Select the Right Contractor
Legal disputes with contractors occur often and in some instances can involve your most expensive asset…your home. Liens and encumbrances involving contractors can be avoided if you choose contractors wisely. The choice of a reputable contractor is especially important for those on limited budgets, seniors and single parents and can be the difference between bliss and nightmares.
For every unprofessional contractor, there are many contractors who do great work and communicate well with their clients. Regardless of their perceived reputation, the right contractor can be chosen when using these few important tips.
- Seek the counsel of a reputable attorney during the negotiations and contract stage. An experienced attorney can help review your contractor agreement and steer you away from local contractors who they may have had cases with historically. Call your attorney before you sign a contract. The cost of legal counsel to avoid issues is generally cheaper than legal counsel to litigate a dispute.
- Confirm the contractor is licensed and insured. Make sure the license authorizes the contractor to perform the specific work you are hiring them to perform as some municipalities and local authorities require unique authority to work. Do not be afraid to ask for and confirm insurance coverage. This small step could be the difference between doing business with a reputable businessperson with the ability to reimburse you for a mistake or doing business with some person with only tools and a truck and few assets to attach in litigation.
- You never get a second chance to make a first impression. Remember your parents telling you the importance of a first impression? Rely upon this valuable phrase when a prospective contractor arrives to bid the job. No truck and a disheveled appearance may reflect sloppy work and no business intelligence. Too fancy a truck and uniform may reflect high prices and up selling techniques. Business cards are terribly inexpensive…if your contractor does not have any, beware.
- Consider requesting two or more bids before choosing a contractor and avoid any unnecessary products or services. Receiving only one bid for an expensive project or only considering the lowest bid is normally a recipe for trouble. Many contractors intentionally underbid projects so you will hire them and bypass contractors with more realistic bids. Shortly thereafter, they begin a strategic plan of suggesting change orders or offering services beyond the agreed upon contract. By doing so, they invite the opportunity to charge a premium for time and materials unnecessary to your project and ultimately achieve their intended profit margin on the job.
- Ask for and verify the contractor’s references.Request the names and phone numbers of the owners of the last three projects completed by the contractor, and then actually take the time to contact the owners and ask them about their experience with the contractor. If possible, visit at least one of the projects and closely inspect the contractor’s work on the job. It may be helpful to visit a current worksite to see how the contractor works and how careful they are with the homeowner’s property. A chaotic and disorganized worksite is a major red flag and reason to avoid a contractor entirely.
- Ask for a detailed written estimate or contract. A reputable contractor’s bid should itemize the costs for materials, labor, fees, licenses, and permits as well as the contractor’s profit margin. Always incorporate the estimate into a concise, clearly worded agreement describing the work to be performed and the total price. A reputable estimate will include a period for the work to be completed and a “hold back” provision that permits you to withhold a portion of the final payment until the work is completed and all governmental inspections are passed. Of course, you and your contractor should sign all written agreements and make certain the person signing on behalf of the contractor has authority to bind the company.
- Large projects or renovations should involve a payment schedule. Contractors who request a large sum upfront to begin work may have financial difficulties or be apprehensive about the quality of their own work. A payment schedule allows you to pay a sum in advance to cover the cost of materials, and then make additional payments as certain milestones or dates are met.
Todd Miller is the Senior Partner of the Law Office of Todd Miller, LLC in Jefferson City, Missouri. He and/or his employers were recognized as Golf Tax Consultant of the Year by Boardroom Magazine three times and he was selected as candidate for the “10 Best” attorneys for the State of Missouri by the American Institute of Family Law Attorneys and “10 Best” attorneys for the State of Missouri by the American Institute of Criminal Law Attorneys. Mr. Miller earned his juris doctorate degree from the University of Missouri School of Law in 1999. He formerly hosted a radio talk show entitled the “Mid-Missouri Legal Advocate” on KRMS News Talk 1150AM and 97.5FM. You may also find him on Facebook, Google+, LinkedIn, and Twitter.