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Do your homework when searching for a contractor! New from Contractor.com added 2/18/05 Consumer Tips: Expectations
Once you have finalized the plans for your upcoming remodeling project and
decided on a contractor, there are several other important issues you should
be aware of when construction begins. Larger projects, such as room
additions, may change the living conditions in your home for the duration of
the project. While most of the changes will only be minor inconveniences,
you should know beforehand the problems you may encounter when construction
begins.
The most important thing to remember is that quality takes time. This may
mean waiting an extra day or two for special order materials, or waiting for
a particular specialty trade contractor (such as an electrician) that you
know is reliable. We know that delaying construction for a couple extra days
is not an easy thing to do, but ensuring your project is completed to your
total satisfaction will be worth it when your project is completed.
You have heard the expression that even the best made plans can come
unraveled. No matter how well you and your contractor plan your construction
project, chances are there may be a conflict along the way. Perhaps the
weather may delay construction or the materials supplier may have a delay in
shipment. As long as you are aware that minor problems like delays and
weather issues are a possibility, you will be better prepared if they occur.
Living in a construction zone means living with inconveniences during
construction. You will probably have workers coming in and out of your home,
dust settling throughout the house from construction, and you may not be
able to use certain rooms. The homeowner who is prepared for such
inconveniences won't find them quite as inconvenient as the homeowner who
plans to continue living as if nothing is taking place in their home. The
best way to prepare for your construction project is to talk to your
contractor. He knows exactly what will be taking place during construction
and can help settle some of the concerns you may have.
Consumer Tips: Hiring Tips
Consider hiring a designer for larger projects.
Ask for a list of references.
Call the references, here's what to ask. (below)
Communication is key!
Don't hire based on lowest price alone.
What are the contractor's quality standards?
How long has the contractor been in business?
Verify insurance.
Check the contractor's level of education.
Look for a professional designation.
Look for a contractor who is a member of an applicable trade association.
Check to see if the contractor needs a license, and if so, that it is valid.
A dispute resolution system should be written into your contract.
Be sure your contract contains these elements.
1. Consider hiring a designer for larger projects.
For larger projects, such as a room addition or even a significant
landscaping project, seriously consider hiring an architect or designer
first. The designer will help detail exactly what you want, and he can draw
a set of plans and material specifications for your project. Most designers
will also provide oversight and additional assistance during your project.
2. Ask for a list of references.
Ask your contractor for client references. This is your best way to judge a
contractor's experience and professionalism. Don't simply read the
references a contractor gives you. Take time to contact several previous
clients. You should also visit one of the contractor's references-either
with the contractor, or with your designer.
References are not all the same. There are four types of references you
should examine:
Clients within the past 12 months, or a current job in progress.
Clients within the past three years.
Clients beyond three years.
Also check with the county seat to find if a contractor has been named in
any law suits.
By contacting all these references you'll learn not only about the quality
of the contractor's current work, but how well his work and warranty holds
up. Additionally, you'll get a feel for the contractor's long-term standing
with his clients.
3. Call the references, here's what to ask.
List of questions to ask references:
How was the quality of the workmanship?
How well did the contractor stay on budget according to the original
estimate?
Did the contractor use a change order form for any changes?
How timely was the contractor during the course of the job?
Were you happy with his/her attitude when problems would arise?
How were the subcontractors and workers that were on the job?
Did they keep the job site clean and safe?
Was the contractor himself on the job to supervise?
Would you ever use this contractor again?
Would you refer them to a friend?
Was this contractor referred to you or did you locate him on Contractor.com?
