Does your builder stack up?

Flickr photo by a L p.

In case you hadn't noticed, we live in uncertain times.

For homeowners who are in the enviable position of being financially confident enough to build a custom home or undertake a major remodeling project -- and they're still out there -- the economy has nonetheless manufactured an additional layer of anxiety: Setting aside concerns about construction competence, the question of the hour is whether the builder/contractor of choice is financially able to see a project through to completion.

It's tough to gauge how many builders and major contractors have been struck down in the Great Recession. However, the National Association of Home Builders said in January that its membership had fallen 15-20 percent from its 2005 peak of more than 200,000. And the residential construction industry has lost more than 3 million jobs. 

Obviously, many builders are surviving the housing downturn and relatively few end up with clouds over their reputations for failing to pay their subcontractors.

But how is a consumer to know whether a builder will fold three months into a six-month project? Or that even after a job seems "completed," the homeowner may learn that suppliers and subcontractors have placed liens on the home because the builder didn't pay them?

"Unfortunately, there is no ironclad check, in spite of all the research you do," said Jim Rabbitt, director of the Wisconsin Bureau of Consumer Protection. "But every check you do is worth doing, I will tell you that."

Construction-law attorneys and consumer advocates say consumers can set up some contractual safeguards and undertake some background-check measures that at least might flush out red flags.

Follow the legal trail

Rabbitt said that Wisconsin, among other states, publicly posts records of lawsuits and other legal actions online. In his state, for example, the Consolidated Court Automation Program links the public to the activities of its circuit-court system at www.wicourts.gov. ...CONTINUED

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