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|Hiring a Contractor |
It is extremely important to compare costs before making a financial commitment toward any home improvement project. You should solicit at least two or three bids from prospective contractors—bids based upon the same building specifications, materials, labor, and time needed to complete the project.
Discuss bids in detail with each contractor, making certain you understand the reasons for any variations in the prices. Do not automatically choose the lowest price. One contractor's bid might be higher because the materials to be used are of a better quality or because the work will be especially thorough and, therefore, require more time and labor.
Ask the remodeling contractor for local references and find out if these customers were satisfied with the contractor's work. If possible, visit and inspect their completed projects.
Find out if the contractor is a member of a professional association which has standards or a code of ethics for remodelers.
Contact your local BBB (BBB) to learn how long a contractor has been in business and if the firm has been responsive to any complaints filed with BBB.
Another important matter to consider before hiring a contractor deals with insurance. Ask the contractor if the company is insured against claims covering worker's compensation, property damage, and personal liability in case of accidents. Then call to verify the contractor's insurance coverage after obtaining the name of the carrier and agency.
Finally, check with your state, county, or city housing authority to see if the contractor must meet certain licensing and/or bonding requirements in your area. If so, make sure your contractor is properly licensed and bonded. Never pay a contractor for the entire job in advance and avoid paying in cash whenever possible.
Home Improvement is not an exact science. Expensive hidden problems can be uncovered once work has begun.
Terms and Conditions: All agreements and oral promises regarding a home improvement project should be put in writing to protect both the customer and the contractor. If you intend to do some of the work yourself or hire another contractor to do it, such terms should be written into the contract as well. The written contract should also include:
A thorough description of the work to be done—specifying all materials to be used in terms of quality, quantity, weight, color, size, brand name, etc.;
Agreed upon starting and completion dates;
Total cost, with a breakdown of labor and material charges;
A payment schedule;
Any warranties and guarantees of workmanship;
The method for debris and material removal once the job is finished; and
A clause which states your right to cancel the contract within three business days if you sign it in your home or at a location other than the contractor's permanent place of business. This clause should also state that the contract is null and void or will be renegotiated if the job uncovers unexpected or hidden problems or damage after work has begun.
In addition, make sure the written contract includes:
The contractor's full name
Professional license number
Never sign a partial or blank contract. Read every contract clause carefully and ask any questions you may have before signing. Retain a copy of the contract once it is signed, and file it in your records.
You should make every attempt to pay a minimal or no down payment for supplies or services; especially if you have not done business with a contractor in the past. You should not make any payments for incomplete work. Schedule payments at weekly or monthly intervals or after completion of each phase of the project. All of these terms should be spelled out in the contract and clearly understood by both you and the contractor.
Cancellation Rights: When you sign a home improvement contract in your home and in the presence of a contractor or contractor's representative, you have three business days in which to change your mind and cancel the contract. The contractor is required to tell you about your cancellation rights and provide you with any cancellation forms. If you cancel, it is recommended that a notice of cancellation be sent to the contractor by certified mail, with a return receipt request.
Never make final payment or sign an affidavit of final release until you are satisfied with the work done and know that all subcontractors and suppliers have been paid.
Lien Protection: For a large remodeling job that involves several subcontractors and a substantial financial commitment, you should protect yourself from liens against your home if the primary contractor does not pay his or her subcontractors or suppliers. You may do this by adding a release-of-lien clause to the contract or by placing your payments in an escrow account until the work is completed.
Warranty Clause: Any warranty offered on products by the contractor should be in writing and scrutinized carefully. Make certain you understand all the terms and conditions, including the length of the warranty. The warranty must state whether it is a FULL warranty that gives the consumer certain automatic rights or a LIMITED warranty that restricts certain consumer rights.
To learn more about Home Improvement issues, contact the following:
YOUR LOCAL BETTER BUSINESS BUREAU
FEDERAL TRADE COMMISSION at 877.FTC.HELP (877.382.4357)
NATIONAL ASSOCIATION OF THE REMODELING INDUSTRY (NARI) 703.575.1100
NATIONAL ASSOCIATION OF HOME BUILDERS (NAHB) REMODELORS(TM) COUNCIL 202.822.0216
NATIONAL ASSOCIATION OF REALTORS 202.383.1000