Tips to Protect Yourself From a Fraudulent Roofing Contractor

How to Check Out a Roofing Contractor for Fraudulence

At Colorado Roofing Association, we understand that a new roof is a big investment. With that in mind, it is important that you are getting what you pay for. When choosing a roofing contractor for the job, making sure that they are legitimate will ensure that your investment is in good hands and is much more likely to deliver satisfactory service. Keep reading to learn more about our top tips for how to check out a roofing contractor for fraudulence.

1. Check Their License, Claims, and Insurance 

Licensing

In Colorado, roofers are not licensed at the state level. So, roofing contractors must be licensed or have a roofing permit with each city or county where the work is to be performed. Verify your contractor’s license at the town/city level or county level. You can also search the specific business in the Colorado Business Database Search, which shows each company’s records and status – make sure they are in good standing. You can ask for a copy of all of these documents to keep for your records.

Claims About Business

You may also wish to check their claims of how long the company has been in business; to do so, check with the Colorado Secretary of State. You want to make sure that they have held their business continuously for the amount of time that they claim. For example, if a contractor claims to have 20 years of experience but has started and closed several companies over that time, they might be using legal tactics to avoid paying bills and/or subcontractors and to avoid responsibilities to customers.

Workers Compensation and Insurance

Don’t proceed without the contractor’s proof of workers' compensation and general liability insurance. Check with the insurance company to see if it’s still in force and if the contractor is endorsed for roofing work. Be suspicious of those that are not 100% transparent about their level of protection. It’s important to always ask for verification from the company’s insurance provider. It’s not good enough to see a printed document as this can be easily altered. Any reputable roofing contractor should be willing to have their insurance agent send documents to you directly, usually via email. Verify the contractor’s workers' compensation coverage here. 

Commitment to Ethical Practices at CRA

All of the contractor members that are part of the Colorado Roofing Association must have a business license showing that the company has been in operation for a minimum of two years, issued by a Colorado municipality or jurisdiction that requires a test for licensing, or a roofing contracting license issued by two Colorado municipalities that do not require a test for licensing. They must have documentation of current Colorado Workers Compensation Coverage and a certificate of insurance showing general liability protection of at least $500,000.00. Members also must sign a Code of Ethics upon joining and renewal each year. Search for a CRA contractor member to ensure you are using services guaranteed to be legitimate. 

2. Ask For Referrals 

One of the best ways to find a roofing contractor is through word of mouth. Ask your friends and neighbors about the contractors they have used to ensure they have had a satisfactory experience in the past. 

You can also do your own research by calling contractors for estimates. Make sure they include cost, type of material, and payment terms. Do not make any verbal agreements. Check with the Better Business Bureau to make sure the contractor does not have any complaints filed against them.

3. Be Smart About Signing 

Understand that anything you sign, no matter what you are told, is a binding contract. Don’t sign a contract that does not contain the following written items per Colorado Revised Statute 6-22-103 (p.194-195).  A written & signed contract between the property owner and the roofing contractor must include at least the following:

• scope of work & materials to be provided
• cost for same based on damages known at the time the contract is entered into
• approximate dates of service
• roofing contractor’s contact information
• identification of contractor’s surety & liability coverage insurer & their contact information
• contractor’s policy regarding cancellation of contract & refund of any deposit including a rescission clause allowing the property owner to rescind the contract for roofing services and obtain a full refund of any deposit within 72 hours after entering the contract
• a statement that if the property owner plans to pay for the roofing services through an insurance claim, the contractor cannot pay, waive or rebate the homeowner’s insurance deductible in part or in whole
• a statement that the contractor shall hold in trust any payment from the property owner until the contractor has delivered roofing materials to the job site or has performed a majority of the roofing work on the property
• a statement that the property owner may rescind a contract for services, the payment for which will be made from the proceeds of a property insurance claim, within 72 hours after receiving notice from their insurer that the claim is denied in whole or in part

Along with these requirements, a contract also must have a price, so do not sign one that does not list a specific price – make sure to avoid vague phrasing. If a price is stated, be wary of low bids, as the contractors may cut corners in order to make a profit. To continue reading about how to spot fraudulent roofers, check out our guide.

Also expect materials delays. Most roofers were on the job during the pandemic. Unfortunately, the manufacturers they rely on were not. As a result, the existing inventories of roofing products disappeared from the supplier’s shelves. This created one of the biggest backlogs for roofing contractors and countless roofing projects were and continue to be delayed. Contractors will still be able to give you a proposal based on current prices, but now most contracts include a provision that should the price of materials increase between the date of the proposal and the time when the affected material is delivered, the proposal/contract price will also increase by such amount.  

While it is a lengthy and effortful process, it is worth your time to learn how to check out a roofing contractor for fraudulence and do the research necessary to ensure you will get a legitimate and quality contractor. Check out our full guide for selecting a professional contractor, or search for a certified CRA contractor to secure an exceptional roofing experience.