Construction Fraud

A person has committed the crime of Construction Fraud when they have received an advance (money, merchandise, or other thing of value) to perform construction or improvements on a property and then failed to perform the work. Additionally, that person must have failed to return the advance after given sufficient notice.

• Sufficient notice is defined in §18.2-200.1 of the Code of Virginia. Contractors must be given the opportunity to return the advance before criminal proceedings can be initiated. A certified “15-day demand letter” must be sent to the contractor with return receipt requested.

Before you can report the crime of construction fraud, you must send the 15-day letter!

An example of the 15-day demand letter.(PDF, 3MB)

• Often times, issues with your contractor must be worked out in Civil Court, and not in the Criminal Justice System. These cases are complex and often difficult to prosecute. Generally, the following information will have to be proven in this type of case: 
  • Proof that you paid to have the work done (cancelled check, signed credit card receipt or a cash receipt). 
  • Proof that there was an agreed upon start and completion date for your work. 
  • Proof that a written contract exists. 
  • Finally, you must be able to prove that there was fraudulent intent on the part of the contractor. 
• If you are a subcontractor who was hired to complete a job, and you were not paid, you could be the victim of a crime. The Code of Virginia § 43-13 requires contractors to pay their subcontractors with monies they have received from the property owner. If you believe you are a victim of this crime, file a report. 
  • If a contractor performed some of the work, but did not complete your job, your complaint may be civil in nature; however, it may also constitute a crime. You need to file a report and allow an investigator to review the details to make this determination.

An example of construction fraud is: 

• You give a contractor an advance to make roof repairs. He or she does not perform the work and has failed to return the deposit after the 15-day letter. 

If a contractor completes all of the work, but you are unhappy with the result, a crime has not been committed and it will not be investigated. Your complaint is civil in nature. If you have a civil dispute with your contractor, consider taking the following steps. 

• Talk with the contractor about your dispute, many issues can be resolved at this level. Consider sending your contractor a certified letter explaining the problems you have with the work that was done and explaining what you expect to be done about it. 
• Contact the Better Business Bureau. 
• Consult the Consult the Federal Trade Commission Bureau of Consumer Protection. 
• File a claim with the Virginia Contractor Transaction Recovery Fund. 
• Contact the Virginia Department of Professional and Occupational Regulation (DPOR) who can investigate licensing and building code violations. 

• Homeowners should be cautious of door to door solicitors offering home improvement services. These situations can be scams! If the deal sounds “too good to be true” then it probably is!
• Always ask to see their contractor’s license. Do you really want to do business with someone who is not properly licensed or insured? 
• Always request a contract defining the work you want done, the start and end date of your job, and how much you are willing to pay for it. 
• A reputable contractor will always provide references and get their own building permits. If your contractor is asking you to “cut corners” than that should tell you something about their business ethic. Use caution! 
• Avoid using cash as a down payment. Use alternative funds (personal check, cashier’s check, credit card, money order) which aids in documenting the down payment (via a receipt). 

Conduct a license inquiry on a contractor.

The location of the property where the work is supposed to occur is the jurisdiction where the crime has been committed. Example: If you sign a contract in the City of Alexandria to have work done on a property in Arlington County, the Arlington County Police Department would investigate the allegations of construction fraud. 

Department of Professional and Occupational Regulation