Practical Tips to Consumers Under the New Right to Cure Amendments
The new law makes it very easy for a consumer to sell himself or herself short. In fact, that was the point behind the new law. These new changes were created to limit consumer rights by forcing consumers to take a low-ball early settlement. This low-ball settlement may not actually compensate the consumer for all the damages suffered, such as difficult to prove economic damages, time and stress, lost wages, etc. In this way, the Ohio State Legislature has severely weakened consumer protections in Ohio.
Too many times I have been called by a consumer who has been harmed by a bad contractor. I will hear about the substantial problems with their homes and the work performed–new windows are leaking, new roofs are leaking, new plumbing is breaking apart, new wiring is shorting. When I check into the contractor, I find out it is one guy with a truck who hired day laborers to do the work. He doesn’t have a formal company. He didn’t pay his day laborers, he has no insurance, he is not licensed to do the work he did, and he owes money to the state, the IRS, his creditors, and no longer owns his home. I have to tell these consumers that there is nothing I can do for them. The only person who will make money in this sort of case is the attorney, and that is not the point of consumer protection laws. However, you can’t get blood from stone and you can’t get money from these irresponsible contractors.
In order to help prevent finding yourself in this helpless situation, there are a few things, as a consumer, you can and should do before hiring a contractor or buying expensive goods from an unknown company.
Before you decide to do business with a company, take steps to:
- Make sure the business is reputable. Check with the Better Business Bureau, Angie’s List, and other organizations that review businesses. You don’t want to give a $1,000+ down payment to a fake or fraudulent company that is just going to disappear with your money.
- Read the fine print. If you can’t understand it (contracts can be very confusing and difficult to read), get an attorney to review it. You would be amazed about some things companies want you to agree to: binding arbitration (no day in court) before arbitrators who are in the pockets of the company; limitations on liability that limit your recovery to only a partial refund, even if that means you are losing thousands of dollars; one-sided promises to pay the company’s attorneys’ fees if you sue them. I have seen all these things in one contract! You should know what you are agreeing to. How bad do you want to do business with this particular company?
- If you are hiring a contractor, make sure they are licensed (if required), bonded (if required), AND insured (always). So many consumers are taken advantage of by fly-by-night contractors. If you are wronged, and the contractor has no insurance and no contractor’s bond with your county or city, you may have no worthwhile remedy available to you. That being said, you should always check with an attorney, and do so quickly, before you give up on a claim. Many, but not all, county and city building departments require contractors to be licensed and bonded. In general, electrical, plumbing, HVAC, refrigerant, and mechanical contractors should be licensed, either with your local building department and/or with the State of Ohio. The licensing is required because special training and knowledge is required for the work to be performed. The bond, if required by local law, provides you with some money you can get if the contractor performs work that violates building code and you need to pay someone else to fix it. Insurance protects you when the contractor damages your property or causes you harm personally. Always make sure your contractor has insurance–get a copy of the insurance limits.
- Get all agreements and warranties in writing. Although you have some rights even when you don’t have a written agreement, getting promises and guarantees on paper prevents a lot of fighting later. If someone promises that the car has never been in an accident, has never required work on the exhaust system/transmission/etc., or a contractor promises that if your roof leaks within the next 10 years, it will be fixed at no charge, you need to get these things in writing. Many times, after you sign a final contract, it will say something to the extent of “this contract represents the full agreement of the parties. Any warranty not specifically written in this agreement is disclaimed. The consumer shall not rely on any prior oral representations not included in this contract. This contract replaces any other prior agreements and understandings of the parties.” To save yourself from more headaches later, live by one simple rule: When you reach an agreement, put it ALL in writing.
- Educate yourself on what you are buying. Not only should you check with different business review organizations and references, but you should take a second to do your own research on the product or service. You don’t need to become an expert in transmission repairs, but if you know a little bit more about your vehicle or your house, you might be able to avoid getting taken for a ride by your service provider later. There are different online forums and websites you can find where others have had similar problems or bought similar goods and services before. Educate yourself on what you are buying.
After you decide to buy your goods and services from a particular county, you should make sure to do the following:
- Keep track of delivery and completion dates. Companies will tell you that your order will ship or be ready within a couple days or a few weeks. Sometimes, a couple days turns into weeks and months. When these delays take too long, they could entitle you to request a refund. Delays in delivery of goods could entitle you to a refund if the delay lasts more than 8 weeks. As for services, if the company isn’t getting the work done on time, that can be a warning sign of financial or other problems which can seriously impact the job later.
- Get changes in writing. When your seller comes to you and claims some unforeseen event occurred, or something came up requiring a change in your agreement, you should get the reasoning and negotiated change in writing. These changes, if you agree to them, can change your original contract. Since it is a good idea to have the original contract in writing, it is a good idea to have all changes to that contract in writing, too.
- Inspect the work/goods before you pay. Too often consumers will just blindly accept goods and services, only to discover too late that there are severe defects in their purchase. Not only can these defects be costly, but they can be deadly. Check for signs of problems when the work is done. You may decide it is worth hiring a friend or another trusted inspector to take a look at your purchase before paying for it.
- When problems arise, write them down. Consumers generally don’t approach a lawyer until well after the harm is done. If the other side refuses to compromise and settle the dispute, litigation might be the only answer, and it may take years to resolve the matter. Can you remember what you were doing two years ago on June 9th? One year ago? A month ago? Yesterday? It is a good idea to write down problems, dates, times, people involved, conversations, etc. in a diary for use later if the problems become catastrophes and you can’t come to an agreement later. You won’t know that until it is too late, so it is a good idea to write the problems down when they happen, don’t wait until it is too late.
The tricky part is what to do after you know you have a problem and the company won’t do anything to fix it, or refuses to resolve the issue with you. Under the old law, I would generally suggest trying to provide back up documents supporting your claim to the company to see if they will settle the dispute. Under this new law, I would suggest the opposite. You should first speak with an attorney before trying to settle the dispute with the company yourself. It is not in your best interests to give all the information you know to the company. This could cost you in the long run.
For example, an insulation company may have caused damage to your wiring in your walls. You received a quote from an electrician to fix the wiring for $3,000. You give the insulation company the quote. They ignore you, and you hire an attorney to sue them. Under the new law, they will likely offer you $3,000 after you file your lawsuit. This might be after two years of fighting back and forth, restless nights, stress, and after you pay an attorney. Maybe this is a good result for you. But what happens when you settle for $3,000, and then you find out the insulation was never installed correctly, and fixing that and bringing it up to code will cost you another $2,000? You’ll likely be out that $2,000. Instead of freely giving the electrical estimate to the company, involve an attorney first (and early on).
An experienced consumer law attorney would immediately file a lawsuit instead of negotiating with the company. The other side may not know how much money to offer you in its “Cure Offer,” and it may undershoot or overshoot your actual damages. If the company overshoots, and offers you more than $3,000, that is a better deal for you than you otherwise would have had. If the company undershoots, and offers you less than $3,000, your attorney can tell you whether it is a good idea to go forward with the case, and possibly recover $9,000, plus attorneys fees, plus costs.
In order to make sure you are not selling yourself and your family short, you should seriously consider this advice. It could be the difference between losing $2,000 and gaining $9,000. A diary, a written contract, and negotiation conducted by your attorney can make a big difference.