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Don't Mess with Texas Contractors

Texas law does very little to hold contractors accountable

Everyone has heard horror stories about home remodeling contractors, and increasingly, many of them seem to be coming from Texas. Consumer advocates say there's a reason for that -- Texas law does very little to hold contractors accountable, and all too often it's the homeowner left in the lurch.

A recent report in the Houston Chronicle detailed reports from homeowners who've had bad experiences with a contractor, and discovered they have few rights when they looked for recourse.

Criminal cases against contractors are almost impossible to make under current Texas law. When homeowners file civil suits, unscrupulous contractors file for bankruptcy, or seek other clever manipulations of the law.

Part of the problem, say consumer advocates, is that Texas has almost no licensing requirements for home remodeling contractors, making it very difficult for homeowners to tell the good ones from the bad ones. The situation has gotten so bad that frustrated homeowners formed a chapter of Homeowners Against Deficient Dwellings, which tries to offer some education to consumers before they get in a jam.

The group says it would like to see Texas adopt some of the safeguards other states have, like performance bond requirements, a guaranty fund for victims and more thorough licensing procedures.

The Texas Attorney General's Office reports receiving more than 700 reports from homeowners about their contractors since 2002. The Better Business Bureau of Metropolitan Houston said it's received more than 4,000 such reports in the last three years.

Two Common Scams

The attorney general's office says there are two very common home improvement scams it deals with on a repeated basis. In one case, a contractor says he was in the neighborhood and noticed something on your home that is in need of repair. In the other, the contractor knocks on your door and says he's just completed a job for one of your neighbors, and has leftover materials, and can do the same job for you at a "today only" low price. In both cases, the contractor shows up uninvited. That, says attorney general Greg Abbott, should send up a red flag.

While consumer education and vigilance is all well and good, Texas consumer advocates say putting teeth into the state's consumer laws is a better answer. They point to a recent case in which disgruntled homeowners were successful in bringing criminal fraud charges against their contractor. In court, the contractor denied he committed fraud and claimed he simply took on more work than he could handle.

The case was tossed out because the court held that contractors have no fiduciary duty to homeowners under state law. Consumer advocates say, until that changes, Texas homeowners will continue to be at the mercy of home repair rip-off artists.

It gets worse. Under Texas law, if a subcontractor doesn't get paid, they can place a lien on the property. Many a Texas homeowner who has paid their contractor in full has found themselves in that situation.

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