Before hiring a contractor, consumers should verify, verify, and then verify again.
#1 Verify the Contractor’s License
When shopping around for a contractor to do remodeling, painting, construction, flooring, or any other service do your research. It may seem easiest to do a quick Google search of the name of the business and find some generally positive online reviews. However, there is much more that you could do to make yourself a more informed consumer. Start by visiting your state’s Secretary of State website to see what kind of business entity you are working with. Whether it’s a sole proprietor (who may not show up) or a business on its ninth LLC name change, there is a treasure trove of information you can gather up front. Most businesses have a Unified Business Identifier (UBI) number that allows you to find out more information through your state’s UBI Lookup.
Next, check with city, state, and county licensing agencies to verify the contractor’s current insurance, bond, and license. These requirements may vary from city to city, so don’t think you are out of the woods if you only read about one location. The contractor’s sign or agreement may say “LICENSED & BONDED” and you may not give it a second glance. Write down contact information, license numbers, and any otheridentifying information for the contractor.
Anyone who has had problems with a contractor would attest to the fact that red flags likely existed at the beginning of the agreement. Hindsight is 20-20 and those suspicions are not always realized until it is too late. You may also do some research on state Department of Revenue or Department of Labor agency sites to make sure you aren’t dealing with a nefarious actor. Before hiring a contractor, consumers should verify, verify, and then verify again. You will enter the contract discussions as a more informed person. Press the contractor to be honest about what credentials they have (or don’t). If you don’t ask them, they may not feel obligated to disclose more than they should. If the contractor balks at your reasonable requests or refuses to provide verification, walk away while you can.
#2 Read Reviews, Complaints, and Resolutions
Check out a contractor’s reviews, references, past complaints, and how they respond to customers. Give the contractor the benefit of the doubt. The customer is not always right, so check out how they dealt with an issue and whether they worked to resolve it. That will shed light on how they would respond should any issues arise with your contract. Reviews are often one-sided, so pay close attention to whether or not the business responds to its negative reviews. If nothing else, contact the complainant and ask them more about their issue. Ask the contractor about the complaints. Ask your mother if you have to. Just ask questions. Contractors, their employees, and others may have access to your home, family, and belongings, so they should be trustworthy people. Organizations like the Better Business Bureau® provide resources and search tools on businesses, as well as helpful tips on hiring contractors.
If a friend, family member, neighbor, or others recommend a contractor, follow-up on any experiences they can personally attest to. Fly-By-Night and door-to-door solicitors will often start by telling you that Karen down the street just hired them and said you may also want some work done on your home. You should talk to Karen and see if that’s what she actually said. Ask the contractor for references and take everything with a grain of salt. Not all contractors are criminals and not all consumers are dopes; nevertheless, legitimate contractors should not refuse reasonable requests from a potential customer.
#3 Read Before You Sign
Home improvement contracts may contain anything from breach of contract terms to force majeure clauses. These are standard boilerplate terms that cover a contractor should one of the events occur. There is no doubt that many are considering, or should be, whether their contracts were prepared for the occurrence of a global pandemic with catastrophic economic impact. Regardless of whether you are a click-through-consumer, look at the contract. Be aware of completion times, scope of work, and price terms.
Most importantly, review how the contract discusses how to handle disputes. It is easy to feel wronged because of unfair terms, but review them before a single piece of material is purchased. The days of handshake agreements are gone and everything should be in writing. Respectfully request timetables be updated and completion statuses given. Neither you, nor anyone on your behalf, should sign off on satisfactions until you’ve reviewed the project. Keep any warranties in a safe place and review what they actually warrant.
A wise law professor once remarked that everyone is always nodding their head in agreement at the beginning of a contract. The role of an attorney is to draft with the anticipation of certain occurrences. At minimum, ensure that the contract mirrors your expectations. In a litigious society, there should be broader acceptance to have an attorney review a contract before you sign. If you substitute convenience for competency, you will often get what you pay for. This could mean that if there is a dispute about $10,000 paid that results in poor workmanship, you may have just gotten $10,000 worth of bad work.
Dozens of agreements are signed each day, boxes are checked, and consumers click “I Agree.” The bottom line is this, know who you are working with. If you do your research and the contractor’s responses are half-truths or sketchy, take that into consideration before signing anything.
#4 Beware of the Crosshairs
A major unknown when working with a contractor is knowing who is working for them. Contractors often hire subcontractors. Subcontractors may be independent contractors, business entities, or freelance workers. The contractor’s default is that they are not responsible for acts of any subordinates. Take it upon yourself to make sure the contractor doesn’t have outstanding issues with any supply companies or subcontractors. Home improvement jobs are not able to be repossessed, at least not without tearing supplies off of your home and causing considerable damage.
Ask a contractor whether they have paid for supplies because the last thing you want is a surprise lien notice from a third party. A lien is essentially a security interest in property to secure the payment of a debt or some other obligation. This could effect your ability to sell your home, secure future financing, or result in you paying for supplies twice. Contractors who get overwhelmed with delays, jobs, and financial downturn will put consumers in a precarious position. Lien waivers are often used to protect the contractor, not the customer. While the job of the contractor is to complete your project, don’t get caught in the crosshairs by finding yourself unaware of what is going on during your project. A dishonest contractor is not doing you a favor by keeping you in the dark.
#5 Utilize the Power of the Purse
Contractors often require a downpayment in order to get the job started. Simply put, it has become a standard in the industry. There isn’t time to fully expound on this point, but let’s just say that not all contractors are taking that downpayment for your specific project. What is important is that you understand this. Most contractors won’t require final payment until the job is done and you sign off on some certificate of completion or satisfaction. You may be able to withhold funds until the job is complete, suppliers are paid, and other outstanding issues are dealt with. Speak with an attorney if a dispute arises and there is substantial pressure for you to pay, or the contractor threatens to file a lien or lawsuit against you.
Unfortunately, bad actors have used the door-to-door scam to get a downpayment up front and run off with your money. They may never do the job at all or do shoddy work at best. Their role is to put their salesmen at your front door, have you sign a proposal, and take your money. However, by this point, you have verified the contractor, done your research, and read reviews. As odd as it may sound, you may have to take a trip down judgment lane and review legal action taken by state Attorneys General or private parties against companies engaging in unfair and deceptive acts and practices while conducting business. Protect your home, your money, and your stress on your next home improvement project.
Resources
- Washington L&I Protect My Home
- Forbes Article on How to Hire a Contractor
- Washington Attorney General Consumer Protection Division
- Kansas Attorney General Consumer Protection Division
- Better Business Bureau
