Home Improvement A Magellan Guide
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A Magellan Guide
Home Improvement
Your home may be your most valuable Hiring a Contractor
financial asset. That’s why it’s important
Home improvement and repair and main-
to be cautious when you hire someone to
tenance contractors often advertise in news-
work on it. Whether you’re planning an
papers, the Yellow Pages, and on the radio
addition for a growing family or simply
and TV. However, don’t consider an ad to
getting new storm windows, finding a com-
be an indication of the quality of a contrac-
petent and reliable contractor is the first
tor’s work. Your best bet is a reference from
step to a successful and satisfying home
friends, neighbors or co-workers who have
improvement project.
had improvement work done by the con-
tractor. Get written estimates from several
Home Improvement Professionals firms and compare them. Ask for explana-
Depending on the size and complexity of tions for price variations. Don’t automati-
your project, you may choose to work with cally choose the lowest bidder, and inter-
a number of different professionals: view each contractor you’re considering.
• General contractors manage all aspects Here are some questions to ask:
of your project, including hiring and • How long have you been in business?
supervising subcontractors, getting build- Look for a well-established company and
ing permits and scheduling inspections. check it out with consumer protection
They also work with architects and officials. They can tell you if there are
designers. any unresolved consumer complaints on
• Specialty contractors install particular file. However, if you don’t find a record
products, such as cabinets or bathroom of complaints, it doesn’t necessarily mean
fixtures. that there were no previous consumer
problems. Problems may not have been
• Architects design homes, additions
reported, or the contractor may be doing
and major renovations. If your project
business under several different names.
includes structural changes, you may
want to hire an architect who specializes • Are you licensed and registered with
in home remodeling. the state? While most states license elec-
trical and plumbing contractors, only 36
• Designers have expertise in specific areas
states have some type of licensing and
of the home, such as kitchens or bath-
registration statutes affecting contractors,
rooms.
remodelers and/or specialty contractors.
• Design/Building contractors provide The licensing can range from simple
one-stop service, and see your project registration to a detailed qualification
through from start to finish. Some firms process. Also, the licensing requirements
have architects on staff; others use certi- in one locality may be different from
fied designers. the requirements in the rest of the state.
Check with your local building depart-
ment 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 and
make sure it’s current.• What types of insurance do you carry?
Contractors should have general liability, Tip—Unfortunately, as in any industry, there
workers’ compensation and property dam- are some contractors who may be less than
age coverage. Ask for copies of insurance reputable. Not all contractors who employ
certificates, and make sure they’re current. these practices are dishonest, but the
Avoid doing business with contractors following may be tip-offs to potential rip-
who don’t carry the appropriate insurance. offs. Watch out for contractors who:
Otherwise, you’ll be held liable for any • solicit door-to-door
injuries and/or damages that occur during
the project. • offer you discounts for finding other
customers
• How many projects like mine have you
completed in the last year? Ask for a list. • have materials left over from a
This will help you determine how familiar previous job
the contractor is with your type of project. • only accept cash payments
• Will my project require a permit? Most • ask you to get the required building
states and localities require permits for permits
building projects, even for simple jobs like
• do not list a business number in the
decks. A competent contractor will get all
local telephone directory
the necessary permits before starting work
on a project. If the contractor asks you to • tell you your job will be a
get the permit(s), it could mean that he or “demonstration”
she is not licensed or registered, as required • pressure you for an immediate decision
by your state or locality.
• offer exceptionally long guarantees
• Will you be using subcontractors on
this project? If yes, ask to meet them, • ask you to pay for the entire job
and make sure they have current insur- up front
ance coverage and licenses, if required. • suggest that you borrow money from a
Also ask them if they were paid on time lender the contractor knows
by this contractor. Lien laws in your state
may allow subcontractors and/or suppliers • offer you a home equity loan even if
to file a mechanic’s lien against your home you don’t have enough money to make
to satisfy their unpaid bills. That means the monthly payments
the subcontractors and suppliers could go • ask you to sign a document you haven’t
to court to force you to sell your home read or that has blank spaces to be
if your contractor does not pay them. filled in after you sign
Contact your local consumer agency or
• suggest you deed your property to
an attorney for an explanation of lien laws
someone. First consult an attorney,
where you live and for information on how
a knowledgeable family member or
to protect yourself.
someone else you trust
• May I have a list of references? The con-
Note—Always read any legal document
tractor should be able to refer you to at
thoroughly before signing it and consult an
least three clients who have projects similar
attorney if you have any questions.
to yours. Ask each how long ago the proj-
ect was completed and if you can see it.
Also, tell the contractor that you’d like to
visit jobs in progress.Checking References • Don’t make the final payment or sign any
It’s important to check a contractor’s refer- final documents until you are satisfied with
ences. Talking with some of the remodeler’s the work and know that the subcontractors
former customers will help you decide if a and suppliers have been paid.
particular contractor is right for you. You • Some state or local laws limit the amount
may want to ask: by which the final bill can exceed the
• Were you satisfied with the project? estimate, unless you have approved the
Was it completed on time? increase. Check with your local consumer
agency or an attorney for information on
• Did the contractor keep you informed the laws in your area.
about the status of the project and any
problems along the way? • If you have a problem with merchandise or
services that you charged to a credit card,
• Were there unexpected costs? If so, what and you have attempted in good faith to
were they? resolve the problem with the seller, you
• Did workers show up on time? Did they have the right to withhold payment from
clean up after finishing the job? the card issuer up to the amount of credit
outstanding for the purchase, plus any
• Would you recommend the contractor? finance or related charges.
