Beware The Storm Chasers

We’ve recently received a number of calls regarding issues with repair contractors and the 2020 derecho or the recent severe hail event in central Iowa. Especially for the derecho, people have been victimized by “storm chaser” contractors. Those are the ones who swoop in after a major storm event and make cold calls at houses with significant damage. They try to get homeowners to hire them on the spot with a series of pitches and promises.

Homeowners should proceed with extreme caution in dealing with storm chaser contractors. Be wary of contractors who show up at your door. Instead, try to work with an established and reputable local business. Research any contractors before you sign a contract or pay any money. The research should include attorney general databases, online court records, and Better Business Bureau information. Ask the contractor for references and contact them.

It’s best to obtain several written estimates so that you have a good idea of the proper and fair price for the job. Once you’ve chosen a contractor, insist on a written contract and read it before you sign it. The contract should cover important items like the scope of work, specification of materials, the price, and that any changes to the contract must be agreed to in writing. To avoid a common issue, the contract should include dates for starting and completing the work. If you have insurance to cover some or all of the repairs, don’t allow the contractor to have direct contact with your insurer. You should be the one to work directly with your insurer.

The most serious issues arise when the homeowner starts handing money to the contractor. Refuse any contract that requires you to pay large sums up front. You’re exposing yourself to the risk that the contractor will disappear with your money if you pay too much in advance. Hold on to your money and find a different contractor if too much is demanded up front.

Also be careful about money given for supplies or a subcontractor’s labor. If you pay the contractor, but it doesn’t pay those other parties, you’re still on the hook to them and they can make claims against you, including a mechanic’s lien. You should insist that the contractor obtain proof of payment and a mechanic’s lien waiver from any third parties who will be involved in the project.

You’re trying to avoid at least two problems in doing such things. First, you don’t want to give a contractor a large amount of money up front only to have the contractor disappear without doing any work or buying any materials. Second, if the work’s done poorly and needs to be addressed, you don’t want to be dealing with a contractor who’s disappeared or is located in a different state.

Homeowners need to be aware that it’s incumbent upon them to protect themselves from bad contractors or scammers. Local authorities and the attorney general’s office can’t get involved in every contract that’s signed in Iowa. And they have limited ability to help if things go wrong, especially in terms of recovering any money from a scammer that’s left the state. Please be your first and best line of defense against storm chaser scammers.