty funds that can reimburse you for some or all of your losses due to shoddy or unfinished work.

Check online for a builder's registration at http://www.oag.state.md.us/homebuilder.

To make sure a home-improvement contractor is licensed, consumers can search online at dllr.state.md.us/license/mhic/. White warns that some con artists give out fake license numbers.

Find out if others have filed a complaint about the builder with the state at 410-576-6573.

Call the Maryland Home Improvement Commission at 410-230-6309 to learn of complaints filed against a contractor. (Be prepared to be on hold a long time.)

Review a company's record with the Better Business Bureau of Greater Maryland. And search the Maryland Judiciary Case Search online to find out if builders or contractors have had lawsuits filed against them by unhappy customers or unpaid subcontractors.

Be aware: These sources can be useful, but they aren't guaranteed to uncover all problems.

The attorney general's office, for example, has received only three complaints against Green Builders since 2010, two of them in the last month. The BBB gives Green Builders an A+, noting that the company has had only one complaint in the past three years and no government action against it.

BBB spokeswoman Jody Thomas says the ratings are based on customers' experience and complaints. She adds that the BBB will follow up on Green Builders' bankruptcy.

Get at least a few bids from builders or contractors. (That may not be possible if you're erecting a home on the builder's land.)

Beware of the low-ball bid, which could be a way to win your business but impossible for the company to meet.

"Make sure the details of the contract are clearly spelled out and you are getting what you want to have done," says Jeston Hamer Jr., director of the state's home builders registration unit.

Try to resolve disputes directly with the builder or contractor. Some businesses require you to settle problems through arbitration.

You may be entitled to make a claim with one of the state-run guaranty funds when things go awry — although the process isn't quick.

Consumers can recover up to $50,000 from the homebuilder fund, although it won't pay out more than $300,000 per builder. The home-improvement fund will reimburse consumers up to $20,000, with no more than $100,000 paid out for a single contractor. Builders and contractors are required to replenish the funds.

If many claims have been filed, it's possible that consumers will get less than the maximum amount — and, in a worst-case scenario, nothing at all.

Of course, you can take precautions and still run into trouble with a contractor or builder.

Venditto, the Westminster homeowner, says he talked to former Green Builders' customers and that their complaints were minor. He adds that the builder offered an exceptionally low price — which should have been a red flag.

Would he do anything differently?

"I would have bought a house that's already built," he says, half-jokingly. "In all seriousness, I didn't know that it was going to be like this."


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