Beware of Deceptive Home Improvement Offers

Sacramento, Calif.- The California Contractors State License Board (CSLB) is urging consumers to be aware of home improvement offers by individuals who use unethical business practices to gain entry into their homes, and then use illegal, high-pressure sales or scare tactics to up-sell unneeded services or equipment.

Service advertisements are common from the heating, ventilating, and air-conditioning industry, especially during hot or cold weather. It’s important to protect and uphold the reputation of thousands of licensed and honest contractors in the HVAC industry and other trades.

Many of the complaints CSLB receive are from older adults who are falling victim to unscrupulous operators who make promises of low-cost equipment service over the phone, only to have onsite technicians make false statements that persuade them to increase their purchase. (Only the licensed contractor or salespeople for a contracting company who are registered with CSLB are authorized to sell additional services or work.)

In one case, an elderly woman was persuaded to sign over her home to the company. In a different case, an older property owner was convinced that all of her home’s ductwork needed replacing but, when a second opinion was obtained, it was determined that repair work was unnecessary.

CSLB asks California property owners to stay vigilant about low-cost home improvement offers for cooling, electrical, plumbing or any other similar “tune-up” offers that may not be what they seem.

• Be wary of telemarketers offering special deals for air duct cleaning or seasonal HVAC tune-ups. Many are calling from “boiler room” operations or call centers that pretend to be different types of service and repair companies, and make multiple calls until a homeowner takes the bait for a service call.
• Always ask for the state contractor license number before considering any offer.
• Make informed decisions about hiring a contractor or company by first checking CSLB’s website and review the contractor’s detail page to assure the license is in good standing. 
• If you’re not sure about a company’s offer, get a second opinion from a different, licensed contractor or company. 
• Talk to your utility company to verify the accuracy of costs and potential savings the telemarketer offers for HVAC systems.
• Make sure the contract contains the notice about the three-day right to cancel.
  It is equally important for consumers to pay attention to the work contract. If your home’s operating systems happen to fail and you call a company for immediate service, remember that your three-day right to cancel the contract is different depending on if it is a service and repair contract or a standard home improvement contract.

SERVICE AND REPAIR CONTRACT

• The work requested is for an emergency replacement or fix; contact is initiated by the customer on short notice.
• The total price for labor and materials is $750 or less.
• The contract document should be printed with the title “Service and Repair Contract.”
• The contract document includes room for a signature, the date and a statement that reads: “YOUR RIGHTS TO CANCEL BEFORE WORK BEGINS.”
• The three-day right to cancel ends as soon as the contract is signed and work begins, unless the contractor fails to comply with any of the specified requirements.
• The contractor must not sell goods or services beyond what is reasonable and necessary to take care of the problem being repaired.
• No payment is due or should be accepted by the contractor until the work is completed. The service and repair contractor may charge only one service fee.
• Any work beyond the initial replacement or repair may not be done without negotiation of a standard home improvement contract.
• Any parts that were replaced by the contractor must be offered to the customer.
• A customer may request that the contractor sign a release from lien claim for work that is done.

STANDARD HOME IMPROVEMENT CONTRACT

• The contract is not for urgent “service and repair,” and negotiations to enter into a contract can be initiated by the contractor or the customer.
• The total price for labor and materials is $500 or more. (The work is not for an emergency replacement or repair of $750 or less.) 
• A home improvement contract is an agreement between a contractor and a property owner or tenant that includes descriptions of all labor, services, and materials to be furnished and performed. 
• The customer has until midnight of the third business day after signing the agreement or purchase to cancel the contract.
• The down payment may only be 10 percent of the total contract price or $1,000, whichever is less. Only pay for portions of the home improvement project as they are completed.
• For repairs in a state or federally declared disaster zone, the customer has seven days to cancel the contract with no obligation for payment.

More information and publications about hiring contractors are available on the CSLB website, www.cslb.ca.gov or by calling 800-321-CSLB (2752). You also can sign up for CSLB Email Alerts.

The California Contractors State License Board operates under the umbrella of the Department of Consumer Affairs. CSLB licenses and regulates California’s 300,000 contractors and is regarded as one of the leading consumer protection agencies in the United States. In fiscal year 2013-14, CSLB helped recover approximately $51 million in ordered restitution for consumers.