Beware of Steel Buildings SCAMS
In the last few decades, steel building scams have risen quickly. You will find nice looking websites that claim they are steel building manufacturers and will sell to you direct with no middlemen. But the truth is, they usually are not manufacturers at all. Many of these characters just sell you the truck loads of steel materials and then you have to hire a separate steel erection company to build the structure. This sadly is where many things can go wrong. For example, the erector claims things are made incorrectly (a misfab), or parts are missing. Then you have to quickly make that claim to the steel salesman. The steel salesman refuses to take responsibility. Then you are standing in the middle and the job sets idle until there is a resolution. So then the erector makes a claim to you for standby time for the heavy rental equipment that is standing idle and remobilization impact. The erector would not be responsible for these types of delays and is entitled for sometimes tens of thousands of dollars from you the owner.
Why should I worry? These sneaky salespeople will say or do most anything to get a down payment from you. Often they will provide you a quote that is unrealistically low price knowing that by the time you ever get your building permit there will be a price increase caused from inflation, changes required by the building department, or changes by yourself. Once you change anything, LOOK OUT FOR A JAW DROPPING PRICE INCREASE! By that time, often several months later, there is not much you can do about it, with exception of cancelling your contract and forfeiting your deposit, or suing them. These scam artists typically state in their contracts that in the event of litigation, the court of venue shall be in their County, USA. So can you afford to hire an attorney that far away and afford the costs of travel for months on end? Probably not. Even very wealthy successful people don’t go the legal recovery route with these guys because they are too embarrassed that they fell for such a crazy scam. So they just forfeit their deposit.
They build on your initial confidence. Initially these scammers will usually provide you with preliminary steel drawings that look pretty nice, but in actuality they just enter the building dimensions in their computer and a few other data features you are interested in and then send you the link to open up the drawings. While these drawings look impressive and make you begin to feel more confident working with them, they may have only spent an hour of their time.
It’s a fire sale. “We just had a customer cancel their order and we can now offer you a super low price if you place your order/deposit today.” This is a common trick, but some people actually fall for it. Or they may claim there is a factory price increase coming soon.
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Oh no, I already purchased their building and it is shipping soon. You may be able to find a reputable licensed steel erector in your area and all the steel parts are correct. But quite often disputes are common.
But Consumer Reports says these companies are reputable. Beware, there is a huge difference between “consumerreports.org” and “consumerreports.com”. The later will publish nice thing for companies that pay them money, which is a form of scrubbing a bad reputation. Only refer to the .org, which is a nonprofit and known to be trustworthy.
Why aren’t these scammers arrested? Many have, but they keep popping up everywhere like the Whac-A-Mole game. Various State Attorney Generals have been successful in civil suit judgements and criminal judgements over the years, but they have a lot on their plate these days.
So how should I buy a steel building the safe way? All business transactions have some element of risk. But try to
find a reputable general contractor nearby your location, preferably within 90 minutes of distance from the jobsite.
Make sure of the following.
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Verify their State Contractor’s License status to be active.
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Verify they have active Workers Compensation Insurance. Request a certificate from their carrier.
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Verify they have active General Liability Insurance (one million minimum). Request a certificate from their carrier.
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Require at least (5) years in business with the same Company name.
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Require they have built at least (5) steel buildings of similar value or size in the past with the same Company name.
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Visit at least two of their completed steel buildings and ask a lot of question.
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If possible, require a performance & payment bond. Or require proof of their payments for materials and labor, and to their subcontractors prior to subsequent progress payments. Require lien releases for progress and final payments.
For more convincing facts check this internet search term “steel building complaints scams” try 10 pages deep.
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If you are in the Southern California area and are planning a new steel building project, Shoemate Buildings, Inc would be very pleased to help you in any way possible. We can also provide protective consulting to out of state owners as well via zoom.
Just give us a call.
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Below are actual reputable steel building manufacturers that can serve California best. Beware of any other names.
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American Buildings
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Butler Manufacturing
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CBC Steel Buildings
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Kirby Steel Buildings
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Nucor Building Systems
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Varco Pruden Buildings
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This link includes all members of the Steel Building Manufacturers Association: https://mbma.com/building-systems-directory