New homes are under construction in Spanish Fork on Tuesday, July 16, 2024. (Photo by Spenser Heaps for Utah News Dispatch)
State officials have received thousands of complaints related to residential construction fraud in the last several years, a problem the Utah Department of Commerce says has cost residents a combined $32 million.
On Monday, the state announced a new task force bringing together officials from the department, the attorney general’s office, lawmakers, industry representatives and law enforcement to fight the growing problem, which experts say is a byproduct of the state’s rapid growth and new construction.
Residential construction fraud is a broad term that can include contractors not finishing work they were paid to do, false invoicing (when contractors submit invoices for work they didn’t do), manipulating the bidding process, or lying about qualifications or licenses.
SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
According to the Utah Insurance Department, roofing companies have been known to canvas neighborhoods after a storm or disaster offering a free inspection, only to intentionally damage or misrepresent the extent of damage to a home. Plumbers might refer homeowners to a mitigation company to inspect water damage, ask the homeowner to sign a contract up front, then recommend repairs that go beyond the homeowner’s insurance coverage.
Those are just a few examples of the schemes that, according to the Division of Consumer Protection, are costing Utahns millions. During new construction, the division says these schemes can result in an average loss of $302,000 per customer.
In 2024, the Utah Division of Professional Licensing received at least 2,146 construction-related complaints; so far this year, it’s already processed 1,047 additional complaints. In three years, Utahns have lost a combined $32 million stemming from construction-related complaints, the division says.
The task force announced this week will be composed of various law enforcement officers, industry representatives, prosecutors, officials from the Utah Divisions of Professional Licensing and Consumer Protection, the Utah Attorney General’s Office, Sen. Cal Musselman, R-West Haven, and Rep. Thomas Peterson, R-Brigham City.
“As a building official by profession, I’ve seen firsthand how construction fraud erodes the very foundation of trust essential for a stable housing market in Utah,” said Peterson in a statement. The Brigham City Republican currently works for the state as a building official with the Utah Division of Facilities Construction and Management, according to his conflict of interest form.
“Construction fraud is a direct threat to our efforts to put homeownership back in reach for our kids and grandkids,” said Musselman, who works in real estate sales and management, in a statement.
The task force will focus on “aggressive” enforcement of Utah fraud laws, using the state’s dedicated construction fraud prosecutor. It will also launch an education and outreach campaign to “equip consumers with guides and best practices, provide compliance training for industry professionals, and train local prosecutors to handle construction fraud cases effectively.”
SUPPORT: YOU MAKE OUR WORK POSSIBLE
And, the task force will consider regulatory reform, researching laws in other states, collaborate with industry groups, identify gaps in Utah code and draft new rules for state regulators.
“The Task Force’s work to root out construction fraud is an essential piece to bringing affordable housing to Utah,” said Steve Waldrip, the governor’s senior advisor for housing, strategy, and innovation, in a statement. “It fosters the trust needed for people to confidently hire quality contractors, especially when investing in and improving older, more affordable homes.”
The Department of Commerce also recently created a new Utah Residential Construction Agreement, a contract template for homeowners and contractors intended to define project details and expectations, and protect against fraud.
The agreement is “designed to empower homeowners and licensed professionals. This resource can be used to fill in the blanks for a new agreement or as a comprehensive point of reference to ensure an existing contract is solid.”
For more information on the agreement, visit the Utah Division of Professional Licensing’s website.
Comments