How to pick a good CA home contractor when ready to rebuild
A wildfire just burned through your community, destroying your home and all your possessions. You’ve gotten a massive insurance payment. You want nothing more than to rebuild and quickly get back into the home you lost.
Then again, so do all of your neighbors. At the same time, California is in the middle of trying to build itself out of a massive housing shortage.
Finding a reputable homebuilder can be a daunting prospect even in the best of times, but it’s become extra challenging for those displaced by the wildfires destroying forested communities in California every year.
Wildfire survivors — homeless, desperate and many holding insurance payouts that dwarf their life savings — are vulnerable to inexperienced builders who can’t deliver what they promise or even fraudsters offering too-good-to-be true sales pitches.
The Sacramento Bee’s Ryan Sabalow and Dale Kasler learned how easily a rebuild can turn into a contractor horror story as they investigated two companies whose owners have a long history of problematic business dealings. Those companies took hundreds of thousands of dollars from Paradise wildfire survivors and failed to finish their homes.
In their reporting, it became clear to The Bee’s reporters that — even with recent changes in state law intended to make it harder for builders to prey on vulnerable fire survivors — it is still largely up to individual customers to do their homework and pick a reputable contractor in order to fend off trouble before it happens.
Sabalow and Kasler spent five months researching contractor fraud and conducted dozens of interviews with fire victims, prosecutors, regulators, experts, builders and other officials.
Based on their reporting, here are some tips for survivors of any California natural disaster to avoid ending up with homebuilder horror stories of their own.
How to find a reputable contractor
▪ Ask to see the contractor’s state-issued “pocket license,” or, in the case of a remodel, the registration of the contractor’s “home improvement salesperson.” Ask for a photo ID to confirm they are who they say they are. Be leery of builders who can’t produce a license, and of builders who say they are relying on the license of a business partner.
In Paradise, the problem companies’ owners didn’t actually have licenses, but they used the licenses of builders working under them to pull permits and to start work before building suddenly stopped. Under California law, only a licensed contractor is allowed to enter into a contract with a property owner, said Joyia Emard, spokeswoman for the Contractors State License Board.
▪ Run the contractor’s name through the Contractors State License Board website. Make sure the contractor has a current license and is insured and bonded. Look for a history of suspensions, terminations or other disciplinary action. You can check by the company’s name, the names of its employees and by its license number.
▪ Be skeptical of anyone promising to do the job significantly cheaper or sooner than what other contractors in the area are offering. One of the key red flags for some customers who got into bad deals in Paradise was going with a builder who promised they’d be in their homes within a few months, far sooner than the standard rebuild time. That builder also promised to supply their homes at a fraction of the going rate. Remember the old saying: If it sounds too good to be true, it probably is.
▪ Shop around and get multiple bids. Rebuilding your home is one of the most important decisions and largest financial investments you’ll ever make. Just like undergoing a potentially fatal surgery, you should always seek a second or a third opinion before going under the knife.
▪ Ask the contractor for references and actually check them. If they can’t provide at least three satisfied former clients who are happy to talk to you, that’s a red flag and a potential sign someone is inexperienced or is leaving a trail of bad deals behind them.
▪ Google the contractor’s name and business and look for news articles about them. You never know what you might find. One of the builders in Paradise accused of taking money from clients and not finishing homes has a history of white-collar crime. Newspaper articles about his criminal past, including one published as recently as 2016, were on the internet just waiting to be found.
▪ If you or someone you know has the ability to run a contractor through an online background check, do it. There are a number of reputable sites, such as LexisNexis, that, for a fee, can provide basic information from national public records about someone’s bankruptcies, criminal histories, liens and judgments.
▪ Don’t do anything on a handshake. Get a written contract that spells out the scope of the project, including cleanup and debris removal, as well as building materials.
▪ Check with your local building department whether your project needs permits. If so, confirm that the contractor will obtain them.
▪ Don’t make a down payment that exceeds $1,000 or 10% of t
he project cost, whichever is smaller. If your contractor presses you for more money up front, you should probably find another builder. The cap on upfront costs is a state law designed to protect consumers from contractors who might abandon a job after taking the cash.
