Tips & Warning Signs
“Protecting Homeowners Through Renovation Education”
A successful home remodeling project is dependent upon finding an ethical, reliable, competent, and experienced contractor. This is where your research must be as thorough as possible, including background checks which will help to uncover any “skeletons” now, rather than in the middle of your project should things begin to unravel. Your work is about to begin!
Hire only licensed contractors.
Check with your State’s regulatory agency which governs the licensing and enforcement of building contractors. If you choose to hire someone without a license you’re on your own.
Check for a history of complaints with the Contractors Board or regulatory agency.
Verify that your contractor has a good record with your States’ Contractors License Board. Check for any disclosed complaint history and legal actions taken against the contractor. Warning: No record of complaints against a contractor does not necessarily mean no previous or current consumer problems. Problems may exist but may have not been fully investigated and reported. It can take up to a year before the information is made available to the public. This happened to us. Eight months into our construction nightmare, we discovered the citation notices against our contractor on the CSLB’s web site that were not there when we first checked the contractor’s status when signing on with his company. Sadly, it becomes a “damn if you do and damn if you don’t”, but again, it is your responsibility to check on it.
You could also check with your local Better Business Bureau but know that they are also dependent on the Contractors License Board for any legal complaint history.
However, consumers who would not bother with the Contractors Board may just file their complaint with the BBB and be done with it. Ask if they have had any complaints about the contractor If so, were those complaints resolved satisfactorily. As for me, if there were complaints that’s a red flag and I’d move on to the next potential contractor.
Check references and follow up with the homeowners.
Ask for both recent (12 months) as well as the last three years. You’ll get a much better picture of the contractor’s current work and long-term standing with his customers. Talk to the homeowners to verify the quality of workmanship. Visit on-going jobs and note job-site conditions.
Some questions to ask previous homeowners:
• Were they happy with the contractor?
• Did they complete the job in the time frame they promised?
• How was the quality of work?
• Was the contractor readily accessible and did he respond to problems as they arose in a timely manner?
• Did the contractor willingly make any necessary corrections?
• Did the workers show up regularly and was there supervision?
• Did he keep the project moving?
• Did the project come in at the cost stated on the contract?
• Would you recommend this contractor and would you use him/her again?
• Ask the contractor how long he/she has been in business and have they done projects similar to yours.
Five years in good standing in your community is considered acceptable. Check out those projects that are similar to yours. Be sure to ask the homeowners about the contractor. Depending on the job, you should also check references from material suppliers to determine whether the contractor is financially responsible.
Verify the contractors’ insurance.
Check for workman’s compensation, general liability, and surety bond coverage. Call these companies and verify coverage. Ask for a copy of these certificates and verify them by calling the insurance companies.
As a homeowner, if a worker is injured on your property and the contractor does not have insurance you’ll be responsible for picking up the medical bills. Don’t let your homeowners’ insurance become the contractor’s liability coverage.
> Get at least three bids using the same set of plans so that you’re comparing apples to apples.
> Make sure the plans include everything you want to be stated in the bid.
Be very specific regarding the quality of materials, name brands, colors, sizes, etc., that will be used or installed on your remodeling project. This is where the specifications must contain every detail that you’re expecting to have included or installed. Do not leave this up to the discretion of the contractor who may get greedy using low-quality materials in order to beef-up profit margins.
• Verify that the contractor maintains a permanent mailing address, e-mail address, published personal phone number, fax number, and a cell phone, or voice-messaging system.
You want to be sure that you can reach him quickly in an emergency and that he’s not just working out of his truck.
• Obtain from the contractor a list of building materials, suppliers, and subcontractors he uses for his projects.
Ask the contractor for the names of the subs he plans to use on your project and check out their license status. Now, this can change from job to job as far as subs go, so he/she may not be able to provide you with the subs UNTIL you’ve agreed to hire that contractor. Then you’re entitled to know who he plans to use on your project.
Just make sure that the contractor uses licensed sub-contractors, obtain their license numbers, and check their status with your Contractors State License Board. If you have questions- by all means, ask!
• Contact the suppliers to verify his credit standing.
Does he have an account or pays on delivery? Most suppliers are willing to extend credit to financially sound contractors. Contact the subcontractors and ask if the contractor pays them timely and if they have had any problems with nonpayment. These are some simple checks that homeowners can conduct and it bears repeating. It can reveal much about the contractor and save you from a horrible nightmare.
• When interviewing contractors pay attention to how you feel about him/her.
Are you comfortable dealing with them, do you have a good feeling about having them around for a few months or more. It’s just as important to have a good working relationship with the contractor as it is to have a contractor with great credentials.
• Consider doing a more extensive background check on the contractor you’re thinking of hiring.
With tens of thousands of dollars or more of your money on the line, wouldn’t you’d like to know if the contractor has a lien history, litigation history, bad debts, or past bankruptcy before signing a contract? Well of course you would. You can begin by conducting a search of court records in your city/county to check for litigation history and you can also check their lien history by doing a search through the County Property Assessor’s office that records these liens. Some of it you may be able to do online otherwise you’ll have to physically go to these places to conduct your search.
• Check the sub-contractors’ license number and get business cards from all the subs who work on your project and keep track of when they have completed their job on your project.
Again, be sure everyone is paid before you cut the check to the contractor. BE SURE TO OBTAIN LIEN RELEASES FROM THE CONTRACTOR WHEN PAYING FOR WORK THAT HAS BEEN DONE.
• Finally, get a written contract but sign nothing until you completely understand the terms.
It is well worth your money and peace of mind to know that you have signed a well-written contract that protects your interests and not just the contractors. You can read more about construction contracts by reading the section on contracts.
The key point to remember: Never pay more than 10% or $1000-as a down payment- whichever is less (for California) and for other States usually not more than 30%.
Know that NO ONE ELSE is looking out for you BUT you, so double check your contractor of choice. As I’ve said in the past, when it comes to hiring contractors it’s a crapshoot. But you can increase your odds of success by taking those extra steps because, in the end, it will be well worth the trouble. I know this seems like an awful lot of work and it is, but it is absolutely necessary if you want to avoid an encounter with the contractor from hell and reduce your chances of a remodeling project gone bad.
Learn How To Maintain Control Of:
Your Project, Your Money, Your Contractor!
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People Magazine – May 30, 2005
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This Old House – September 2002 (repeated in the summer of 2003)
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