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Why Cash Deals With Virginia General Contractors Can Be Dangerous

Most homeowners would jump at the chance to secure a good deal, especially in these tight economic times. But when it comes to hiring Virginia general contractors to look after your home renovation, addition or remodel, cash deals can put you in a surprising amount of danger. Find out why these under the table arrangements really are too good to be true.

Assumptions About the Advantages of Cash Deals

Many homeowners assume that a cash deal presents no risk to them. The contractor is simply operating “under the table” to avoid paying income tax. Homeowners also assume that they are saving money by avoiding any state or sales tax. But the reality is that much more is happening during a cash deal, especially when that transaction involves home renovations.

Cash deals are generally un-receipted work, which means that no paperwork is issued and no proof that any particular contractor completed the work exists. This also means that no warranties are in place – neither the workmanship nor the materials are under warranty (unless the homeowner has paid for the materials separately and keeps the receipts). In this way the contractor is avoiding any legal action or service calls in regards to substandard work.

Insurance Coverage Nullified

Homeowners may have trouble obtaining insurance with no receipts to show for the completed renovation work. They may be able to claim that some of the project involved DIY work, but with plumbing, electrical and mechanical work involved that clam could pose a serious problem.

Cash deals often skip the building permit stage as well, since that adds to the cost and also leaves a paper trail (something most under the table Virginia general contractors want to avoid). But your insurance company may cry foul with no building permits issued and coverage could be denied or refused in the case of damage.

In some cases a house sale has been held up or overturned due to the lack of building permits or proper home insurance. Any money saved on the cash deal seems small in comparison to the cost of these hassles.

Beware of Cash Deal Contractor Business Practices

You may be tempted to hire a casual contractor for your Virginia home improvement project. But before you count up any dollars saved, be sure you investigate whether or not that contractor has the proper insurance and safety procedures in place. If not, you could be on the hook for some serious damages should an accident occur.

Liens may also be in place on the materials for your project. If the renovation is large enough, those liens can represent thousands of dollars and the homeowner may be responsible for those dollars should the contractor default on supplier payments. Usually professional and established general contractors will issue a contract spelling out liability and waiving the homeowners from any responsibility for defaulted payments on the contractor’s accounts.

It may seem like that cash deal will save you a lot of money, but if you are not dealing with experienced Virginia general contractors in a professional and legal manner you run some serious risks. Keep it on the up and up and enjoy better peace of mind during your home improvement project.

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From 2006-2018, Paragon Remodeling, Inc. received national recognition as a Top Remodeler by Qualified Remodeler Magazine for their outstanding home remodeling and construction services in Northern Virginia, Maryland and Washington, DC.

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