5 Things To Cover Before You Sign With A Home Improvement Contractor

To say that not all home improvement contractors are alike is an understatement. It is important to prequalify any contractors to get your home improvement job done correctly and avoid problems in the long run. Doing your due diligence upfront will save you hours of distress, and potentially thousands of dollars, later.

Professionalism, experience, and quality workmanship should weigh heavily in your decision. There are many unaccredited and fly-by-night contractors ready to take advantage of unsuspecting home owners. These contractors are often times no more qualified than you are to complete a home improvement project. 

The goal of selecting any contractor should be to get quality materials and workmanship at a fair price. A professional contractor is likely to quote a higher price than a fly-by-nighter, and for good reasons.

A professional, expert contractor understands their business and is not going to take material or labor shortcuts that save money in the short-term, or burden you with additional costs and legal risk. Likewise, a reputable contractor carries full insurance, works closely with their manufacturers, and carefully trains employees to insure the job is done correctly.

Before you sign off on your home improvement plans with a contractor, here are five things you need to cover:

Certification, Insurance, and Warranty

A licensed, bonded and insured contractor is an essential pre-requisite for any job. Choosing otherwise leaves you exposed to liability and with no recourse should anything go wrong.

A contractor that cannot produce the proper paperwork should be a red flag for any homeowner, according to Hannah Sassi from the Better Business Bureau. 

“The contractors that are bonded and insured and are able to provide evidence are the ones you should hire. It means they have invested money and time to make sure they are operating in a legal and ethical way,” she explained. 

Similarly, when shopping for goods and services, it’s only natural that we look for quality, cost and durability. But it’s equally important to assess a contractor’s own confidence in their products, which is usually indicated by product and installation warranties. A warranty is essentially a guarantee from a service provider that their product will achieve a certain standard.

Should the product fall short of that standard or promise, the customer has a sound avenue to seek complementary repairs or replacement. A warranty gives a customer peace of mind that should problems with their purchased products arise, the supplier will:

• Repair or replace goods (or part of them)
• Resupply or fix a problem with services (or part of them)
• Provide compensation to the consumer

Schedule of Work

Scheduling conflicts are a common part of any home improvement project, particularly those that involve more than one trade. It is important that during the bidding process you ask each contractor to estimate how much time they need to complete their component of the job.

And it’s always best to take their advice, otherwise you risk creating scheduling hassles later in the project. If the plumber estimates that he will need a week, don’t force him to do it in three days. While you will have an initial meeting with your contractor at the start of the project, it is important to open up avenues of communication and speak regularly to discuss progress, issues, and concerns.

Find out more about setting a home improvement schedule here.

Costs and Labor

Any reputable contractor will be able to provide everything in writing, from an itemized quote, to the schedule of work, and products they use. 

“Written quotes are essential in protecting yourself from unexpected changes or hidden costs,” says Sandra Parker from MoneyCrashers. 

“Be sure to request a written quote for both labor and material costs, as well as a final total. Obtaining multiple quotes can help you save money when hiring a contractor.”

"Also, be certain to request a provision on your quote that states that you must be notified of any changes or additions to what has been agreed upon. This will protect you from unexpected charges when it’s time to settle the balance." 

Contract

A contract between you and a home improvement contractor should clearly state the arrangement that you and your contractor have about the project.

You can adjust a remodeling contract before you sign, so review it carefully to make sure it contains payments, work schedules, and correct project specs.

According to the Federal Trade Commission, contract requirements can vary by state. Even if your state doesn’t require a written agreement, ask for one. It should be clear and concise and include the who, what, where, when, and cost of your project.

Before you sign a contract, make sure it includes:

• The contractor’s name, address, phone, and license number (if required)
• An estimated start and completion date
• The payment schedule for the contractor, subcontractors, and suppliers
• The contractor’s obligation to get all necessary permits, if necessary
• A process for how change orders are handled. A change order is a written authorization to the contractor to make a change or addition to the work described in the original contract, and could affect the project’s cost and schedule.
• A detailed list of all materials including each product’s color, model, size, and brand. If some materials will be chosen later, the contract should say who’s responsible for choosing each item and how much money is budgeted for it (this is also known as the “allowance”).
• Information about warranties covering materials and workmanship, with names and addresses of who is honoring them — the contractor, distributor, or manufacturer. The length of the warranty period and any limitations also should be spelled out.
• What the contractor will and will not do. For example, is site clean-up and trash hauling included in the price? Ask for a "broom clause" that makes the contractor responsible for all clean-up work, including spills and stains.
• Any promises made during conversations or calls. If they don’t remember, you may be out of luck — or charged extra – so get it in writing.
• A written statement of your right to cancel the contract within three business days if you signed it in your home or at a location other than the seller’s permanent place of business.

Payment Options

Don’t make the final payment or sign an affidavit of final release until you’re satisfied with the work, advises the Federal Trade Commission. Besides being satisfied with the work, you also need to know that subcontractors and suppliers have been paid.

Laws in your state might allow them to file a mechanic’s lien against your home to satisfy their unpaid bills, forcing you to sell your home to pay them. Protect yourself by asking the contractor, and every subcontractor and supplier, for a lien release or lien waiver.

Know the limit for the final bill

Some state or local laws limit the amount by which the final bill can exceed the estimate, unless you have approved the increase.

Know when you can withhold payment

If you have a problem with merchandise or services charged to a credit card, and you’ve made a good faith effort to work out the problem with the seller, you have the right to contact your credit card company and withhold payment from the card issuer for the merchandise or services. You can withhold payment up to the amount of credit outstanding for the purchase, plus any finance or related charges.

Use a Sign-Off Checklist

Before you sign off and make the final payment, check that:

• All work meets the standards spelled out in the contract
• You have written warranties for materials and workmanship
• You have proof that all subcontractors and suppliers have been paid
• The job site has been cleaned up and cleared of excess materials, tools, and equipment
• You have inspected and approved the completed work