“They could walk away,” said Ernest Brown, a San Francisco construction-law arbitrator and mediator. “You never want the contractor to be ahead of you.” Until 2021, this law applied to “home improvement” projects. It’s now been extended to include complete rebuilds following major disasters such as wildfires.
This story was originally published April 28, 2022 5:00 AM.
BEHIND OUR REPORTING
Why did we report this story?
Practically every year, a massive wildfire destroys one of California’s forested communities, leaving hundreds if not thousands of people homeless. When the smoke clears, the rebuilding phase can be a time of financial vulnerability for desperate wildfire victims, many of whom are holding insurance payouts larger than their life savings. The stories Camp Fire victims tell of handing over hundreds of thousands of dollars to problematic builders who failed to complete their homes serve as cautionary tales.
Where did the idea come from?
In November, Sacramento Bee reporter Ryan Sabalow got an email with an alarming subject line: “Camp Fire Survivors — Victims Again.”
It came from Chico lawyer Jennifer Ellingson, who had been working with Camp Fire survivors in Paradise. The survivors claimed builders had taken huge sums of money from them but had failed to rebuild their homes. Some of them had already begun telling Redding-based TV station KRCR about their frustrations.
Ellingson’s email triggered a five-month Bee investigation into the people behind two of those companies, Aurora Ridge Homes and Cubic Quarters. The investigation revealed that the people behind these companies had a history of business dealings where money went missing or wasn’t repaid and the courts got involved.
How did we report it?
Sabalow and reporter Dale Kasler conducted dozens of interviews, reviewed hundreds of pages of court documents and other public records, did some social media sleuthing and enlisted the help of a retired FBI agent.
Uncovering the lengthy criminal history of Jay Soderling, the founder of Aurora Ridge Homes, was a relatively simple matter. Kasler read decades-old news accounts from his trials and reviewed hundreds of pages of criminal court records and transcripts of congressional hearings about his role in the 1980s savings and loan crisis. Documents also showed that Soderling and his wife Jessica, who worked with her husband at Aurora Ridge, had been convicted on tax charges in 2015.
It was trickier to learn more about Tricia Cohen, the owner of Cubic Quarters. As far as The Bee could learn, Cohen has never been charged with a crime. “Patricia Cohen” also is a common name that made using background check search programs or searching social media a challenge. Most of her customers in Paradise never actually met her in person, and it’s unclear where she actually lives.
But her customers in Paradise shared with The Bee emails and phone numbers that she’d been using to contact them. Using that information, Jim Ellis, a retired FBI agent and certified fraud examiner from Texas whom Sabalow interviewed, was able to run a background check that provided a comprehensive list of her and her ex-husband’s history of court judgments. They totaled at least $736,111 in judgments issued between 2006 and 2008. The records also revealed that in 2007, the IRS put a $190,905 tax lien on the Cohens’ homes in Florida and Nevada.
Sabalow began pulling court records from the judgments awarded against Cohen in Washington state, Nevada and Florida.
Who did we speak to?
The Bee used court documents to track down three of Cohen’s former investors.
In interviews, they told The Bee that a woman they knew as Patty Cohen and her former husband, Michael, took their investments in deals involving shipments of Chinese products and never returned their money.
The failed business deals were remarkably similar to the pitch the woman calling herself Tricia Cohen was making to fire survivors years later in Paradise. She claimed to have a line of prefabricated homes made in China that would arrive in shipping containers.
Finally, to confirm it was the same Patricia Cohen behind the various failed business deals, The Bee received photos pulled from Cohen’s social media accounts before they were set to private or deleted. A Camp Fire survivor who met her in Paradise confirmed to The Bee the woman in the picture was indeed Cohen. So did two of her former business partners from years earlier — the ones who obtained court judgments.
The Cohens and Jay Solderling didn’t return messages from The Bee. Jessica Soderling hung up the phone when contacted for this story.