At this time there are NO licensing requirements for foundation repair contractors. Anybody with a truck and a shovel can call himself a foundation repair contractor. Below are some common situations (scams) you should be familiar with. And we present you with some questions that you can ask your contractor. Remember, just because the salesman says “yes” to a specific question does not mean it is true. Ask for documentation and confirm it is authentic.
Common Foundation Repair Situations (Scams)
1) Corporation Bankruptcy Dodge – This is a scam used by some foundation repair companies to dodge lawsuits, judgements, and negative reviews. When there are too many lawsuits, judgements, and negative online reviews they will simply bankrupt or close the corporation and establish a new one. Nothing has changed except that the owners have “dodged” various lawsuits, claims, judgements, and negative reviews. Ask for documentation about the corporation and the DBA (Doing Business As) and confirm dates. Ask about lawsuits, judgements, and claims. Ask about any other corporate entities that they have used in the last 10 years. Ask your lawyer to vet them – it could save you a massive amount of time, money, and headaches.
2) Payment Upfront – Not a good idea. Don’t do it.
3) Deceptive Practices – Well, we could talk all day about this one because it covers so many topics. In short, if a promise is made then it should be in writing with specific recourse in the event the promise is not fulfilled. Rarely will these contractors put these promises in writing.
4) Forfeit Right to Sue – aka Mandatory Arbitration – a rigged scheme where there is no trial, no judge, no requirement to explain the decision, and no recourse (you can not sue). Most Foundation Repair contractors use clauses in their contracts that require homeowners to use Mandatory (Forced) Arbitration. The homeowner has signed away his / her right to sue the foundation contractor in a court of law for shoddy work or non-performance. Mandatory Arbitration is a “stacked deck” where there is no obligation to follow the law, and as we said earlier, no recourse. Statistics are shocking – the consumer (you) loses 90%+ of all cases. The for-profit arbitration company is hired by your opponent – a cozy, incestuous relationship that virtually guarantees the homeowner (you) will lose.
“If arbitration were in any way beneficial to consumers, it could be made an option and consumers would choose it.”
Richard Alderman, Director, Consumer Law Center, University of Houston Law Center
5) Lifetime Warranty – Some of the newer “lifetime warranties” are not so lifetime. Some of them are not transferable to a new homeowner and some only extend out to 5 or 8 years. Some of the new warranties require the homeowner to pay for the frequent adjustments that must be made to the repair job – a repair job that is failing. If a foundation repair job has failed then why should the homeowner have to pay for frequent adjustments? Doesn’t seem fair to us.