Moving to the Dallas - Fort Worth Metroplex? Get your answers and make your buying decisions easy by using our resource guide.
| Remodeling |
If your homestead improvement exceeds $5,000 in cost, the contractor is required by law to deposit your payments in a construction account at a financial institution. Ask the contractor for written verification of the existence of the construction account. Monitor deposits and disbursements to subcontractors, laborers and vendors. Access to the account record should be included as a requirement in your written construction contract.
Paying for the Work
It is normal for a contractor to ask for partial payment in advance, and provided that you have taken the precautions recommended above, you should expect to provide a part of the cost before the work begins. However, it is notorious that scammers involved in door-to-door rip-offs will ask for payment in full in advance, and then abscond without completing (sometimes without even starting) the job.
Even with a reputable business and a sound written contract in place, you should not pay in full until the work is complete and you have inspected it yourself and found it satisfactory. A partial payment schedule will usually specify what part of the job has been done when a partial payment is due. Inspect the work and make sure the contractor has met the schedule before you make your payment.
If you are asked to sign a certificate of completion, do not do so until all the work is completely finished, the site is cleaned up, and you are satisfied.
If the job is expensive enough that you will need to finance it, be sure to shop around for the best terms on the financing. This is separate from taking bids on the cost of the work. In choosing your source of financing, you will be concerned with the rate of interest, finance charges and the terms of the pay-out. As with any financing agreement, you should calculate the entire cost of interest and charges over the term of the loan.
A home improvement company may offer financing, but this is not necessarily the best option, even though it may seem easy to arrange the financing and the work contract at the same time. Be aware that some contractors will have you sign a credit contract to pay a certain price for the work plus a finance charge, then immediately sell the right to collect on the contract for 20 percent to 50 percent less than the contract price. That usually means you could have gotten the work done for 20 percent to 50 percent less by paying cash or arranging financing yourself.
If you are asked to sign a credit check application, read the form carefully and make sure it does not bind you to anything. Make sure it really is a credit check and not a contract. If you do not understand everything in the document, do not sign it until you have had someone else explain it to you.
Mold Remediation
Not all water and mold damage is covered by your residential property insurance policy. Most of the homeowner’s insurance policies sold in Texas are known as HO-A policies. In general, HO-A policies only cover sudden and accidental water leaks and do not cover damage resulting from continuous or repeated leakage. Many do not cover remediation of mold; those that do generally have a cap on coverage.
The other principal type of policy, commonly offered in Texas in the past, is referred to as HO-B. HO-B policies pay for the full replacement cost of the structure of your home, except for items specifically excluded. Few insurers in Texas are now offering HO-B policies.
Some homeowners who have filed claims for mold or water damage later experience difficulty in renewing or obtaining new insurance coverage for their homes. Contact the Texas Department of Insurance (TDI) for possible assistance if you have difficulty finding an insurer. In general, your insurer must begin an investigation within 15 days after you file a written claim. The company may ask you for more information, and has another 15 days after you send the information before it must accept or reject the claim. If the company agrees to pay the claim, it must do so within five days. If the company rejects the claim, it must give you the reasons in writing.
It is common for an insurance settlement check to be made out to both the homeowner and the mortgage company. Some mortgage companies will endorse the check to the homeowner, leaving the homeowner to arrange for remediation. Otherwise the lender usually uses the insurance checks to pay the contractor, with an inspector monitoring the work and releasing payments. Consult with your mortgage company about how involved it will become with the remediation work. If the company oversees the work, you should still understand who is responsible for ensuring the job is done properly, and the extent of your liability. Remain active in this process.
Remediation is more than just repairing damage caused by mold. It involves the process of evaluating the situation before repair work begins. It also involves removing and cleaning items contaminated with mold, treating potentially affected areas, and ensuring that mold does not reoccur.
All non-exempt mold assessors and remediators must be licensed by the Texas Department of State Health Services (DSHS). A person may hold licenses, but may not do both jobs on the same project. In addition, a person may not own an interest in both firms that do the assessment and the remediation on the same project.
