Ohio Consumer Law Blog
Information on Ohio's Consumer Laws from Attorney Daniel Myers, Myers Law, LLC, not legal advice
The Importance of Hiring an Insured & Bonded Contractor
No matter how you cut it, it’s a tough economy out there. One week it looks like things are improving, the next week there is a set back. People no longer feel secure in their careers. Construction companies have been impacted by the economic crisis–slow home construction, slow business expansion, and fewer tax-funded projects all add up to one thing: no work. Home repair contractors may be fine one week and in bankruptcy the next.
This is how the situation impacts homeowners:
A roofing contractor finishes installing a brand new roof on a home, with a 10 year guarantee on the labor performed. The homeowner paid good money, about $8,000, for the new roof. The homeowner didn’t know that the roof was installed in violation of building code, that water was leaking into her home, and that the contractor damaged other portions of her home. It will cost another $15,000 to repair and replace other damage done to her home. She calls the roofer, who by now has gone out of business. the roofer has no money, and will not fix or pay for anything. The guarantee is meaningless. He also never registered with the city, never obtained a bond, and was uninsured.
What can a homeowner do in that situation? Call an attorney. What can her attorney do for her? Little to nothing. Suing the contractor will get her a piece of paper saying she is owed money, but if it is noncollectable, it’s just a moral victory and another piece of paper.
Had she hired a contractor who was licensed, bonded, and insured, she could have made claims to the contractor’s insurance company and bonding company, who would have paid for some or all of the repairs. While she probably couldn’t get all she may have been entitled to ($45,000), she might be able to piece together enough between the bond company and insurance company to cover the $15,000 loss. The City of Cleveland requires contractors to provide a $25,000 bond, which would more than cover the costs in our example.
It is critical, now more than ever, for homeowners to hire licensed, bonded, and insured contractors. If a contractor goes bankrupt, leaving you with shoddy work and a damaged home, you need to make sure that compensation is available to you. The difference in Cleveland, Ohio between a bonded contractor and non-bonded contractor could be $25,000, even more if the contractor also had insurance.
There is little that an attorney can do for you if the contractor has no money, has no bond, and has no insurance. Make the right choice–hire a licensed, bonded, and insured contractor for your home repairs. The work may not be perfect, but when it isn’t, you have some recourse and a remedy.
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How does a homeowner ohio find out who insured and bonded his home contractor. He claimed to have finished the job, but didn’t. Now will not tell us who he is insured or bonded with
You should do a public records request to your local building department. You can drop in to the building department to request information, send them a fax, send them an email, or send them a letter. You should give them the approximate time frame you’re looking for, name of the contractor, name of the company’s owner, too, and ask for all contractor registration applications (with insurance and bond info) for the year or years they were doing work for you.