Home Sweet Home Improvement
Federal Trade Commission
August 2001 |
Whether you're planning an addition for a growing family or simply getting new storm windows, finding a competent and reliable contractor is the first step to a successful and satisfying home improvement project. |
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Your home may be your most valuable financial asset. That's why it's important to be cautious when you hire someone to work on it. Home improvement and repair and maintenance contractors often advertise in newspapers, the Yellow Pages, and on the radio and TV. However, don't consider an ad an indication of the quality of a contractor's work. Your best bet is a reality check from those in the know: friends, neighbors, or co-workers who have had improvement work done. Get written estimates from several firms. Ask for explanations for price variations. Don't automatically choose the lowest bidder. Home Improvement Professionals Depending on the size and complexity of your project, you may choose to work with a number of different professionals: General Contractors manage all aspects of your project, including hiring and supervising subcontractors, getting building permits, and scheduling inspections. They also work with architects and designers. Speciality Contractors install particular products, such as cabinets and bathroom fixtures. Architects design homes, additions, and major renovations. If your project includes structural changes, you may want to hire an architect who specializes in home remodeling. Designers have expertise in specific areas of the home, such as kitchens and baths. Design/Build Contractors provide onestop service. They see your project through from start to finish. Some firms have architects on staff; others use certified designers.
Don't Get Nailed Not all contractors operate within the law. Here are some tip-offs to potential rip-offs. A less than reputable contractor:
solicits door-to-door; offers you discounts for finding other customers; just happens to have materials left over from a previous job; only accepts cash payments; asks you to get the required building permits; does not list a business number in the local telephone directory; tells you your job will be a "demonstration; " pressures you for an immediate decision; offers exceptionally long guarantees; asks you to pay for the entire job upfront; suggests that you borrow money from a lender the contractor knows. If you're not careful, you could lose your home through a home improvement loan scam.
Hiring a Contractor Interview each contractor you're considering. Here are some questions to ask.
How long have you been in business? Look for a well-established company and check it out with consumer protection officials. They can tell you if there are unresolved consumer complaints on file. One caveat: No record of complaints against a particular contractor doesn't necessarily mean no previous consumer problems. It may be that problems exist, but have not yet been reported, or that the contractor is doing business under several different names.
Are you licensed and registered with the state? While most states license electrical and plumbing contractors, only 36 states have some type of licensing and registration statutes affecting contractors, remodelers, and/or specialty contractors. The licensing can range from simple registration to a detailed qualification process. Also, the licensing requirements in one locality may be different from the requirements in the rest of the state. Check with your local building department or consumer protection agency to find out about
licensing requirements in your area. If your state has licensing laws, ask to see the contractor's license. Make sure it's current.
How many projects like mine have you completed in the last year? Ask for a list. This will help you determine how familiar the contractor is with your type of project.
Will my project require a permit? Most states and localities require permits for building projects, even for simple jobs like decks. A competent contractor will get all the necessary permits before starting work on your project. Be suspicious if the contractor asks you to get the permit(s). It could mean that the contractor is not licensed or registered, as required by your state or locality.
May I have a list of references? The contractor should be able to give you the names, addresses, and phone numbers of at least three clients who have projects similar to yours. Ask each how long ago the project was completed and if you can see it. Also, tell the contractor that you'd like to visit jobs in progress.
Will you be using subcontractors on this project? If yes, ask to meet them, and make sure they have current insurance coverage and licenses, if required. Also ask them if they were paid on time by this contractor. A "mechanic's lien" could be placed on your home if your contractor fails to pay the subcontractors and suppliers on your project. That means the subcontractors and suppliers could go to court to force you to sell your home to satisfy their unpaid bills from your project. Protect yourself by asking the contractor, and every
subcontractor and supplier, for a lien release or lien waiver.
What types of insurance do you carry? Contractors should have personal liability, worker's compensation, and property damage coverage. Ask for copies of insurance certificates, and make sure they're current. Avoid doing business with contractors who don't carry the appropriate insurance. Otherwise, you'll be held liable for any injuries and damages that occur during the project.
Checking References Talk with some of the remodeler's former customers. They can help you decide if a particular contractor is right for you. You may want to ask:
Can I visit your home to see the completed job? Were you satisfied with the project? Was it completed on time? Did the contractor keep you informed about the status of the project, and any problems along the way? Were there unexpected costs? If so, what were they? Did workers show up on time? Did they clean up after finishing the job? Would you recommend the contractor? Would you use the contractor again?
