With spring here, your thoughts might turn toward home remodeling. But even before the first nail is pounded, you have plenty of work to do.
You must find a trustworthy, experienced contractor and negotiate a deal so no ugly surprises pop up. For Maryland homeowners, that's not so easy.
Sure, the state licenses contractors, but that's no guarantee the contractor is skilled or the job will be completed as promised.
Information the state provides on a contractor's record can be sketchy and — as I found recently — inaccurate or incomplete.
And while homeowners burned by a licensed contractor can seek restitution from a state-run fund, the process can take up to two years. Even then, the money isn't enough to cover losses on major projects.
While this all may sound daunting, there's a chance now that the legislature will improve things for consumers.
The Maryland Home Improvement Commission, which has regulated contractors for decades, expires next year. Legislation has been introduced to extend the commission's life to 2022 and some homeowner protections have been added. But the legislature could go further. Consumer advocates, for example, want online access to complaints about contractors so consumers can make more informed decisions.
With the weak economy and home improvements down, complaints have dropped. The commission received 1,604 complaints in the last fiscal year, about half the number in 2004, according to a Department of Legislative Services' report. But complaints will likely rebound when the economy does.
"It's not something that happens all the time, but when it does, it's just devastating to people," says Rebecca Bowman, administrator of Howard County's office of consumer affairs.
Just ask Terry Berg and her husband, Randy Johnson, of Edgewater, who made many of the right moves before hiring a contractor six years ago but still got burned.
They interviewed more than a dozen contractors. Checked references. Made sure the contractor was licensed. "I read a book on how to hire a contractor," Berg says.
The couple hired Gregory L. Haigis' firm, Arundel Home Connections, to remodel their 1937 house. The initial estimate was $289,500, and Berg says they paid $87,000 upfront in March 2005.
The two say they were told the construction would take no more than a year, so they rented a nearby house to get out of the way.
"Instead of one year, it took us three years," says Johnson, a retired National Security Agency mathematician.
Work didn't start until that September and progress was slow, the couple says. In early 2006, the contractor asked for more money, telling them the foundation was finished and had passed inspection, Berg says.
But that wasn't true, Berg says. Once Anne Arundel County's permit office inspected the work, it issued a stop-work order because the foundation was in the wrong place, she says. The couple fired the contractor and sued. A judge awarded them $117,000 in May 2006.
"We haven't seen a penny of it," Johnson says.
The couple went through more hurdles to complete the project with other contractors and moved back home in 2008. They figure they spent nearly twice the original estimate on legal fees and other expenses to finish the house.
As for Haigis, he was indicted in December on five counts of carrying out theft schemes on several remodeling projects — including Johnson and Berg's — from 2005 to 2007. He couldn't be reached for comment. His lawyer did not return phone calls.
Berg and Johnson have since joined with other homeowners to form a group to fight for stronger consumer protections.
"To me, that was the only thing I could do to be able to let it go ... to learn what the law is and change it," says Berg, a consultant to nonprofits.
Steven Smitson, executive director of the commission for the past three years, says new legislation would add consumer protections.
The commission, for example, would be allowed to issue citations so it could move more quickly against contractors violating the law, he says.
Half the citation revenue would go toward hiring expert witnesses when the commission needs help deciding a homeowner's restitution claim, Smitson says. The commission runs a fund that pays up to $20,000 to homeowners wronged by licensed contractors.
The legislation also calls on the commission to report next year on establishing different levels of licenses based on a contractor's experience and capital. This has the support of consumer advocates and industry players because it would prevent novices from taking on big renovations they can't handle.
Consumer advocates want more changes, such as requiring contractors to buy a performance bond for projects exceeding $25,000 to cover homeowner losses if problems arise.
But Kevin Nau, president of the Greater Baltimore Chapter of the National Association of the Remodeling Industry, says getting bonds is time-consuming and many contractors wouldn't be able to buy them because of the steep financial requirements, forcing them to work without a license.
Advocates also want complaints and the disciplinary records of contractors posted online. This is where the commission could really do a service for consumers.
You can request the record over the phone, but the results — at least what I found — can be spotty.
When I called the state's licensing division last week about Haigis, I was told that his license expired in 2009 and that there were two complaints against him. But Haigis' license was suspended in 2007 and he has had dozens of complaints against him over the years, says Smitson, who subsequently reviewed the record. That's the kind of information that would be helpful to homeowners.
Smitson says the state's call center reported the license information incorrectly to me. The commission's policy is to look back three years for complaints, he says, which is why the number was low. Smitson says he will recommend that the review period be extended to five years for a fuller picture.
Smitson adds that the commission is trying to provide more information online, but he wants it to be meaningful and not just a list of complaints that might or might not be legitimate.
Until these changes kick in, you're on your own finding a reliable contractor. Here are tips:
Get recommendations Check with friends, family and neighbors who have had remodeling done and ask for recommendations. Ask if the contractor was good at returning phone calls and stayed on schedule, Smitson says.
Interview contractors Talk to at least three about their work experience and credentials. Request local references and call them. Ask contractors if there have been complaints about their work. "It lets them know you will pursue that" and homeowners will learn if they are honest enough to admit problems and how they resolved them, Berg says.
Do a license check Contractors must display their license numbers. Double-check that the contractor is licensed — some use fake numbers — at the commission's website. Don't deal with an unlicensed contractor. If things go wrong, you won't be eligible for restitution from the guaranty fund. Also, check with the state at 410-230-6309 and the Better Business Bureau for complaints. These sources aren't foolproof but can yield valuable information.
Check court records As an extra precaution, check lawsuits online against the contractor. Granted, anyone can sue. Still, a contractor with lawsuits from angry homeowners and unpaid suppliers should be avoided like a rusty nail.
Beware the low bid When bids are far apart, find out why before grabbing the cheapest deal. Eric Linton of Annapolis hired Haigis' firm a few years ago because it offered to build a deck for half the price of another contractor. Linton, an engineer, says after all the problems with Haigis, he ended up paying another contractor to do the job for about the price of the original top bid. "I would not go for the low-cost bid necessarily," he says. "You get what you pay for."
Speak the same language Contracts are filled with jargon, and you and the contractor might have different definitions. Discuss terms with the contractor, when payments will be made and what will happen if the project takes longer than expected, says Marceline White, executive director of the Maryland Consumer Rights Coalition. The law says homeowners can be asked to put up one-third of the project's cost upfront. But you can always negotiate to put up less, particularly on six-figure projects, White says.