This is part two on our ongoing series about avoiding the pressures and pitfalls that plague the home improvement industry.

Last time, we talked about how to spot and disarm the high pressure sales tactics and gimmicks that some contractors engage in to trick you into buying before you know you are making the right choice — “This is a Scam!”. Today, we are going to look at the most common construction nightmare scenarios that unsuspecting homeowners get caught up in.

And more importantly, how to avoid them!

Nightmare #1: My Contractor Took the Money and Disappeared!

You’ve all probably heard the story.

An unsuspecting homeowner — usually an older retired widow in the story — gets a knock on her door from a guy holding a clipboard who says he’s “been doing work in the area and noticed that you could really use a new roof” or some such. Spins a horror story of what will happen if it doesn’t get taken care of right away, and then he offers to take care of it for a price that seems affordable.

So she writes a check “for the materials,” and the supposed contractor leaves, and promptly vanishes never to be heard from again.

This is probably the biggest cliche about unscrupulous contractors — sadly for good reason. The number of outright crooks and thieves in the industry is fortunately low. But it only takes a few to do a huge amount of financial damage to individuals and harm the reputation of the entire industry as collateral damage.

So how do you make sure you avoid becoming a victim of this nightmare?

Don’t Call Me; I’ll Call You

Whenever possible, you as the homeowner should not rely on random contractors coming to your door to tell you what work needs done to your home. Rather, if at all possible you should be proactive about checking up on your home’s condition, and then reaching out to reputable local contractors on your own initiative when you need to hire someone to work on your home for you.

Let Me Think About it and Get Back to You

Sometimes, however, a contractor may come knocking on your door, and what he offers to do for you is something you do want to get quotes on. In that case, it can be perfectly fine to give the ambitious door knocker the opportunity to quote your work.

But never sign a contract on the spot! Most definitely do not write a check.

Always, no exceptions, make sure you take the time to independently research the company who has solicited your work to make sure they are legitimate before signing a contract and handing over any of your hard earned money.

And if they tell you that their quote is good this day only and after that it goes up? Tell them to take a hike.

Remember, if it seems to good to be true . . . well you know the rest.

Nightmare #2: My Contractor Wasn’t Licensed or Insured!

The building trades can be tricky. As a long term contractor, let me tell you, every once in a while no matter how careful you are, something can still go wrong.

A roof can be torn off of a home on a bright sunny day with zero percent chance of rain, and right when it is stripped down to the OSB a flash spring storm pops up anyway and floods the interior of the home.

You can excavate outside of a basement wall for a routine waterproofing job and, due to a crack hidden below ground grade the whole wall can start to give way and fall in.

And that does not even get into the problems that can be caused by shoddy or inexperienced workmanship.

And if it does go wrong, who protects you?

I have lost track of the number of times I have been called in to fix a disaster left by another contractor who either was not properly qualified to do the work he was attempting or (even worse) was not insured against the possibility of something going wrong when disaster struck.

So how do you make sure you avoid these disasters?

Make Sure Your Contractor is Licensed and Pulls a Building Permit

In some jurisdictions, the local building department requires homeowners to get their own permits. But in most, contractors are required to pull their permits on any work that they are going to perform.

Before you sign a building contract for any work, it is a good idea to ensure with your local building department that your chosen contractor is actually licensed in your area and is authorized to pull permits and perform work.

If your contractor asks you to get a “homeowner permit” and essentially lie to the building department that you will be doing the work yourself, stay a thousand miles away. This is an unlicensed contractor.

If your jurisdiction requires homeowners to pull their own permits even when hiring a contractor, you still want to ensure that the contractor you hire is authorized to work in your jurisdiction.

Many homeowners would save themselves all kinds of stress and heartache if this simple step was followed.

Request a Copy of Your Contractor’s Liability and Workman’s Compensation Policy

No matter what kind of work is being done to your home, never allow anyone to work on your property in any capacity before you have been provided with an up to date certificate of insurance.

This is, in my opinion, the most overlooked yet most important step you can take to protect yourself. If your home is damaged during the construction or — far worse — someone is hurt while working on the job, you are liable for that.

And the only protection you have against that kind of damage or claim is if your contractor carries both liability AND workman’s compensation insurance.

Every legitimate contractor is required to carry these insurances, and providing you with a copy of their certificate is free. So always insist on being provided proof of insurance, and never allow any work to be done until you have it in writing.