Understanding Your Payment Options You have several payment options for most home improvement and maintenance and repair projects. For example, you can get your own loan or ask the contractor to arrange financing for larger projects. For smaller projects, you may want to pay by check or credit card. Avoid paying cash. Whatever option you choose, be sure you have a reasonable payment schedule and a fair interest rate. Here are some additional tips: Try to limit your down payment. Some state laws limit the amount of money a contractor can request as a down payment. Contact your state or local consumer agency to find out what the law is in your area. Try to make payments during the project contingent upon completion of a defined amount of work. This way, if the work is not proceeding according to schedule, the payments also are delayed. Don't make the final payment or sign an affidavit of final release until you are satisfied with the work and know that the subcontractors and suppliers have been paid. Lien laws in your state may allow subcontractors and/or suppliers to file a mechanic's lien against your home to satisfy their unpaid bills. Contact your local consumer agency for an explanation of lien laws where you live. Some state or local laws limit the amount by which the final bill can exceed the estimate, unless you have approved the increase. Check with your local consumer agency. If you have a problem with merchandise or services that you charged to a credit card, and you have made a good faith effort to work out the problem with the seller, you have the right to withhold from the card issuer payment for the merchandise or services. You can withhold payment up to the amount of credit outstanding for the purchase, plus any finance or related charges.
The "Home Improvement" Loan Scam A contractor calls or knocks on your door and offers to install a new roof or remodel your kitchen at a price that sounds reasonable. You tell him you're interested, but can't afford it. He tells you it's no problem - he can arrange financing through a lender he knows. You agree to the project, and the contractor begins work. At some point after the contractor begins, you are asked to sign a lot of papers. The papers may be blank or the lender may rush you to sign before you have time to read what you've been given to sign. You sign the papers. Later, you realize that the papers you signed are a home equity loan. The interest rate, points and fees seem very high. To make matters worse, the work on your home isn't done right or hasn't been completed, and the contractor, who may have been paid by the lender, has little interest in completing the work to your satisfaction.
You can protect yourself from inappropriate lending practices. Here's how.
Don't:
Agree to a home equity loan if you don't have enough money to make the monthly payments. Sign any document you haven't read or any document that has blank spaces to be filled in after you sign. Let anyone pressure you into signing any document. Deed your property to anyone. First consult an attorney, a knowledgeable family member, or someone else you trust. Agree to financing through your contractor without shopping around and comparing loan terms.
Getting a Written Contract Contract requirements vary by state. Even if your state does not require a written agreement, ask for one.
A contract spells out the who, what, where, when and cost of your project. The agreement should be clear, concise and complete. A Written Contract A written contract spells out the who, what, where, when and cost of your project. The agreement should be clear, concise and complete. |
Before you sign a contract, make sure it contains: The contractor's name, address, phone, and license number, if required. The payment schedule for the contractor, subcontractors and suppliers. An estimated start and completion date. The contractor's obligation to obtain all necessary permits. How change orders will be handled. A change order - common on most remodeling jobs - is a written authorization to the contractor to make a change or addition to the work described in the original contract. It could affect the project's cost and schedule. Remodelers often require payment for change orders before work begins. A detailed list of all materials including color, model, size, brand name, and product. Warranties covering materials and workmanship. The names and addresses of the parties honoring the warranties - contractor, distributor or manufacturer - must be identified. The length of the warranty period and any limitations also should be spelled out. What the contractor will and will not do. For example, is site clean-up and trash hauling included in the price? Ask for a "broom clause." It makes the contractor responsible for all clean-up work, including spills and stains. Oral promises also should be added to the written contract. A written statement of your right to cancel the contract within three business days if you signed it in your home or at a location other than the seller's permanent place of business. During the sales transaction, the salesperson (contractor) must give you two copies of a cancellation form (one to keep and one to send back to the company) and a copy of your contract or receipt. The contract or receipt must be dated, show the name and address of the seller, and explain your right to cancel.