Remediators must keep a record of all jobs they did over the last three years. This record must include before and after photos of the contamination scene, the written contract for remediation and all job-related invoices. The remediator is required to give the homeowner a copy of all photos included in the project record.
Paying for the Work
It is normal for a contractor to ask for partial payment in advance, and provided that you have taken the precautions recommended above, you should expect to provide a part of the cost before the work begins. However, it is notorious that scammers involved in door-to-door rip-offs will ask for payment in full in advance, and then abscond without completing (sometimes without even starting) the job.
Even with a reputable business and a sound written contract in place, you should not pay in full until the work is complete and you have inspected it yourself and found it satisfactory. A partial payment schedule will usually specify what part of the job has been done when a partial payment is due. Inspect the work and make sure the contractor has met the schedule before you make your payment.
If you are asked to sign a certificate of completion, do not do so until all the work is completely finished, the site is cleaned up, and you are satisfied.
If the job is expensive enough that you will need to finance it, be sure to shop around for the best terms on the financing. This is separate from taking bids on the cost of the work. In choosing your source of financing, you will be concerned with the rate of interest, finance charges and the terms of the pay-out. As with any financing agreement, you should calculate the entire cost of interest and charges over the term of the loan.
A home improvement company may offer financing, but this is not necessarily the best option, even though it may seem easy to arrange the financing and the work contract at the same time. Be aware that some contractors will have you sign a credit contract to pay a certain price for the work plus a finance charge, then immediately sell the right to collect on the contract for 20 percent to 50 percent less than the contract price. That usually means you could have gotten the work done for 20 percent to 50 percent less by paying cash or arranging financing yourself.
If you are asked to sign a credit check application, read the form carefully and make sure it does not bind you to anything. Make sure it really is a credit check and not a contract. If you do not understand everything in the document, do not sign it until you have had someone else explain it to you.
Mold Remediation
Not all water and mold damage is covered by your residential property insurance policy. Most of the homeowner’s insurance policies sold in Texas are known as HO-A policies. In general, HO-A policies only cover sudden and accidental water leaks and do not cover damage resulting from continuous or repeated leakage. Many do not cover remediation of mold; those that do generally have a cap on coverage.
The other principal type of policy, commonly offered in Texas in the past, is referred to as HO-B. HO-B policies pay for the full replacement cost of the structure of your home, except for items specifically excluded. Few insurers in Texas are now offering HO-B policies.
Some homeowners who have filed claims for mold or water damage later experience difficulty in renewing or obtaining new insurance coverage for their homes. Contact the Texas Department of Insurance (TDI) for possible assistance if you have difficulty finding an insurer. In general, your insurer must begin an investigation within 15 days after you file a written claim. The company may ask you for more information, and has another 15 days after you send the information before it must accept or reject the claim. If the company agrees to pay the claim, it must do so within five days. If the company rejects the claim, it must give you the reasons in writing.
It is common for an insurance settlement check to be made out to both the homeowner and the mortgage company. Some mortgage companies will endorse the check to the homeowner, leaving the homeowner to arrange for remediation. Otherwise the lender usually uses the insurance checks to pay the contractor, with an inspector monitoring the work and releasing payments. Consult with your mortgage company about how involved it will become with the remediation work. If the company oversees the work, you should still understand who is responsible for ensuring the job is done properly, and the extent of your liability. Remain active in this process.
Remediation is more than just repairing damage caused by mold. It involves the process of evaluating the situation before repair work begins. It also involves removing and cleaning items contaminated with mold, treating potentially affected areas, and ensuring that mold does not reoccur.
All non-exempt mold assessors and remediators must be licensed by the Texas Department of State Health Services (DSHS). A person may hold licenses, but may not do both jobs on the same project. In addition, a person may not own an interest in both firms that do the assessment and the remediation on the same project.
Remediators must keep a record of all jobs they did over the last three years. This record must include before and after photos of the contamination scene, the written contract for remediation and all job-related invoices. The remediator is required to give the homeowner a copy of all photos included in the project record.
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