The Extension Cord That Told Me Everything

I want to tell you about an orange extension cord.

After Katrina, I was back in the city before most people. I had 35 or 40 properties to assess, and I was going door to door, taking pictures, calling owners, doing what you do when the storm has passed and the work begins. One of those properties had already been “repaired” by a contractor the owner had hired from Baton Rouge while sitting at a hotel somewhere out of state.

I walked in and within sixty seconds I knew everything I needed to know. The electrical panel boxes were mounted seven feet in the air on the wall. And running from the meter pan to the compressor outside was an orange extension cord. A standard, hardware store, orange extension cord. Plugged in and running the air conditioning system.

You do not need a degree in physics to know that is not how electricity is supposed to work.

I called my electrician and he came out and confirmed what I already suspected. The house had not been rewired. The gas lines, which are required to be replaced after a flood event of that magnitude, had not been replaced. This contractor had taken money, done almost nothing real, covered his tracks with cosmetic work, and moved on to the next victim.

The owner was not happy. The repair bill to do it correctly — just the electrical — was around fifteen thousand dollars. The gas lines were another ten thousand on top of that. That is what contractor fraud costs. And that was one property.

Why Absentee Owners Are the Most Vulnerable

Here is the thing about New Orleans rental property: a significant percentage of the owners do not live here. They own property in Gentilly or Lakeview or the Garden District and they live in Houston or Atlanta or Chicago. They depend entirely on the people they have trusted to manage and maintain their investment to tell them what is actually happening.

When a storm comes through and contractors start flooding into the city from out of state — and they do, every single time, with every significant weather event — those absentee owners are sitting a thousand miles away, looking at photos of damage, trying to figure out who to call. They are frightened and they are in a hurry. That combination is exactly what a predatory contractor is counting on.

I have seen this play out more times than I can count. The contractor promises a fast turnaround. He quotes a number that sounds reasonable given the circumstances. He takes a deposit. He does some work — maybe a lot of cosmetic work, new paint, new trim — that makes the property look repaired without actually being repaired. And then either the work falls apart six months later, or a real contractor finds the problems underneath the cosmetics, or an inspector pulls the permit and discovers nothing was done to code.

“The contractor promises fast. He takes a deposit. He does cosmetic work that makes the property look repaired without being repaired. The problems show up six months later.”

The Red Flags I Look For

After forty years of walking properties in this city and cleaning up after bad contractors, I know what fraud looks like. Here are the things that stop me in my tracks:

• Work that looks finished on the surface but doesn’t hold up to basic scrutiny. Fresh paint over walls that were never properly dried or treated for mold. New flooring installed over subfloor that was never properly cleaned or replaced.
• Electrical work that does not follow basic code. Panel boxes that are improperly located. Wiring that uses the wrong gauge for the circuit. Anything that suggests the person who did the work either does not know Louisiana electrical code or does not care about it.
• Gas lines that have not been replaced after a flood event. This is required. If a contractor tells you the gas lines are fine after significant flooding, get a second opinion before you take his word for it.
• No permits. Any legitimate contractor doing structural, electrical, plumbing, or gas work in the city of New Orleans is required to pull permits. If there are no permits, there are no inspections. If there are no inspections, there is no accountability.
• Out-of-state license or no license at all. Louisiana requires licensed contractors for this work. An out-of-state contractor is not automatically disqualified, but if they cannot show you a Louisiana contractor’s license, walk away.
• Pressure to move fast and skip the normal process. A legitimate contractor will not tell you that you have to decide today. A legitimate contractor will not ask you to skip the permit process to save time. Urgency is a sales tactic.

What Actually Protects You

The most reliable protection against contractor fraud is having someone on the ground who knows what legitimate work looks like and has relationships with contractors they have vetted over years of working together.

I do not hire people I do not know. My contractor network in this city has been built over forty years. These are licensed professionals who have been on my properties, who I have watched work, whose invoices I have verified against the actual work done. When I call them, they come. When they give me a price, it is the actual price. When they say something is done, I go look at it and confirm it is done.

That is not something you can replicate by calling contractors from a search engine after a storm. It is something that takes decades to build.

If you own property in New Orleans and you are managing it from a distance, the most important question you can ask your property manager is not what they charge. It is who they use for contractors, how long they have worked with them, and whether they verify the work after it is done. The answer to those three questions will tell you more about whether your investment is protected than any management fee structure ever will.

One more thing. After Katrina, I had to argue with Entergy because they were claiming that properties had been using power for six months after the storm — even though they had cut the power drops to every property in the city and pulled all the gas meters before the storm hit. Nobody was in those buildings. Nobody was using that power. But the bill showed up anyway, and the owners who did not have someone watching out for them had to fight it on their own.

I was there. I knew what had happened. I had the photos to prove it. That is what forty years in this city looks like in practice.

David Coxe is a licensed Louisiana real estate broker and the owner of Coxe Property Management and Leasing. He has managed residential property in New Orleans and Metairie for over 40 years. Call him directly at 504-232-1672.