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Construction scam costs property owner

Press Photo by Katherine Grandstrand Bill Andrus, left, speaks with Lon Johnson of Northern Improvement Co. in North Dickinson on Thursday about work the company was doing to repair improper asphalt that was laid by a traveling company claiming to be Bismarck based, but was actually out of Fort Worth, Texas.

Consumer beware. Scams aren't limited to door-to-door magazine sales or over-the-phone schemes. As the demand for construction work increases with North Dakota's short season, so do those trying to take advantage of home and business owners in need of updates and repairs.

A busy construction season last year prompted Bill Andrus to waive his first choice to do some paving work at All Season Storage in the spring and go with an asphalt contractor he did not know.

"This guy called on the phone, he just said that, 'I'm out at your place and we put asphalt in,'" he said. "We wanted to get some asphalt done and we had another contractor -- which is a good one. ... So I met the fellow out there, and he said they're out of Bismarck and I thought 'Bismarck, that's not too bad.'"

The business card the man handed him said the company was called Asphalt Maintenance and Construction, had a Bismarck address and phone number on it, and a line about doing business in Bismarck for more than 30 years.

Andrus did his homework, and found out that the company was registered with and North Dakota contractor's license. The man had a bit of a drawl when he spoke, but explained that it was because he went to school in the South.

Andrus went to check with Northern Improvement to see if there was any way they would be able to do the work, but their schedule was full through the summer.

"I called the guy back and I said, 'Maybe would could meet out there and discuss a price,'" he said.

They did not draw up a contract before the work began.

"Even if you do everything right -- checking out this and checking out that, they're still here," Andrus said.

Andrus wanted the crew to create a slope for water to drain away from the storage units, down the hill and into the ditch.

"We wanted to get the water away from the buildings as quick as we could with the snow," he said. "Keep it down low and a good slant."

When the work was done, he expected it to be approximately 3 inches thick and packed tight. The work Andrus got was an inch and a half to two inches thick and loose.

"Obviously, I got concerned," he said. "So I ended up doing all kinds of checking, I figured 'I'll check these guys out.' So I looked. They have three names written on the card, so I looked in Bismarck, there wasn't one of their names in the phone book. And then I'm -- what the heck is going on?"

The crew scraped his building and he is working with his insurance company to get those repairs covered, but the asphalt company is denying ever having done work for him.

"Do your homework and take your time," said Doreen Riedman, executive officer of the North Dakota Association of Builders. "People shouldn't be in a hurry to get those big projects done, rather wait for the people you know you can trust."

There are nearly twice as many contractors licensed with the state as there were a few years ago, she said.

"The biggest thing is know who you're working with," Riedman said. "Don't just take the cheapest person or the lowest bid because a lot of times, these are big projects we're talking about."

Checking with state licensing agencies is a good place to start, but going above and beyond in vetting a company -- especially one new to the area -- can save time, money and stress down the road.

"They arrive quickly on the scene, they go farmstead to farmstead or ranch to ranch or rural home to rural home in particular," said Parrell Grossman, assistant North Dakota attorney general and director of the Consumer Protection and Antitrust Division of the North Dakota Attorney General's Office. "Often times they will suggest that they did a job for the neighbor and they have some leftover paving materials and that consumer can benefit from a great price for those reasons."

Not only should a contractor's license be checked, but they should be able to provide references, even if the company has come in from out of state.

"Have the contractor provide information about the type of work that they've done," North Dakota Secretary of State Al Jaeger said. "Even if they're from out of state, they should be able to provide references from their home state in terms of the work that they've done. Somebody that is above board and honest should be more than willing to do that."

The company Andrus hired, with the Bismarck-based business card, was actually from Texas.

There are no tests required to obtain a contractor's license with North Dakota.

"The contractor license isn't just for building houses," Jaeger said. "To devise a test that is unique to a specific part of the construction industry I think would be somewhat challenging.

"If it was something that was implemented we would need to have more staff. We would have to be set up a whole lot differently than we are now."

It takes more than one complaint to revoke a license, he said.

"We do occasionally find that that's a two-way street," Jaeger said. "The contractor in fact has gone over and above to try to correct the concerns and they're just not making -- there's no making the people happy."

Andrus has filed a complaint with Grossman's office in addition to the claim with his insurance.

"A lack of any complaints on file against the contractor in the Secretary of State's Office or the Attorney General's Consumer Protection Division does not indicate that that is a reliable or trustworthy contractor."

Needing payment upfront or shortly after work is done is one sign of a scam, Grossman said.

All bids, estimates, warranties and agreements need to be done in writing, he said. North Dakota law allows consumers solicited at their homes three days to cancel any contracts they should enter.

Andrus paid the first company $15,000 for the work it did -- a check for $10,000 that could be cashed right away and a second, post-dated check for $5,000 to be cashed the following week. The $5,000 check was cashed the following day in Bismarck.

He is now paying the company he wanted to do the job in the first place, Northern Improvement, to tear up the bad asphalt and do the job the way he wanted.

"The attorney general is very aggressively pursuing contractor fraud in the state of North Dakota," Grossman said. "On a weekly basis we are entering into or taking legal action, which often turns into settlement agreements for unlicensed contractors that have taken advanced payments and have failed to do the work."

Katherine Grandstrand
I graduated from Bemidji State University in 2007 with a bachelor's degree in mass communcations, from Columbia College Chicago in 2009 with a master's degree in journalism.  
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