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Care and common sense needed for a successful rebuild after a wildfire

Following the 2003 Cedar fires, many victims were unprepared to deal with the process of rebuilding their homes and became prey for unscrupulous contractors.

In the aftermath of this year's wildfires, the construction industry and local building officials are focusing on educating fire victims so that history doesn't repeat itself.

"These unscrupulous guys are coming into your hometowns and unfortunately trying to make a profit on your misfortune," said Jeneece Hards of the Contractors State License Board, adding before the fires had been completely contained eight contractors had already been arrested on felony charges.

Hards spoke as part of a panel discussion dubbed "Don't Get Ripped Off," which was held a week ago during the San Diego Rebuild symposium.

The event, held at Escondido's California Center for the Arts, provided a venue for fire victims to gain knowledge about the rebuilding process and meet with more than 200 contractors, local building officials, and other members of the construction industry.

Typically scam contractors, who at times can seem very believable, utilize someone else's license number and attempt to collect a large sum of money up front prior to commencement of any work, according to Michael Bishop, deputy chief of the Bureau of Investigation for the office of District Attorney Bonnie Dumanis.

By law, a contractor can't accept a down payment of more than $1,000 or 10 percent of a project's value, if that project is a remodel.

However, for new construction no such limitation exists, which means a contractor can legally ask for a large sum of money upfront, according to Hards.

"Just because they want an amount you can say 'no.' There's absolutely no reason to pay a contractor who's a solvent good contractor any huge amount ahead of time," advised construction attorney Pam Scholefield, of Scholefield Associates P.C. "Don't let your desire to get back into your home have you make rush decisions," she added.

To ensure that a contractor doesn't take the down payment and disappear or begin a portion of the work and then bail on the project, a homeowner should first check the license of every contractor being considered.

According to Bishop, a homeowner should then confirm that those contractors are properly insured and bonded.

It is also a wise move to check contractor's references. "Don't lose your common sense," he said.

When seeking out estimates, from licensed and bonded contractors, a homeowner should obtain at least three bids.

According to attorney Bob Ilco, if the three bids are within 10 percent of each other a homeowner can feel confident that the suggested contract value is accurate and that higher bids should not be considered.

Once a general contractor is selected and obtains down payment, a homeowner should pay that contractor through utilization of progress payments, which require a contractor to complete certain project milestones prior to receiving payment.

Typically most lenders will put a homeowners loan in a fund control, which verifies that construction is progressing prior to release of additional funds.

"Only you are the ones that can approve those payments, don't let them (contractors) be a co-signer on your fund control," Scholefield cautioned, adding homeowners should not work with contractors that don't supply a cost breakdown of the various work involved to rebuild a home.

"Just because someone's licensed doesn't mean they're going to be ethical or going to perform quality work," said Jody Costello, of ContractorsfromHell.com.

One example is a general contractor receiving the first progress payment, for pouring of the concrete slab, and then not paying the subcontractor responsible for the work.

According to Scholefield, the homeowner has paid the general, however, that homeowner technically still owes the unpaid subcontractor money.

As a result, the unpaid subcontractor can put a lien on that home.

To avoid this, Scholefield recommended a homeowner obtain 20-day preliminary notices from all material suppliers and subcontractors.

A preliminary notice establishes the right of subcontractors to file a lien.

If the subcontractor is paid within the appropriate timetable the preliminary notice has no legal effect.

If a lien is filed on your home, Scholefield said to first call an attorney, as a lot of subcontractors will use liens to scare a homeowner into paying extra money.

Because the rebuilding process will likely take two years for the typical homeowner, other keys to a successful project include staying organized and educated throughout.

According to Ilco, fire victims from the Cedar fires found one thing they all needed was a file holder they could carry around, which would hold all construction related documents.

Bishop reminded the homeowners in attendance to always call the California Department of Insurance, the district attorney's office or the state licensing board with any questions during rebuilding.

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