• Would you use the contractor again?
• Can I visit your home to see the completed Getting a Written Contract
job? Contract requirements vary by state. Even if
your state does not require a written agree-
Understanding Your Payment Options ment, ask for one. The agreement should be
clear, concise and complete. Before you sign a
You have several payment options for most
contract, make sure it contains:
home improvement and maintenance and/or
repair projects. For example, you can get your • The contractor’s name, address, telephone
own loan or ask the contractor to arrange and license number, if required.
financing for larger projects. For smaller proj- • The payment schedule for the contractor,
ects, you may want to pay by check or credit plus any subcontractors and
card so you have a record of the transaction. suppliers.
If you choose to pay cash, make sure you get
a receipt. Whatever option you choose, be • Estimated start and completion dates.
sure you have a reasonable payment schedule • The contractor’s obligation to obtain all
and a fair interest rate. necessary permits.
Here are some additional tips: • How change orders will be handled. A
• Try to limit your down payment. Some change order—common on most remodel-
state laws limit the amount of money a ing jobs—is a written authorization to the
contractor can request as a down payment. contractor to make a change or addition to
Contact your state or local consumer agen- the work described in the original contract.
cy to find out what the law is in your area. It could affect the project’s cost and sched-
ule. Remodelers often require payment for
• Try to make payments during the project change orders before work begins.
contingent upon completion of a defined
amount of work. This way, if the work is • A detailed list of all materials needed,
not proceeding according to schedule, the including color, model, size, brand name
payments are also delayed. and product.• Warranties covering materials and work- Completing the Job: A Checklist
manship. The names and addresses of the Before you sign off and make the final pay-
parties honoring the warranties—contrac- ment, use this checklist to make sure the job
tor, distributor or manufacturer—must is complete. Check that:
be identified. The length of the warranty
period and any limitations should also be All work meets the standards spelled out
spelled out. in the contract.
• What the contractor will and will not do. You have written warranties for materials
For example, is site clean-up and trash and workmanship.
hauling included in the price? If not, ask You have proof that all subcontractors
the contractor to add a clause that makes and suppliers have been paid.
him or her responsible for all clean-up
work, including spills and stains. The job site has been cleaned up and
cleared of excess materials, tools and
• Oral promises, which should be added to equipment.
the written contract.
You have inspected and approved the
• A clause detailing your rights and options completed work.
concerning cancellation of the contract.
The contract must be dated, show the Where to Complain
name and address of the contractor, and
explain your right to cancel. If you have a problem, first try to resolve it
with the contractor. Many disputes can be
Note—As with any legal document, it’s best resolved at this level. Follow up any tele-
to have an attorney review the contract before phone conversations with a letter sent by cer-
you sign it. tified mail, and request a return receipt. Keep
a copy for your files.
Keeping Records
If you can’t get satisfaction, consider contact-
Keep all paperwork related to your project, ing the following organizations for further
including copies of the contract, change information and help:
orders and correspondence with your home
improvement professionals. Keep a log of all • State and local consumer protection offices
telephone calls, conversations and activities, • Your state or local Builders Association
and take photographs as the job progresses. and/or Remodelors Council
These records are especially important if you
• Your local Better Business Bureau
have problems with your project—during or
after construction. • Action line and consumer reporters (check
with your local newspaper, TV and radio
stations for contacts)
• Local dispute resolution programs
• An attorneyHelpful Resources Consumer Response Center Federal Trade Commission (FTC) 600 Pennsylvania Avenue, N.W. Washington, DC 20580 877-FTC-HELP (877-382-4357) www.ftc.gov The FTC publishes free brochures on many consumer issues. You can also file a complaint with the FTC. Note—Although the commis- sion cannot resolve individual problems for consumers, it can act against a company if it sees a pattern of possible law violations. National Association of Consumer Agency Administrators (NACAA) 2 Brentwood Commons, Suite 150 750 Old Hickory Boulevard Brentwood, TN 37027 866-SAY-NACAA (866-729-6222) www.nacaa.net NACAA members are public and private advocates who work with consumers to solve problems and advance legislation, and sup- ports consumer education. Educational mate- rials and links to other consumer awareness web sites are available. National Association of Home Builders (NAHB) 1201 15th Street, N.W. Washington, DC 20005 800-368-5242 www.nahb.org This web site provides information on every phase of the remodeling process as well as answers to frequently asked questions.
Source—This guide has been adapted from the Federal Trade Commission
(FTC) publication, Home Sweet Home Improvement (August 2001).
This publication is for general informational purposes only and is not intended
to provide any reader with specific authority, advice or recommendations.
Copyright © 2011 LifeCare®, Inc. All rights reserved. LifeCare®, Inc. is the
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