We have all heard horror stories about unscrupulous contractors exceeding budgets, building without regard to code, refusing to correct errors, or taking a customer’s money and running away. Whether you are starting a small remodeling project or building a new home, there are ways you can protect yourself from contractors who are out to take advantage of unsuspecting clients. The most important way is to negotiate a legal contract that details the work to be done, the basis of the price, and a timeline. The contract protects both parties.
As with any business deal, contracts spell out the terms of work, including who performs it, what goods and services are included, how much time it will take, costs, and how to cover contingencies. If your builder uses subcontractors, it is important to complete legal contracts with these professionals.
Here are four tips you should follow while negotiating a subcontractor agreement.
Insist on Communication
If you are the client, your contract with your contractor must state how subcontractors will be hired, paid, and kept accountable for their products and services. It should also state what subcontractors will be hired, such as electricians, plumbers, painters or carpenters. This master agreement should define how subcontractors will be hired to prevent hiring subcontractors without your approval.
The subcontractor agreement must spell out what goods and services are to be provided, how much and when payments are made, and how work is to be reviewed and evaluated. It should also specify that work must meet the required codes and industry standards. When your primary contractor hires subcontractors, their company is responsible for ensuring the terms of completion. If you hire subcontractors, the terms of completion fall on you.
Your contract with your builder should specify who oversees and gives final approval to the subcontractor’s work. This ensures that all parties understand the legal requirements of completion.
Include a Detailed Scope of Work
All parties must understand what is to be completed by the subcontractor. The scope of work details the tasks to be completed, materials supplied, completion milestones, and price. It must be specific to ensure that all parties are fully informed about the terms of the project. It should specify who the client is, to whom the subcontractor reports and include terms for any warranties, guarantees, and follow-up services. If services are phased, such as installing plumbing lines in one phase and installing fittings in another, these tasks and phases should be spelled out.
Make Sure Plans Are Detailed
The scope of work should include detailed plans that the subcontractor will be asked to review and follow. For some types of remodeling, plans must be approved by the permitting agency to start the work.
If the subcontractor feels that the plans are not adequate, ask an independent architect, engineer, or other professional to review them. Some contractors fudge on plans at the beginning of a project, promising to provide more detail later or stating that detail is not needed. Even if the builder is trustworthy, vague plans can lead to misunderstandings and higher costs. Although hiring a professional to review plans costs more upfront, it can save thousands of dollars later.
Check Credentials and History of Complaints
Unscrupulous companies are often unlicensed. Ask for the company’s license number, and check it. The company liaison who is working with you may tell you that you must be responsible for getting and fulfilling permits. Take this as a red flag.
A contractor who will not be responsible for pulling permits may not be able to acquire them because the company is not licensed. Insist that your building professional be responsible for applying for and fulfilling the terms of permits.
Some types, such as electrical, plumbing, or mechanical permits, may not be able to be assigned to homeowners. Instead, they can only be pulled by licensed industry professionals. Contact your local city or county board to be sure who must pull permits.
A successful professional is usually proud of completed work and is eager to showcase past projects. Ask for references, and call them. Ask previous clients about the quality of work, timeliness of completion, ability to work within the budget, and how easy it was to work with the individual or company. In addition, check with the local Better Business Bureau or professional societies about complaints. If complaints are registered, note how they were dealt with. Most professionals address valid complaints, striving for customer satisfaction, and a good name in the industry.
Your home remodeling project can be successful with planning and putting legal safeguards into place. If you feel that you are being cheated or have doubts about the integrity of your builder, contact a contractor fraud expert.
AUTHORED BY HAMNA AMJAD
I am a blogger with features/mentions in Mattress Insider, Brit+ Co, and Best Company. Being a housewife with kids, I spend a lot of time fixing & improving stuff at home. Plus, I also write at DSRPT at times.
Twitter: @HamnaAmjad | LinkedIn: www.linkedin.com/in/hamna-amjad/