How to Work with a Contractor
Last week we hosted our "Working With A Contractor" seminar, presented by our fabulous Historic Preservation and Sustainability Consultant, Carla Bruni. Carla shared so much valuable information and advice, and we want to make it available for everyone! Below is a summary that was given as a handout.
How to Work with a Contractor
1. Plan carefully. Consider your budget. Find pictures of styles and products you like and write down the brand names and models.
2. References. Request at least 3-5 references and then visit the sites where the work was completed to inspect the quality. If you can’t visit the sites then make a phone call to each reference.
Some questions to ask:
• Did the project come in on time?
• Were bid costs close to the final cost?
• Was the contractor easy to work with?
• Is the contractor a member of a professional organization?
3. Bids. Get at least 3 bids on your project. When the contractor looks at the project, have in mind clearly what you want to do. Listen to their input, but don’t let a contractor talk you out of changing parts of your project. Stand your ground! If you really want to maintain your historic ceramic tile floor, for example, it can be done!
4. Choosing. Do not necessarily accept the lowest bid. Some contractors may bid it incorrectly and then cut corners on the job. Others may bid it right and are still low, which is what you want. If someone’s bid is higher, consider that contractor’s quality, references and schedule before making your final decision.
5. License and Insurance. Ask for a copy of the contractor’s license and insurance coverage. Contractors must have general liability insurance for themselves and worker’s compensation coverage for any of their employees.
6. Communication. Homeowners often complain that they can't reach a contractor who doesn't show up for work. To avoid this problem, compile a list of emails, telephone, and cell phone numbers for every essential person on the project—yourself included—at the first project meeting. Give everyone a copy and post one at the house. Make sure the contractor understands that you expect to be informed of changes in the work schedule.
7. Use a written contract. A written contract protects you and the contractor. Generally, the more detailed the contract the fewer problems come up later. Make sure you understand what the contract does and does not cover. Don’t sign it unless you understand everything carefully. You may want to consult an attorney if you have any questions.
What should the contract contain?:
• Schedule. Determine the project schedule. There should be a firm start date. There is not normally a firm completion date because there are many variables that may delay the project, but a general ballpark time frame can be established.
• Scope of Work. This includes the overall scope plus individual aspects such as foundation, framing, plumbing, electrical, roofing, and all finish work down to the color, style, and manufacturer of paint and carpets.
• Materials and Equipment. Make sure the contract identifies all materials and products by name, style, quality, weight, color, brand names and any other pertinent facts.
• Payment. A schedule of payment should be included. The schedule should include the amount of each payment, the date of the payment and the completion stage of the project required before payment is made.
• License. The contractor’s license number.
• Warranties. Ask that all written warranties provided with any appliances, equipment or materials used in the project be given to you.
• Arbitration. All contracts should contain clauses specifying what form of arbitration should be conducted and by whom if disputes cannot be resolved between the homeowner and contractor.
8. Communicate. Talk to your contractor during the project. Many disputes happen because people fail to communicate at every step of the project. If in doubt, talk it out. There are no stupid questions you can ask your contractor.
9. Changes. Make any changes in writing. For remodeling, allow at least a 10% increase for changes in the contract.
10. Obtain Building Permits. Many home improvements require buildings permits. Usually contractors obtain the permits because they know what permits are requested. Ultimately, the owner is responsible for making sure the required permits are obtained. Be sure to get a copy of the building permit. A final inspection should be done when the work is complete.
11. Payment. It is customary for contractors to request that a certain percentage of the project be paid in advance. Typically, a contractor will require one third down to start, one third at the half way point and one third upon completion. For larger projects over $100,000 a more detailed schedule should be agreed upon. Generally 10% of the final payment should be withheld by the homeowner until all work is satisfactorily completed.
12. Avoid construction liens. This arcane-sounding legal mechanism allows a contractor to place a claim on your house until payment for the project is made. Any worker who has provided labor or materials can file such a claim, which can affect your title and mar your credit report. Avoid a mechanic's lien by paying all parties involved with the project on time. Ask for lien releases from the contractor, subcontractors, specialists, and suppliers before you make the final payment on the project. And lastly, require the contractor to give you a payment and performance bond, which commits a bonding company to complete the project or pay damages up to the amount of the bond.
13. Keep good written record. Keep a log of conversations and copies of all documents, correspondence, canceled checks, change orders, receipts, etc. If problems develop late, the project is already documented.
14. Make a punch list. A punch list is a checklist of every item that is incomplete, not done at all, or requires fixing or replacement. Homeowners should periodically walk through the project and keep notes on items needing repair or correction. Before accepting the job as complete, walk through it with the contractor, listing any problems that need correction. Don’t sign for completion until all work called for in the contract has been properly completed. Make final payment when you are satisfied the project is complete.