Washington homeowner loses $32,000 to siding scam, then qualifies for $25,000 from state fund

A Tacoma homeowner who took recommended precautions by obtaining multiple bids and hiring a registered contractor still lost a $32,000 down payment for siding work that never began. However, a new state recovery fund has approved a $25,000 reimbursement, helping to take some of the financial sting out of the contractor's scam.

Here's what to know

Five approved applicants have received more than $115,000 combined in the first payouts from Washington's Department of Labor & Industries' new program, according to KIRO 7 News Seattle. Eligible property owners can receive up to $25,000 each from the fund to help cover losses involving registered contractors.

Tacoma homeowner Dan Morrill was looking to have the siding replaced on his century-old home and solicited multiple bids, including one for $75,000. However, after Morrill made the $32,000 initial payment, work never began, with the contractor apparently stealing the funds. 

The contractor defrauded dozens of property owners, including Morrill, whose siding project went untouched for months, L&I said, per KIRO. Morrill secured approval for the fund's maximum reimbursement of $25,000 after applying in August.

More background

The program opened July 1 under a 2023 state law aimed at strengthening consumer protections. Fines and penalties imposed under Washington's Contractor Registration Act finance the fund, which helps qualifying homeowners recover losses incurred due to registered contractors.

Morrill hasn't been the only homeowner to be scammed by a registered contractor. Spokane homeowner Marina Ivankov saw her contractor disappear after she put down almost $70,000 for an outdoor pool and spa installation. Ivankov was also among the recovery fund's first approved applicants, receiving $25,000 in compensation.

Who is eligible? 

L&I's eligibility rules require homeowners to have hired a contractor registered with the department and to live in the home where the work was planned. Additionally, applicants must file a civil case in superior court and obtain a final ruling against the contractor. The homeowner then has 90 days following the judgment to submit their reimbursement applications. 

After reimbursing homeowners, L&I replenishes the Homeowner Recovery Fund by pursuing contractors for the court-awarded amount plus accrued interest. The recovered money then can be used to assist other eligible property owners.

In order to help reduce the likelihood of being scammed, homeowners should seek multiple bids when hiring a home improvement contractor and withhold full payment until the work is complete.

Where can I learn more?

Contractor disputes have left homeowners everywhere facing unfinished repairs and steep bills. These stories cover some other examples. 

• A homeowner said a contractor left gaps in steps and charged extra for siding.

• Florida's attorney general sued a contractor accused of taking $1 million from 80 homeowners.

• In Canada, a 76-year-old paid a roofer $25,000, then ended up roofless and fighting insurance.

• An Oklahoma family said a contractor's work failed inspection after they paid $60,000, then received free help.

• Colorado homeowners signed over insurance checks before the BBB gave their roofer an 'F.'

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