Both of my jobs are in the building industry. By day, I am a municipally-employed building inspector. In my rounds of doing mostly residential inspections, I see lots of remodeling jobs and talk to lots of contractors. My part-time job, which used to be my full-time job, is as a kitchen and bath designer. I have been in that business for about 15 years. Between these two jobs, I get to see a fairly wide view of the remodeling industry, and one of the most common themes that seems to arise is that of homeowners stealing from contractors. This is, I believe, why many contractors become angry and cynical over time and develop an "us versus them" attitude.
You may not believe me. After all, you see crooked contractors in the news now and then, but never crooked homeowners, right? The reasons for that are more logistical than statistical: One contractor who rips off a dozen customers is easier to research and makes a better story than a homeowner who rips off a dozen contractors. It is also a marketing matter: News outlets market to homeowners, not to businesses.
Enough dancing around the edges. Let me give you a some examples, which I have seen repeated over and over, of how homeowners rip off contractors.
One situation that is common in my design capacity is as follows: A homeowner calls our company and schedules a measure and assessment of their project. This is something we do for free (SEE NOTE 1). The boss usually does the measuring and initial on-site discussion, then brings that back to me or our full-time designer. We then draw out the space, read all the notes, ask the boss some questions, and design and price at least one option for the project. In that process, we generally end up doing some research to see what products best work for the project at hand (e.g., maybe they have an unusual space that requires an odd-sized fixture, or maybe they want a certain finish on the faucet that is difficult to find in a reasonably-priced line, etc.).
By the time the homeowner comes in to consult with us the first time (this consultation is free), we have probably already invested hundreds of dollars to create a custom design that is tailored to their needs and desires. In this meeting, we show them our ideas, listen to their responses, adjust on-the-spot if necessary, and give them a basic cost. Our initial estimate is never for a bare-bones design. We incorporate everything that we believe is needed for the project (we don't get involved in painting, though). Every little detail that we know, from years of doing this, is needed to accomplish the task is included.
Technically, our policy is to ask for some money if they want to proceed further. This policy prevents us from investing too much time and money into a project that may not happen. The deposit or design fee, or whatever you want to call it, gets incorporated into the cost of the project. We often will continue on, though, without a financial commitment from the client. This is because we don't want to scare people away if they are on the fence, and because we genuinely like working with people to create a successful project.
In some cases -- too many -- we will work out a great design, pick out many of the details (colors, textures, tile, cabinetry, counters, hardware, etc.), and be ready to sign a contract when we suddenly stop hearing from the potential client. Appointments may be missed, phone calls and/or e-mails may not be returned... The red flag is flying at this point. It may be that it turns out that they cannot do the project at this point due to unforeseen circumstances (job loss, medical expenses, sudden death in the family, etc). More likely, in my experience, it is because they have used you for all you can do for them and they are going to use your ideas and work and try to adapt it to a cheaper way of doing the project. This generally means buying the materials at discount stores (Home Depot, Lowe's, Direct Buy, etc.), and finding either a low-priced contractor (who probably works out of the back of a pickup truck with no license, insurance, etc) or a relative who has basic renovation skills (or even doing it themselves). Or they may take the design and list of materials and shop it around to other contractors. These contractors can offer lower prices for the job because they have not had to invest time and money in the whole design process.
The above scenario is much more common than you would expect, and has happened to me a few times recently (which is what prompted me to write this). Make no mistake about it: This is theft we are talking about. A design is the intellectual property of the designer (or designer's employer) unless/until it is purchased by the client. In a case like this, the company is spending money to create something for the client in good faith, and the client rewards that with dishonesty and thievery. I cannot stress enough that this is a common occurrence.
Another fairly common instance is when a homeowner makes changes during the project and refuses to pay for them at the end. In a perfect world, the job would stop at the mention of any change and a revised contract or change order be signed before proceeding, but there are a variety of reasons why that doesn't happen (it messes up scheduling, there may be miscommunication along the way, the contractor mistakenly trusts the homeowner, etc.).
Another similar situation that I see -- but has fortunately not happened to me personally -- is when a job is nearing completion and the homeowner kicks the contractor off the job and refuses to pay the remaining balance. The thinking of the thief in this case is that he/she can complete the job themselves for much less than the remaining balance. I have heard of two such instances in the last couple of weeks.
This may even be taken one step further, to the point when a contractor finishes the job and the homeonwer refuses to pay the balance. They do this because they know they can often get away with it. The time and court costs (and stress) involved for the contractor may well be too much to be worth the fight.
I am not talking about rare instances here. I see these crimes -- and that is what they are -- regularly.
Yes, there are crooked contractors. But the instances of homeowners ripping off contractors are more numerous than the other way around. These costs inevitably get passed along to other customers. In other words, these people steal from all of us.
How can this be remedied? I am not confident that it can be. If, for instance, I were to implement a strict policy of charging a design fee, the nature of the marketplace is such that a competitor would take advantage of that (I have seen it happen). If we were to stop a job every time a change was made, it would decrease efficiency on the job, costing time and money. If we were to adjust contracts to leave almost no money at the end, people would not sign such contracts (SEE NOTE 2). Believe me, these are things that are discussed regularly within the industry.
It may well be that the risks of being ripped off by homeowners is an inherent risk in the industry. As with so many things, the only real cure is to create a better society -- one composed of people who are more decent and honest. That's a tough thing to accomplish, but it is certainly worth a try. And it all starts with each one of us.
XXX
NOTE 1: Technically, nothing is free. All company actions incur costs: Salaries, phone bills, fuel costs, insurance, vehicle wear and tear, etc.. Any "free" services we provide are inevitably built into any sales that we make.
NOTE 2: I do try to keep the final payment as small as possible, but that is a fine dance to execute. Leave too little money at the end, and it looks to the general public like you are the one trying to work an angle.
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