In my pervious blog, I shared my contractor horror story. Unfortunately, unscrupulous contractors are an epidemic in this country.
Tips to follow to Protect Yourself:
1) Detailed Plan or Architectural Drawing: Draw up a very detailed plan and contract. Even if you didn’t hire an architect to draw a plan, have a very detailed description of your project including the type of materials, fixtures (bathroom, kitchen, light), etc. If you don’t have any knowledge, I suggest you visit showrooms or even your local Home Depot or Lowes stores. I would strongly recommend hiring an architect if you are doing a large-scale construction project.
2) Get Quotes: Once you have your detailed plan in hand, get as many bids as possible. You should not settle for the cheapest quote or the highest quote. Select the quotes in the middle and start your interview process. Don’t accept any low bids as this is usually the costliest in the long run. Unscrupulous contractors will bid low to get the job then cut corners to save and create change orders.
3) License and Insurance:
- License: If the contractor has been in business for a long time, make sure his license including his business name spans the length of time he claimed to be in business. If a contractor claimed have been in business for 10 years, but his license states his business is 2 years old – that should raise a red flag. Unscrupulous contractors close their businesses and open new ones when there are too many complaints or lawsuits filed. It’s very easy to start an LLC and apply for a new license.
- Insurance: Make sure the contractor’s insurance certificate cover his work, your property and all of his workers. If a worker is injured on your property, you are not responsible.
4) References: Any full time contractor should be able to give you at least 5 references. The references should be from his last 5 consecutive jobs – not years apart. Be sure to call and check his workmanship.
5) Consumer Protection Agency: Check with your local consumer protection agency for any complaints filed against your contractor. You can request a full copy of a written complaint under FOIA. Also ask your contractor if they are part or ever been part of a lawsuit and why.
- Now that you’ve done your background homework, it’s time to sign the contract. With your very detailed plan in hand, sit down and discuss every aspect of your project with your contractor. Ask as many questions and make sure you understand everything. Communication is key.
- Have the contractor sign your very detailed plan and contract. Sometimes a contractor may ask you to sign his contract as well which always include lots of legal jargon. If you don’t understand, don’t sign! Ask someone for advice of simply ask him to remove any clause you’re uncomfortable with. Under no circumstance, should you sign a contract that supersedes your own as this will leave you at his mercy.
7) Permits: The contractor is responsible to apply for and collect permits. Do not let any contractor start a job without first getting the appropriate permits. If work is done on your property without the knowledge and approval of your building department, this will jeopardize your certificate of occupancy, homeowners insurance and your ability to sell your property, etc.
- If a contractor asks for a large deposit upfront to start a job, this should raise a red flag. A 10-15% upfront deposit to start a job is reasonable; however, a good contractor should have enough credit for raw materials to start your job. Once the job has started, you should only pay once each phase is complete. Do not hand over any money to start a new phase before the previous phase is completed to your satisfaction.
- Do not pay in cash. Use money orders or checks as it’s important to have proof of payment.
9) Pictures: Get in the habit of taking picture of each phase of your project.
10) Don’t be afraid to fire your contractor if you are unsatisfied!
If I missed anything, please share.