How Do I Know If I Can Trust a Contractor?

Finding, hiring, and working with a contractor can be like marrying a mail-order spouse. How do you guarantee a happy ever after? We answer your most pressing concerns.

Image: P. Brubaker

  

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Why Can't I Find a Good Contractor?

Where are you looking? 

When it comes to finding a reliable pro for your remodeling project, the closer to home you look, the better. Friends, family members, and neighbors are the most trusted source for contractor referrals, says the National Association of Home Builders.

A referral from someone you know is a great place to start, but don’t stop there — you’ll want at least three candidates. Cross-reference your choices against various sources of information before settling on a contractor:

Better Business Bureau. Check for complaints against the individual or company. If there are complaints, don’t jump to conclusions — even really good contractors can have missteps. See if the dispute has been resolved to everyone’s satisfaction — a good indication that the contractor is diligent and well-intentioned.

Angie’s List, Consumers’ Checkbook, Craigslist, Yelp reviews. The online community is a trove of peer opinions on professional contractors, the quality of their work, and their reliability. But don’t rely on just one review site; consult several. More on review sites below.

Hardware store, lumber store manager. Local businesspeople serving the construction trades know who pays bills regularly, who gets jobs done on time, and who has the best reputation.

Check their work with referrals. A contractor isn’t going to recommend you visit any shoddy workmanship, but you’ll be able to tell a lot by viewing some of his recent jobs. Have your contractor set up dates and times. Don’t hesitate to ask the homeowners you visit if they got along with the contractor and crew.

Related: 5 Questions to Ask Before Hiring a Contractor

Are Online Reviews Bogus?

Yelp sticker on a store windowImage: Liz Foreman for HouseLogic

With insights on everything from plumbers to roofing materials, online reviews of contractors and products can be an easy and time-efficient way to find a contractor. In fact, almost 80% of consumers trust online reviews, says a survey from BrightLocal.

But should you? There’s genuine concern that some reviews may be deliberately misleading. For instance:

  • Glowing reviews penned anonymously by a company’s employees
  • Hired writers who hand out five-star reviews for money
  • Rival companies who try to sink their competition with negative reviews

In addition, there are concerns about the companies’ business models. For instance, Angie’s List takes advertising from contractors, which some say could compromise rating integrity. On the other hand, Angie’s List requires a subscription, which some say helps ensure quality.

So, are reviews really trustworthy? Amazon, Angie’s List, and Yelp all insist they go the extra mile to ensure the authenticity of the opinions posted on their websites. Angie’s List regularly screens reviews for suspicious patterns, and Amazon’s rating system tends to smooth out any extreme highs and lows.

Our take? We like hearing from our peers, especially when it comes to localized subjects and home improvement pros in our community. But get the big picture before letting one online review sway your thinking:

  • Check reviews from various online sources — don’t rely on only one.
  • Judge extreme opinions with care: “Don’t let this guy set foot on your property;” “best experience of my life.”
  • Balance positive and negative reviews. A single bad review can easily taint any good ones. If you find a negative comment about a contractor you’re interested in, check to see if the contractor has followed up and tried to rectify the situation.

Related: Can Your Contractor Sue You for a Negative Review?

If I Sign a Contract, Will I Get Screwed?

Signing a home contractor contractImage: Branko Collin
 

Your job is due diligence before you sign, making sure that you understand everything in the contract and that it’s written to your satisfaction. It’s a process, but we’ll take you through the necessary steps.

Step 1: Getting a bid. Before hiring a contractor, seek at least three bids. 

When you do, ask for itemized bids. It’s more work for the contractor, but it lets you see exactly where costs are assigned. That way, if you need to trim, you can find specifics that you may be able to do without.

Items to include:

  • Demolition and trash removal
  • Framing and finish carpentry
  • Drywall
  • Electrical work
  • Plumbing
  • Lighting fixtures
  • Painting

Step 2: Reviewing the contract. Once you’ve selected a contractor, you’ll be presented with a remodeling contract. Read it carefully. If you’re unsure about the terms, you can hire an attorney to review it for about $500. Having your lawyer supply revisions may cost an additional $1,000 to $1,500 in attorney’s fees.

The contract should include:

  • That all permits and approvals will be obtained by the contractor
  • Beginning and end dates for the project
  • A schedule of payments from you to the contractor

Be sure to specify a substantial amount — 15% to 30% — for a final payment to be made after the work is totally completed and you have verification that all subcontractors have been paid; otherwise, an unpaid subcontractor may put a lien on your house — a legal claim that forces you to pay the debt yourself. 

With subcontractors verified as paid, you’ll have the leverage of your final payment to your contractor to ensure that all work is done to your satisfaction and in accordance with the contract.

