Are you planning to hire a contractor for your remodel project? Do your homework first, and be a smart shopper. The law provides some protection from incompetent or fraudulent contractors, but it doesn’t guarantee perfect performance or honest transactions.
Generally, work that “adds to or subtracts from real estate” must be done by a registered and licensed contractor. Even if you are only seeking design/construction consultation, that contractor must be registered in your state or municipality.
Before you hire a contractor for your remodel:
- Plan your project carefully. If you know what you want done and can clearly explain it, you’re less likely to misunderstand instructions or encounter cost overruns.
- Interview several qualified registered contractors and solicit written bids.
– Is the contractor a member of the BBB, and are they rated highly?
– **Is the contractor insured properly?
– Is the contractor covered under workers’ compensation insurance?
– Are there any past or pending actions against the contractor’s bond?
– Has the contractor ever been cited for infractions?
- Ask for references and then check them out. If possible, view the work, interview the homeowner and visit a site with work in progress.
- Ask for references of suppliers that the contractor works with and check out his/her payment record.
- Request a copy of the contractor’s insurance policy to verify what is covered.
- Do an Internet search on the owner’s name to look for general comments that might be posted.
- Evaluate all the aspects of the bids, including the scope of work, warranties, references, time frames and price.
- Try to anticipate problems and inconveniences, such as cost overruns or cleanup, and come to an agreement with your contractor on how they will be handled before the work begins.
**Regarding insurance, there is an industry standard in the U.S.
General Liability should be at least:
- $1,000,000 each occurance (bodily injury and property damage)
- $2,000,000 general aggregate that applies per project
- $2,000,000 products/completed operations aggregate
- $1,000,000 per person or organization for Personal and Advertising Injury
In the state of Ohio, it’s also important that the insurance carrier maintains an A.M. Best’s rating of A- or better and is duly admitted in the state of Ohio.
(Insurance information provided by Ohio Insurance Advisors)
Once you have chosen a contractor for your remodel:
- Obtain a written contract than includes price, payment terms, sales tax, permit fees (if applicable), the specific work to be performed, materials to be used, warranties and start and end dates. It is also a good idea to include change-order processes, final review and sign-off procedures and cleanup.
- Make frequent inspections and consult your local building department about required permits. Make sure that all permits are in place and that inspections are in order.
- Put all change orders in writing and ask questions as work progresses; avoid verbal contracts.
Be wary of contractors who:
- Provide credentials or references that can’t be verified.
- Offer a special price only if you sign today or use other high-pressure sales techniques.
- Accept only cash, require large deposits or the entire cost up front or ask you to make the payment in their name.
- Do not provide a written contract or complete bid.
- Ask you to pick up the building permit. In many instances, the contractor is required to take out the permits. Permits are your protection and help ensure that work will meet local building codes.
- Offer exceptionally long warranties.
- Want to do most or all the work on weekends and after-hours.
- Give you an offer that sounds “too good to be true.”