Choosing/ Working with a Contractor
Are you considering making improvements to your home?
To avoid many of the common pitfalls of remodeling, think about what you want to have done; what it will realistically take to do the job; how much you are willing to spend; and what type of professional you want to do the job.
The most frequent consumer home improvement complaints are cost overruns, missed deadlines and shoddy workmanship. So take great care in selecting the contractor. Following are some guidelines to help you choose:
- Ask friends, neighbors and coworkers for referrals or contact local trade organizations, such as the Home Builders Association of Georgia, to find contractors in your area.
- Check with the Better Business Bureau to see if there are any complaints against the business.
- Ask to see the contractor's license and then check with the Secretary of State to make sure it is valid.
- Ask for references of customers who had projects similar to yours. Contact each reference and inspect the work if possible.
- Get written estimates from several companies for identical project specifications.
- Always insist on a contract for work to be performed, with all guarantees, warranties and promises in writing. Agree on start and completion dates and have them written into the contract.
- Make sure the contractor gets a building permit, and that he does so under his name or the name of his business. This will protect you from any additional expense if the work does not comply with the building codes.
- Ask to see proof of insurance (personal liability, workers' compensation and property damage).
- Consider setting payment terms in conjunction with completed stages of the job.
- When the job is done, make sure it matches the terms of the contract.
- Do not pay for any work that is incomplete.
- Require the contractor to provide an affidavit of completion when the work is finished.
- Ask the contractor to post a bond to assure payment to all subcontractors and suppliers for any sublet work, or require subcontractors to sign a lien waiver when payments are received. Be aware that any subcontractor or supplier who is not paid by the contractor may file a materialman's lien (a legal claim) against your home. Read more about protecting yourself from liens against your home.
Tips for Spotting Home Repair Fraud
Things to Consider Before Signing a Contract
- Make sure that the written contract contains all terms of the agreement and that you have read and understand everything before signing. Keep a signed, readable copy of the contract in a safe place.
- Make sure all verb al promises are included in the written contract.
- Be sure that the materials you select are what you want. Changes made after construction has begun can be costly.
- If you need to borrow money to finance the work to be done on your home, add a clause to your contract stating that it is valid only if financing is obtained.
- When writing a contract, limit your down payment to no more than 25% of the contract price. The remaining payments should be made depending upon the progress of the work, but you should withhold 10% until the work is satisfactorily completed.
- Be sure the contract includes everything you feel is important to the job.
- Never sign a partially blank contract. Fill in or draw a line through any blank spaces. If you have any questions about the contract or do not understand something, ask before you sign.
You have three (3) days to cancel a home improvement contract for more than $25 signed inside your home with a contractor. (Note: This does not apply to emergency repairs or maintenance.) If the contractor routinely extends credit and your home is used as security to arrange financing for the improvements (such as a second mortgage), you also have the three-day right to cancel. You must be told about these cancellation rights and be provided with all necessary cancellation forms. If you decide to cancel the contract you must sign, date and return the Notice of Cancellation form to the contractor by certified mail, return receipt to show that the cancellation was sent on time. Within ten (10) days of receiving your cancellation notice, the contractor is required to return all of your money.
What Records Should You Keep?
- You should keep a file with all papers related to the home improvement job, including:
- The contract and any change orders
- Plans and specifications
- Bills and invoices
- Cancelled checks
- Letters, notes and correspondence with the contractor
- Lien releases from subcontractors and material suppliers
- A record sheet on each subcontractor listing the work performed and the length of time on the job
- Samples, swatches or identifying information on materials used in your project
What Should You Do Before Making the Final Payment?
- Thoroughly inspect all work before making the final payment. Remember to specify in the contract that you will withhold ten percent (10%) of the total price until the job has been completed, you are satisfied with the work that has been done and you have proof that all subcontractors and employees have been paid.
- Review the entire project with the contractor. Immediately point out any defects and be sure they are corrected before making the final payment.
- Never sign a completion certificate until the city/county building inspection department has certified that all work was performed in accordance with code standards, you have proof that all sub-contractors have been paid in full and you are completely satisfied with the job.