(DES MOINES, Iowa) A Minnesota-based home repair and contracting business and its owners have agreed to comply with Iowa’s Door-to-Door Sales Act, following a lawsuit filed by Attorney General Tom Miller.
District Court Judge Michael D. Huppert issued a consent judgment last week in Polk County District Court against Tierney Brothers Construction, L.L.C., of Ramsey, Minnesota, and its owners, Sean and Tracy Tierney. The defendants entered into a formal settlement after Miller alleged that the defendants violated both Iowa’s Door-to-Door Sales Act and the Iowa Consumer Fraud Act. The defendants deny the allegations.
Tierney Brothers Construction, which is incorporated and headquartered in Minnesota and is registered as a contractor in Iowa, was conducting business in Iowa from a hotel room in the Des Moines area. As part of its advertising efforts, Tierney Brothers offered to provide free repair estimates to homeowners in communities which had suffered storm damage. The advertising, the lawsuit alleged, falsely claimed that Tierney Brothers was contacting consumers “in accordance” with the “Iowa Insurance Commission.” There is no such state agency, and the Iowa Insurance Division, which is a state agency, was not working in conjunction with Tierney Brothers, L.L.C.
Tierney Brothers finalized and signed contracts at consumers’ homes and away from its primary place of business, and such contracts are regulated by Iowa’s Door-to-Door Sales Act. These contracts, the lawsuit alleged, failed to disclose and provide consumers’ written and oral rights to cancel, and misrepresented or failed to honor valid cancellations.
The lawsuit also alleged that the defendants represented to consumers that, as part of the services provided under the contract, Tierney Brothers would perform the duties of an insurance adjuster with the consumers’ insurance companies, when the defendants could not legally provide those services. These contracts further forced consumers to accept whatever agreement was reached between Tierney Brothers and the consumers’ insurance companies in regard to the scope of repair work, materials and price, or consumers were forced to pay 25% of the total contract price agreed upon between Tierney Brothers and the consumers’ insurance companies.
As part of the settlement with Tierney Brothers Construction and its principal owners, Judge Huppert ordered the defendants to comply with the Iowa Door-to-Door Sales Act; must not misrepresent their qualifications, training, certifications, licenses, experience or any other material fact to consumers; must not misrepresent affiliations with the Iowa Insurance Division; are forbidden from employing any contract obligating consumers to pay damages for cancelling contracts unless the terms are disclosed before a consumer signs the contract; and agree not to employ any contract depriving consumers of their legal decisions, rights and remedies.
Should the defendants violate the consent judgment, Miller is authorized to request civil penalties of up to $5,000 for each day that the defendants intentionally violate the court order. Miller may also seek a ruling that the defendants are in contempt of court and are subject to additional fines and/or imprisonment.
Follow these tips to avoid being taken by home-repair scams and disputes:
- Don't fall for the "knock-at-your-door" scam where someone shows up “out of the blue” and says your driveway needs repaving, or your house needs new shingles – and they “just happen to have materials left over” at a big discount! They are sure to take your money and run, without doing the job at all or doing it right. [Go to bulletin on Asphalt Paving Scam.]
- Check out contractors before you sign a contract or pay any money. Request local references -- and check them out. Contact the Consumer Protection Division to see if it has complaints (call 515-281-5926, or 888-777-4590.) Contact the Better Business Bureau (515-243-8137, or www.bbb.org.) Check to see if a contractor has been sued by unsatisfied customers (or sued them) -- go to www.iowacourts.state.ia.us.
- Get several written estimates, choose the best, and get a contract in writing. Before any work begins, agree on a written contract detailing work to be done, the price, who’s responsible for permits, and any other terms. Ask for a copy of the contractor's liability insurance certificate. Put start and completion dates in writing, and consequences if the contractor fails to meet them. (Example: the contract could be nullified if the contractor doesn't start on time.) Note, if you sign a contract at a place other than the contractor's regular place of business – such as at your home – you usually have three business days to cancel the contract.
- Avoid paying large sums in advance. If you need to make a partial advance payment for materials, make your check out to the supplier and the contractor. Insist on a "mechanic's lien waiver" in case the contractor fails to pay others for materials or labor.
- Financing. It is usually a better deal and safer to obtain financing through your local bank or credit union, rather than a contractor. If you do arrange financing through the contractor and the papers are signed away from the contractor’s place of business, you usually have three days to cancel the financing. The right to cancel the financing is separate from the right to cancel the home improvement contract.
For more information or to file a complaint, contact the Attorney General's Consumer Protection Division, 1305 East Walnut Street, Des Moines, Iowa 50319. The website is www.IowaAttorneyGeneral.gov. Call 515-281-5926. Outside of the Des Moines area, call toll-free at 888-777-4590.