Home improvement projects can easily cost tens of thousands of dollars, which means the stakes are high if something goes wrong.
And things do. Maryland regulators received more than 4,400 complaints about home improvement contractors in the last three fiscal years, ranging from disputes about the scope of the project to no work performed at all.
The Maryland Home Improvement Commission, which offers a program where homeowners can be reimbursed some expenses if they have a dispute with a licensed contractor, urges thoroughly researching contractors beforehand to cut down on headaches afterward.
"Don't rely on the first person that comes up and says, 'I have the best deal for you, and it's good for today only,' " said John T. Papavasiliou, who oversees the commission as an assistant commissioner with the Department of Labor, Licensing and Regulation. "There's plenty of competition out there."
His top advice: Make sure the contractor has a Maryland home improvement license. Licensees pay into a state guaranty fund that customers with unresolved problems can file claims against. Homeowners who sign with an unlicensed contractor have no such option if the work is bad or the contractor takes the deposit and runs.
"There are people that just steal money," Papavasiliou said.
Sharon Humphrey, a retired executive assistant, said she didn't realize the contractor she hired to repair a damaged retaining wall on her Charles County property in the summer of 2012 wasn't licensed. It was a friend-of-a-friend situation — one she regrets getting involved in.
He kept delaying the start of work, she said. When he finally did get going, he didn't come close to finishing. And she was in a hurry to get it fixed.
"I was selling my house, and I knew that wall probably wouldn't pass inspection," said Humphrey, who has since moved to South Carolina.
Finally, she went to the Home Improvement Commission to try to get her money back —$2,400. And she did, after the commission coordinated on a criminal case against the contractor last year.
She knows she's lucky. Some homeowners don't get back what they lost, and the losses in some cases are much larger.
"I was surprised that I got every penny," Humphrey said.
She had a much better experience with the licensed contractor she hired to repair the repair: He got it done quickly and for less money.
Still, picking a licensed contractor is no guarantee of a problem-free experience. More than half the complaints to the commission last fiscal year were about licensees.
And when customers file a claim, they often get substantially less from the guaranty fund than they were hoping for. The average claim in the last three fiscal years: just over $14,000. The average award: just under $8,000. (The limit per claim is $20,000.)
Paul Dowell, a pharmacist who lives in Howard County, is frustrated by both the size of his guaranty-fund award and the years it took to get the initial decision involving his $117,000 home-improvement project in 2009. It's a case the state described as unusual for both its length and complexity.
The project was primarily an addition. But the work also included a new roof, repairs to termite-damaged floor joists and property regrading, and all three were at issue when Dowell had a hearing on his guaranty-fund claim last summer.
An administrative law judge said in his ruling that the roof, which leaked, was "inadequate and unworkmanlike" because it didn't match the pitch the architectural designs called for and the ridge vents required. Judge Stephen J. Nichols also used "inadequate" to describe the slope of the grading as well as the floor-joist replacement, because the contractor didn't use pressure-treated lumber as required.
The judge awarded Dowell about $7,800. Dowell, though, had asked for substantially more. He paid $13,000 for repairs to the roof and floor and had estimates averaging $6,400 to regrade his property.
"People don't realize if you file a claim against the guaranty fund, you not only have to face the contractor, but the attorney general's office sends an assistant attorney general in there to defend the guaranty fund," he said. "You've got to sit there and fight those two people."
Michael Vorgetts, acting commissioner of occupational and professional licensing at the state labor department, said the role of the attorney general's office is to ensure that homeowners are reimbursed only for eligible losses.
In the Dowell case, repair cost was the key issue. The judge ruled that Dowell received repair estimates that were too high, in part because they covered work the judge decided was beyond the scope of the original project.
That's what Dowell's contractor, Rick Garhart of Richard M. Garhart & Sons, argued during the hearing.
He agreed he didn't use the right lumber for the floor joists but otherwise contends that his work was up to par. He blamed heavy snow in December 2009 for damaging a ridge vent on the roof and causing the leak, not the roof installation itself, and contended that the grading was appropriate.
"You don't maintain a Maryland home improvement license for 27 years if you're going around ripping people off," Garhart said in an interview.
The two men disputed many aspects of the project. How extensive the grading should have been, for instance — the judge took Garhart's side — and who was supposed to amend the building permit for the floor-joist work and failed to do so, landing Dowell with a fine.
The contractor said it had a verbal agreement for Dowell to handle the permit, but Dowell says that's not so. The judge sided with the homeowner, noting that the contract specified Garhart was on the hook. Maryland rules also specify that the contractor is ultimately responsible.
Just getting to the hearing was a long slog.
A clause in the contract required arbitration — rather than a guaranty-fund claim or a lawsuit — in the event of a dispute. Garhart said his former client kept trying to find ways around the clause rather than going to arbitration, which could have cost each man thousands of dollars. Dowell filed a lawsuit and contacted mediation services rather than arbitrators, Garhart said.
But Dowell forwarded documents showing he selected three organizations that offered services they termed arbitration — the Better Business Bureau, the state attorney general's office and Creative Dispute Resolutions — and in each occasion, Garhart wouldn't move forward.
Dowell complained to the commission. In late 2011, the commission sent a letter to Garhart warning that it would start a guaranty-fund case unless he agreed to enter arbitration within 21 days. Garhart consented to the fund hearing instead, "to get this darn thing over with."
Vorgetts said homeowners should look carefully at contracts with arbitration clauses.
"Because of that clause being there, it did delay the work that we can do to assist the homeowner," Vorgetts said.
But Dowell thinks the commission should have stepped in earlier to help. And he wants the agency to take action over the floor-joist issue.
Because the permit wasn't amended and no inspection happened at the time, the incorrect lumber went unfixed for four years. That upsets Dowell because his daughter, now 4, sleeps in the room directly above the one with the problem joists.
Contractors with successful claims against them must repay the guaranty fund, and "that is essentially a fine," Vorgetts said. Any other action the commission might take against a contractor can't happen until the case is done, he said.
This one? It's only just coming to a close. Both men appealed last year's decision.
"I'll probably let it go just so I can get my money and get on with it," Dowell said.
Home improvement to-do list
Here's what you should do — and some red flags to watch out for — as you decide on a home improvement contractor, Maryland regulators say:
•Get estimates from multiple companies.
•Make sure the contractor you're interested in has a Maryland Home Improvement Commission license. You can look contractors up by name or their license number here: https://www.dllr.state.md.us/cgi-bin/ElectronicLicensing/OP_search/OP_search.cgi?calling_app=HIC::HIC_qselect
•Call the commission to ask for prospective contractors' complaint histories and any enforcement actions against them: 410-230-6309.
•Ask your contractor for customer references — and call them.
•Don't pay too much upfront, and don't pay in cash. Contractors can't require more than a third of the project cost as a down payment, and you want a paper trail for the money you hand over.
•Read the contract carefully — and if it includes an arbitration clause, understand what that means. Unless the contractor waives it, that clause prevents you from suing or making a claim against the state's guaranty fund until you go through arbitration — which can be expensive.
•Remember that you have three business days to change your mind after signing a home improvement contract, if you sign it at your home. (The exception: if you agreed to waive that right because you have a pressing problem to fix.)