Never pay a residential contractor up front, Atlanta woman learns the hard way
Moral of the story: never pay a residential contractor up front
ATLANTA, Ga. (Atlanta News First) - Over the years, Atlanta News First Consumer Investigator Better Call Harry has been holding residential contractors accountable for not hold up their end of the deal.
Some didn’t finish the work; others didn’t do it right. This time, the contractor took the money - more than $100,000 - and didn’t do any work at all.
On Jan. 9, 2021, an early morning fire destroyed the inside of Victoria Patterson’s city of Atlanta childhood home. State Farm Insurance gave Patterson two claim checks that totaled $131,000.
Patterson hired a contractor that came recommended by a neighbor. Rob McClure owns Smith Bailey Restoration, a home restoration business once recognized by the Gwinnett Chamber of Commerce as a business of the month.
Patterson said McClure wanted her insurance checks upfront.
“I told [Patterson] we can’t do the work unless we get this stuff out of your house,” McClure, who has since closed his office, told Better Call Harry. Over the months that followed, he said rising building prices, combined with clients who owed him hundreds of thousands of dollars, sent his business into a spiral.
“You’re trying to finish out these jobs and profits are disappearing; it’s just vaporizing in front of you because you can’t fulfill your contracts and still make money on the jobs,” McClure said.
One of those jobs was for Stephanie and Danny Holmes. When a tree fell on their Dunwoody home, the couple got references and checked with the Better Business Bureau and their own insurance agent, who recommended McClure.
The Holmes’ gave McClure a $100,000 insurance check upfront. Unlike Patterson, the Holmes said McClure completed almost 95% of the work, but say some unresolved issues remain with some of the work performed by McClure’s subcontractors. The couple has since learned some of those subcontractors have not been paid, and two of them have attempted to place liens on their house but missed a state-imposed filing deadline.
“We don’t know what he did with the money,” said Danny Holmes. “What he didn’t do is pay the subs.”
Not long after we began investigating, McClure filed for Chapter 11 bankruptcy in federal court. He said Patterson’s $131,000 went into his business’ general fund and was used to pay expenses. He told Better Call Harry that if he could pay the money back, he would.
“I was very proud of the work we did as a company,” McClure said. “It’s really tough to be where I am, and I really feel for the people who I couldn’t do what I said I was going to do. It will haunt me for a long time.”
Since the fire, Patterson has been living at an extended-stay hotel paid for by State Farm near Mercedes-Benz Stadium.
State Farm Insurance told Better Call Harry it sympathized with Patterson but also said, “We are not involved in personal financial decisions after the claim payment is delivered.”
Patterson has filed a report with the Atlanta police department. Her home has since been condemned and everything inside has been hauled to a dump.
Here are the takeaways from this story:
Regardless of how reputable a company is, never hand over your insurance claims upfront. Give the company a 10% down payment, with the rest of the payments on a schedule.
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