We have all heard the nightmare story or some version of it: an unsuspecting homeowner pays tens of thousands of dollars to contractors only to be left with an unfinished kitchen or bad pipes. The homeowner then spends the next couple of months trying to recover financially so that they can hire a new contractor to redo or patch the faulty work.
So, what can you do to protect yourself when faced with a major home improvement task. It goes without saying that we should all hire an experienced contractor to conquer the job. The only problem is: How do you find one that you can rely on? Here are a few of our tips.
Don't be afraid to ask questions.
Your most challenging task lies before you - finding the right contractor - so our first tip is to ask, ask, ask. It may feel stressful to ask a perfect stranger a litany of questions. However, you're the boss, so don't hesitate to take charge.
Do You Have a License for That?
Second big tip: ask the contractor you are interviewing if he or she has a contractor's license. You will want to see a copy of that license or a license number so that you can verify it with the state licensing board. Have the contractor fax or email a copy, if you are conducting a face to face walk through of the area, instruct them to bring a copy to the "interview." Then, contact the state to find out whether the contractor is validly licensed and in good standing.
A contractor is typically required by the state to be licensed if they perform jobs above a certain amount. In some states, however, lacking a contractor's license does not mean they are not any less competent, it just demonstrates a higher level of commitment and professionalism.
Third big tip: Avoid the risk and financial responsibility and hire a contractor that is licensed. Hiring a licensed contractor is just good common sense because it will insulate you financially from greater liability. First, a license enables contractors to get insured for their business. The more insured they are, the less likely it is you will have to pay out of pocket for injuries.
If they are not insured, but they damage your property, you may bear the expense of fixing the damage because reimbursement is not required by the contractor. So right around this time, some contractors skip out on paying for damages even if it is there fault. Second, if the contractor damages someone else's property or, even worse, another human being, you would be responsible for payment of damages.
Be sure to check your homeowner insurance policy for additional assurance. Most policies however will require that any work done to the premises be completed by a contractor with a license for the company to cover any damage. So, if you decide to go with an unlicensed contractor, don't expect your own insurance policy to cover any damages incurred.
In addition, hiring a licensed contractor offers resources if a problem or dispute arises. The possibility of reprimand, suspension or revocation of a license is quite an incentive for a contractor to live up to their end of the bargain and complete quality work. Licensing agencies also generally offer mediation services if a dispute arises and can even offer assistance to a homeowner to recover any loss incurred which are not offered to unlicensed contractors.
Have you had any complaints issued against your company?
Tip Number Four: Use the phone call you make to the state licensing agency to find out if anyone has lodged a complaint against the contractor. With one call, you will find out about the contractor' quality of work and customer service. If you are still unsure, you can always call the Better Business Bureau to find out if there have been any complaints lodged there.
Do You Have References?
As with most companies offering products or services, references and word-of-mouth are powerful indications of quality and reputation. A large corporation would not hire a new employee without a resume, and you shouldn't either. When screening contractors, ask for references to previous clients for whom the contractor has worked.
A quality contractor should not be hesitant to give you several past references that will speak for the quality of his or her work. Check up on these references and take note of past clients who have had excellent results from a contractor and was generally pleased with the entire experience. More importantly, take closer note of references who were dissatisfied with a certain contractor and ran into problems or disputes and be sure to steer clear of retaining his or her services.
You may be wondering what you should specifically ask these former clients. Here is a checklist:
- Was the client happy with the completed project?
- Would he or she have wanted anything changed or done differently? What specifically?
- Was the contractor easy to work with? What was his or her relationship like with the crew?
- Was the job performed and completed on time? If not, what were some of the delays?
- Was the job completed on budget? If not, what put the job over-budget?
If you are feeling really bold, you may want to ask the client if you can either see the completed work or the before and after pictures of the task.
Do You Have Workmen's Compensation Insurance?
Now that you may have narrowed down your choices as to the contractor you want to hire, your next step is to make sure that the contractor you hire will limit your personal liability for injuries that occur on the job site. The best way to do so is to make sure that the contractor has workmen's compensation insurance to cover the injuries of his own employees or independent contractors working at your home.
You will want to make sure that the insurance is current and the policy is large enough to cover everyone working including the contractor and his employees. Without adequate insurance, you may end up footing the bill for any injuries the members of the crew sustain on the job.
What about general liability insurance?
You're not out of the woods just yet. A licensed contractor is also required by the state to be bonded which means he or she has to give a certain amount of money to cover the cost of damage. The only problem is that many states only require small sums, think $10,000. So if the job is fairly big, the ten thousand may not cover the actual costs. The best way to protect yourself is to make sure that the contractor is insured above the required bond amount.
Do Your Homework
Prior to screening potential contractors, become familiar with the task you need completed on your property and learn about applicable building codes and possible permits and inspections required in order to perform the task. Then, when screening a potential contractor, don't be afraid to quiz the contractor and make sure he or she is completely knowledgeable about building codes, required inspections and any applicable permits that he or she would have to obtain before beginning any work. If the contractor brushes off the importance of obtaining all necessary permits or tries to persuade you that it's not a necessary step, move on to the next contractor.
Also, be sure that the contractor has the resources and ability to obtain any permits needed (again, having a contractor license will help greatly in this area as well).
Keep in Touch
When talking to a potential contractor, be sure to get a physical address and phone number. A reputable contractor should not be afraid to give you an address or permanent telephone number if he or she has nothing to hide. Most contractor scam artists and fraudulent operations only give out a cell phone number, beeper number, answering service or other untraceable number, along with a post office box and no traceable street address. This makes it very easy to disappear (along with your money) and become almost impossible to locate or trace.
The Price of Quality
A professional, reputable contractor should be able to submit to you a fairly accurate estimate of the project before he or she begins any work. If the contractor refuses to give you an estimated cost of the project or says the costs will be calculated "along the way", then there's a great risk that you will be stuck with an excessively high bill. Also, many states have regulations which set forth a maximum amount which contractors can charge for the deposit on a project. If a contractor asks for a rather large deposit or will only accept payment via cash, it may be an indication that the contractor will take your money and disappear before the project even begins.
Get it in Writing
When dealing with a contractor, insist that you get all the project terms in writing. Be sure that all terms of the agreement are covered in the contract, such as the start date, accurate description of the work to be completed, materials needed and used, labor and material costs, payment schedule, timetable, names of subcontractors, clean-up methods, completion date and any other arrangements that are agreed upon. The contract should also cover the policies regarding project cancellation and how extra materials or labor costs will be handled in case of a time delay or extension. A quality contractor should also be very willing to offer a warranty which lasts one year from the completion date, so make sure that the warranty is mentioned in the contract if one is agreed upon between you and the contractor.
Completing the Job
Completing improvements to your home can be a grueling and time-consuming task. Even more grueling is the difficult and important task of choosing a quality contractor to complete these improvements. However, doing your homework and being confident in asking a vast array of questions will ensure you stay in control of your home project tasks and find the best possible contractor to suit your needs.