A Quick Quiz on Home Improvement

By Hklbrries

Do you know how to protect yourself from contracting con jobs? Take this quiz from the Federal Trade Commission and find out.

1. The most common home repair scams involve:
A. Roofing
B. Gutter cleaning
C. Driveway paving
D. Furnaces
E. All of the above

2. You should not do business with someone who urges you to sign a contract before you have had a chance to review it. True or false?

3. An advertisement in the "home improvement" section of the Yellow Pages is your assurance that a contractor is licensed and reputable. True or false?

4. A less-than-reputable contractor:

A. Solicits door-to-door.
B. Offers you discounts for finding other customers.
C. Just happens to have material left over from a previous job.
D. Is unavailable by phone except for an answering machine.
E. All of the above

5. If you decide to hire a contractor, get a written estimate and contract. A well-written contract should include the contractor's name, address and phone number. If a license is required in your state, the contractor's license number should appear. Your contract also should specify:

A. Costs for products and labor.
B. The brand names of materials used, model and stock numbers.
C. Whether materials will be new, used, rebuilt or reconditioned.
D. Start-up and completion dates.
E. All of the above

6. What kind of insurance should a contractor carry?

A. Personal liability
B. Workers compensation
C. Property damage
D. All of the above

7. Your payments should be made by credit card or check. True or false?

8. Avoid making the final payment or signing an affidavit of final release until you are satisfied with the work and have proof that the subcontractors and suppliers have been paid. True or false?

9. If you use your home as security for a home-improvement loan and you do not repay the loan as agreed, you could lose your home. True or false?

10. If you sign the contract in your home or at a location that is not the seller's permanent place of business, you have three business days to cancel the deal. True or false?

Answers

1. E. All of the above. Other home repair scams often involve chimneys, windows, electrical wiring, tree pruning and pest extermination.

2. True. A reputable contractor does not pressure you to sign a contract.

3. False. Anyone can advertise in the Yellow Pages. It's still best to get recommendations from friends, neighbors and coworkers.

4. E. All of the above. You also should be wary of contractors who tell you your job will be a "demonstration;" pressure you for an immediate decision; offer exceptionally long guarantees; and ask you to pay for the job upfront.

5. E. All of the above. The contract also must spell out what jobs will and will not be performed.

6. D. All of the above. Avoid doing business with contractors who do not carry the appropriate insurance. Otherwise, you may be liable for any injuries and damages that occur during the project.

7. True. Your credit card statement or canceled check gives you proof of payment, in addition to the contractor's receipt. Paying with a credit card also may give you extra protections. You can withhold payment up to the amount of credit outstanding for the purchase, plus any finance or related charges. However, because state laws vary on your right to stop payment on checks, it is best to get legal advice before doing so.

8. True. Lien laws in your state may allow unpaid subcontractors and suppliers to "attach" your home through a "mechanics lien." That means the subcontractors and suppliers could go to court to force you to sell your home to satisfy their unpaid bills from your project. Protect yourself by asking the contractor and subcontractor for a lien release or lien waiver.

9. True. The lender can take your home and sell it, using the proceeds to pay off the loan and any foreclosure costs.

10. True. The FTC's cooling-off rule gives you three days to cancel the contract signed in your home or at a location other than the seller's permanent place of business.

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