Keeping Records Keep all paperwork related to your project in one place. This includes copies of the contract, change orders and correspondence with your home improvement professionals. Keep a log or journal of all phone calls, conversations and activities. You also might want to take photographs as the job progresses. These records are especially important if you have problems with your project - during or after construction. Completing the Job: A Checklist Before you sign off and make the final payment, use this checklist to make sure the job is complete. Check that: All work meets the standards spelled out in the contract. You have written warranties for materials and workmanship. You have proof that all subcontractors and suppliers have been paid. The job site has been cleaned up and cleared of excess materials, tools and equipment. You have inspected and approved the completed work.
Where to Complain If you have a problem with your home improvement project, first try to resolve it with the contractor. Many disputes can be resolved at this level. Follow any phone conversations with a letter you send by certified mail. Request a return receipt. That's your proof that the company received your letter. Keep a copy for your files.
If you can't get satisfaction, consider contacting the following organizations for further information and help:
State and local consumer protection offices. Your state or local Builders Association and/or Remodelors Council. Your local Better Business Bureau. Action line and consumer reporters. Check with your local newspaper, TV, and radio stations for contacts. Local dispute resolution programs.
For More Information
Federal Trade Commission
www.ftc. gov
The FTC works for the consumer to prevent fraudulent, deceptive and unfair business practices in the marketplace and to provide information to help consumers spot, stop and avoid them. To file a complaint, or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at www.ftc.gov. The FTC enters Internet, telemarketing, identity theft and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.
National Association of Home Builders Remodelors™ Council
www.nahb.com
To order a free copy of How to Find a Professional Remodeler, send a self-addressed stamped envelope to:
NAHB Remodelors Council
Dept. FT
1201 15th Street, NW
Washington, DC 20005
National Association of Consumer Agency Administrators
www.nacaanet.org
1010 Vermont Avenue, NW
Suite 514
Washington, DC 20005
E-mail form: www.nacaanet.org/about/contact.shtml
Federal Trade Commission
Bureau of Consumer Protection
Office of Consumer and Business Education |
High-Cost "Predatory" Home Loans: How to Avoid the Traps http://www.pueblo.gsa.gov/cic_text/housing/hcloans/hcloans.html
Choosing a Remodeler
Making the Decision http://www.homestore.com/HomeGarden/HomeImprovement/Remodeling/HireAPro/Choosing/Decision.asp?poe=homestore You've done your research and asked all the right questions, and now you're ready to hire a professional remodeler. However, before you have a contract drawn up, there are still a few more items to consider. Estimates
Ask for a written estimate of the work to be done based on a set of plans and specifications. This is a time-consuming process for the contractor, so you should be prepared to pay for this package. Tip: Make sure that you're comparing apples to apples. Estimates from different remodelers need to be based on identical project specifications. Conventional wisdom states that you should "get at least three bids" before hiring a contractor. But it's a mistake to let price alone drive your selection. If you like a remodeler and are confident that he would do a good job, don't automatically switch to another contractor (who may not rank as high in customer service, competence, communication, etc.) if the estimate is more than you can afford. Tip: You may be able to scale down by making a few modifications – using quality stock rather than custom-designed cabinets or selecting less-expensive appliances or fixtures. The Right Fit
Remodeling is a very personal process. The remodeler you hire will be part of your home life for several weeks or months, so it's important to make sure that your personalities work well together. If, for example, you want to know every detail as the project progresses, you probably won't be happy with a remodeler given to one-word answers. The bottom line is: Do you feel comfortable with this individual? A strong rapport and close communication with your remodeler will help make any job go well. Choosing a Remodeler
Review the Contract Once you've picked a remodeler, no work should begin until you have reviewed and signed a written agreement or contract that spells out in detail the what, where, how, time span and cost of your project. What should your contract include? The contractor's name, address, telephone number and license number (if applicable). A visual representation – blueprint, floor plan, sketches – that shows what the remodeler will do and where. The timetable for the project, including approximate start and completion dates. Detailed specifications for all products and materials. The description of each item should provide enough detail to clearly identify it, such as the brand name, model number, color and size. This section of the contract may also describe any materials to be selected later, who will choose them and the amount of money (called an allowance) set aside to pay for each item. Information on who will obtain and pay for necessary permits and other approvals. Insurance information. Lien releases to ensure that you are not held liable for any third-party claims of nonpayment. Provisions for conflict resolution in the event of a contract dispute. Notice of your right under the FTC's Cooling Off Rule to cancel the contract within three days if it was signed someplace other than the remodeler's place of business. Other details on issues like access to your home, care of the premises, phone and bathroom use, and cleanup and trash removal.
