Construction Fraud


Did you know if you are awarded a judgment in a court of competent jurisdiction in the Commonwealth of Virginia, against a licensed contractor, you may be eligible to file a claim with the Virginia Contractor Transaction Recovery Fund?

More information

What is construction fraud?

A person has commited 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 oppurtunity to return the advance before criminal preceedings can be iniated. 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!

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.

What is not construction fraud?

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

  1. 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. ( How to send a certified letter)
  2. Contact the Fairfax County Office of Consumer Affairs. They have investigators that can assist you with mediation and arbitration. For information on how to file a complaint, visit their website.
  3. Contact the Better Business Bureau.
  4. Consult the Consult the Federal Trade Commission Bureau of Consumer Protection.
  5. File a claim with the Virginia Contractor Transaction Recovery Fund.
  6. Contact the Virginia Department of Professional and Occupational Regulation (DPOR) who can investigate licensing and building code violations.

Who can investigate construction fraud?

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


What should I do if I am a victim of construction fraud?

If you are the victim of construction fraud, file a report by clicking here and an investigator will contact you.


How can I protect myself from becoming a victim of construction fraud?


Where can I find additional information and resources?

Virginia Department of Professional and Occupational Regulation
http://www.dpor.virginia.gov/

Fairfax County Building Codes and Standards
http://www.fairfaxcounty.gov/dpwes/construction/codes_standards.htm

Code of Virginia – Applicable Laws related to Construction Fraud

 

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