Step 3: Dealing with changes. Trust us: Making a few changes to the project during construction is inevitable, so the remodeling contract should include a change order clause. The clause should say that if you change your mind about an item (adding more light fixtures, for example), both you and the contractor agree what those changes will add to the cost of the project. 

The contract should state that change orders must be signed and countersigned by both you and the contractor.

Step 4: Set up for arbitration. Nobody wants to get into a legal hassle, but if you do, arbitration will save you the time and money of taking a dispute all the way to court.

This is another item you’ll want in the contract before you sign. If the contractor names a specific arbitrator, your antenna should go up. Research the arbitrator and, if you don’t like what you find out, insist on another arbitrator. Find arbitrators at the non-profit American Arbitration Association.

If the Crew Doesn't Show Up on Time, Can I Throw a Hissy Fit?

Sure, but do it in the bathroom with the door shut. Then take a deep breath and assess the situation. If the problem is chronic, disrupts the scheduling of subcontractors, is accompanied by shoddy workmanship, and generally makes a mess of your plans, you need to take action. 

Start by documenting your grievances:

  • Note days and times that the crew or subcontractors failed to show, and for how long.
  • Note delayed deliveries of materials and appliances.
  • Take clear photos of shoddy workmanship and any inferior materials used.

You’ll need to discuss problems with your contractor. Schedule a meeting — not in front of the crew — and share your concerns.

A good contractor will work to rectify any wrongs. And there may be perfectly logical explanations why things haven’t gone according to plan. But if you get lame excuses — or worse, your contractor fails to show up for your meeting — your next step is to take action against a bad contractor. Here are some options:

Fire your contractor. You’ll have to show that your contractor didn’t fulfill on your agreement, otherwise he or she can take you to court for breach of contract. Documentation is essential to proving your point.

Send a return receipt letter to your contractor’s home and place of business, saying that you expect problems to be fixed within a certain number of days or else you’ll terminate the agreement for breach of contract.

Get an attorney. Your dispute will have to be a major one to justify the $100 to $300 per hour fees that attorneys charge. If so, find an attorney who handles building and remodeling contracts and is familiar with your state laws and statutes.

Take your contractor to small claims court. In small claims court, you represent yourself; a lawyer isn’t required. Again, your documentation of problems is essential. A judge hears arguments and makes a decision.

Damage awards are limited and depend on the state where you file. Some rewards are capped at only $2,500; a few states award damages as high as $25,000. Most range from $3,000 to $7,500.

Related: How to Resolve a General Contractor Dispute: Your Legal Options

Should I Let the Crew Use My Bathroom?

A contractor using your home's bathroomImage: Bill Bradford

Good relations with a contractor and crew are a two-way street. A little kindness and consideration can go a long way toward getting a finished project you’re proud of and that you’ll love for years to come. 

Establish clear rules. If the contractor doesn’t provide a portable toilet (many smaller jobs won’t) and the crew is in need of a bio break:

  • Have them ask permission.
  • Designate a specific bathroom for the crew.
  • Have the crew provide protection for your flooring along the route to the bathroom.
  • Put out clean — but not your best — hand towels.
  • Provide hand sanitizer.

Give them a break. You won’t want to interrupt the workflow or the contractor’s schedule. But you can:

  • Provide lawn chairs for breaks — a shady spot is great for hot days.
  • Offer ice water or lemonade on excessively hot days.
  • Indicate a garden hose and spigot to be used for cleaning up.
  • If you’re up to it, provide morning coffee every now and then.

Check your contractor’s insurance. Accidents can happen. Before you hire a contractor, ask for proof that the contractor has valid liability insurance covering:

  • Bodily injury and property damage to you, your family, and your home
  • Workman’s compensation for injuries to the contractor and crew
  • Accidents involving the contractor’s equipment (don’t provide the contractor and crew with any of your own tools or equipment)

Check your own insurance. Make sure the personal liability section of your homeowners policy covers injuries incurred on your property.

How Do I Fork Over the Cash?

Don’t pay your contractor with cash; instead, use a credit card that gives you a clear paper trail. You can use a check, too, but make sure your bank keeps photocopies of your checks as part of its services.

Establish a payment schedule in your contract. An example of pay installments:

  • Ten percent when the contract is signed. Some states limit the amount of a downpayment to contractors to help prevent fraud. California limits downpayments to 10% or $1,000, whichever is less. Check with your state Department of Consumer Affairs for any limits on remodeling downpayments.
  • Three 25% payments at pre-agreed-upon intervals, such as when the building inspector signs off on plumbing, electrical, and framing.
  • Fifteen percent held in escrow for when the project is completed to your satisfaction and all loose ends are tied up.

Related: 5 Secrets Your Contractor Doesn’t Want You to Know