Get References
• Get references from the contractors you are considering.
• Ask for names and addresses of previous customers. Check with those people who have had work done and ask if it was satisfactory.
• Be sure the contractor has a permanent business location and telephone number.
• Check the contractors credit reputation with local banks or suppliers.
Get Estimates
• Get estimates from different contractors to compare prices. Remember the cost of materials and quality will affect the bid. A low bid based on inferior materials may not be any bargain, so consider more than the price alone.
• Be sure the estimate specifies the total price, the terms of payment, the kind of materials, to be used and the expected time it will take to complete the job.
• Be aware of special prices because of left-over materials, other jobs in the neighborhood or discounts if you agree to get other customers. They are often gimmicks used to get you to buy.
Get It In Writing
• When you have selected a contractor, get all agreements in writing. A written agreement will make sure there are no misunderstandings about the work or the terms of the contract.
• Make sure that you read all documents carefully. While it is not required, it is often a good idea to have an attorney review the contract and any forms before you sign them, especially if a large sum of money is involved.
• Don’t be afraid to ask questions about anything you do not understand. Ask for any changes or modifications before you sign the contract.
Get a Contract
The written contract should include:
• The company name, address, phone number and the full name and license number of the builder/contractor and the salesperson.
• Detailed job specifications which include a description (brand names, colors, grades, styles and model numbers) of materials, a list of all costs spelled out clearly, and any architect’s or engineer’s drawings which are required.
• Start and completion dates. These should allow for any reasonable delays but should include a clause allowing you to withhold payment if work slows down for no apparent reason.
• A statement that all required building permits and variances will be obtained by the contractor, before work is begun. The Building Permit is for your protection. An inspector will make sure the finished job meets all codes and safety standards, and makes the contractor responsible for corrections.
• A guarantee that the contractor carries liability insurance and has Workers Compensation coverage, in case of accidents on the job.
• A statement of warranty on the work. Be sure it tells if labor and materials are guaranteed, and for how long. A statement that cleanup will be done by the contractor should be included.
• A provision for credits if there are large amounts of materials left over. On the other hand, you should be prepared to pay for extra materials if the project takes more than anticipated. Your builder should provide you with a description of these extra costs in writing, so that there are no surprises on your final bill.
• The terms of payment should be clearly stated in the contract.
• A right to cancel clause. If you are solicited and signed the contract in your home, you have three days in which you can cancel if you change your mind. You must send the contractor a registered letter stating you wish to cancel.
• If everything in the agreement is satisfactory, both the contractor and the homeowner must sign and date the contract. Any later changes or revisions must be dated and initialed by both parties.
• Be sure that the contractor gives you a copy of the contract, with any changes noted.
Paying the Contractor
• Never pay for the entire job in advance.
• Make a deposit when work begins to cover materials and start-up costs. Pay by check to the company name and always get a receipt.
• Make scheduled payments as work progresses. Refer to the Construction Lien Recovery Fund Consumer Guide for more information.
• Be sure that any work which requires a permit, such as plumbing, electrical, heating, or structural has been inspected and approved by the state or local building inspector.
Resolving Problems
• If you have problems you should first try to resolve them with the contractor before making the final payment. You may contact the local building inspector for assistance in resolving workmanship and code violations.
• Small Claims Court is another alternative if the dispute involves a sum within their jurisdiction.
• If your efforts to resolve the matter fail, or if you feel you have been the victim of fraud or deceit, you should contact the Department of Commerce, Commercial Enforcement Division to file a complaint.
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