Tip: Once you have read your contract carefully, review it with your remodeler to clarify any wording you do not understand. If you still have questions after this meeting, you should discuss them with your attorney
More helpful info http://www.homestore.com/HomeGarden/homeimprovement/remodeling/remodelsmarts/default.asp?poe=homestore
Working With Your Contractor
How to choose 'em, use 'em and get along with 'em. By Lois B. Morris The homeowner-contractor bond is key to a successful remodel in every way: If you work well with your contractor, your vision for your home is more likely to become reality – and you'll survive the project with minimal financial and psychological trauma. And if the two of you just can't get along? Everybody's heard the horror stories: the cost overruns, the no-shows and endless delays, the terrible disruption, the disappointing results. To assure the former, and avoid the latter, Arroyo, California remodeling contractor Bill Robinson offers the following suggestions. Choose a contractor whose work you're familiar with.
Get referrals from neighbors and friends. Talk to them about what they liked and didn't like concerning the contractor's work and work habits. Ask for references and check them. "Find out what kind of things went wrong and what bugged them," Robinson says. "Then think about your own personality and tastes and whether these things would bother you or please you." Be sure you and your contractor share a common vision of the outcome before you get started.
Don't assume that the contractor can divine what you want. Have the most complete drawings that the project can afford, or supply photographs or magazine illustrations. Make all choices – paint, flooring, cabinetry, etc. – upfront. You can always make changes along the way once you have the basic road map. "Some people spend more time planning a dinner party than their remodel," Robinson remarks. Don't automatically go for the lowest bid.
According to Robinson, the "low-price mentality" is inherently flawed. "I don't think the homeowner is qualified to decide what the best low bid is. If you accept the lowest bid you can either, expect cost overruns along the way, or the contractor is going to have to juggle a lot of jobs at once and yours will get delayed." Negotiate the contract rather than working with estimates.
"In the negotiated contract, homeowners tell the contractor what they want to accomplish and the what the budget is," Robinson says. "Then the contractor explains how the goal can be achieved for that price. You create a partnership and the relationship becomes less adversarial." Robinson also suggests that homeowners negotiate payments based on benchmarks in the job (such as when the framing is finished) rather than dates. "It's much better motivation," he says. Be flexible and be realistic.
"Homeowners are often not aware that remodeling an existing house is much harder – and more expensive – than new construction," Robinson says. "You have to work with or around past mistakes, and you don't always know what's there until the work's begun." Additionally,, in today's active construction market, goods are often in tight supply and unforeseen delays may find subcontractors heading off to other jobs. Talk to your contractor to be sure the estimated time frame has some wiggle room. "If I think a job will take ten days, I'll schedule 20," Robinson says. "I'll warn the homeowner, 'Things are going to happen. If we get done in 20 days, let's pat ourselves on the back. I'll keep you updated.' " Don't hover.
Because homeowners are living on the premises during most remodels, they often don't realize what a distraction they are when they're watching over the workers' shoulders. Find out what the contractor's ground rules are and let him and the subs do their jobs. Remember that everyone's presence in your living space is a source of stress on both sides. "It's like building a car with the driver already in the seat," Robinson says. Speak up, communicate, clarify.
Don't sit and stew. Most problems can be resolved if you let the contractor know what's on your mind – before anger and mistrust start to build up. "As soon as something doesn't seem right to you, bring it up," Robinson advises. "Teamwork – that's my dream." |
