Protect Yourself When You Hire A Contractor

Are you looking for good contractors for a home renovation or home repair project? I’ve had many experiences with hiring contractors. I think there is some bad information out there about finding reputable contractors.

Most importantly, I see people suggesting that you MUST ask for the contractor’s license number. Don’t rely on the “contractor’s license.” There are some really important things to verify but your general contractor’s license is not one of them.

Why you ask? Every city is different when it comes to licensing contractors. This should only be one small piece of information that you collect in your decision-making process. There are much more important factors to consider and here’s why.

In some major metropolitan cities (like Dallas) all it takes to get a general contractor’s license is a tax ID and $120. That’s what I needed in Dallas to get my license. ZERO experience required, this is not a joke. I got my own independent contractor license so I could hire subcontractors directly.

Check your area, there may be contractors licenses that are specific to a type of work like “licensed kitchen contractor.” General contractor licenses don’t hold much weight.

Important Steps to Take When Hiring a Contractor

Since a license may not be worth the paper it is printed on, here is what you should consider.

1.) Ask for Referrals and Talk to Past Clients

When you are hiring a contractor, it’s always a good idea to ask for a list of home owners they have worked with in the last year with phone numbers. You should not only call these people but ask at least one or two if you can come by and see the work.

Chances are the person on the other end of the phone spent a big chunk of cash. They are aware of the commitment it takes to let someone in your home to remodel. It’s not just money, you are letting someone into your home potentially for months at a time.

Don’t feel bad asking, remember they probably did the same thing before beginning their construction project. When you contact these people be sure to ask whether the job came in on budget and if they met the project timeline. If not, ask how the overages were handled.

2.) Get A Copy of Their Insurance and Bond

Ask them to provide a copy of their Certificate of Liability Insurance, and make sure it is current. If someone has an accident while in your home, you want to be protected.

3.) Ask Them To Spell Out What Is Included

I have worked with some contractors who purchased all of the supplies, flooring, plumbing fixtures, tile, etc. I’ve also worked with others who expect you to provide those things. Be sure you know what is included in the bid you receive, and have a written contract with all the details and the scope of the project.

This even applies to paint. I have found over the years that sometimes I prefer to buy my own paint or my own tile because I want to make sure I’m getting the exact brand or finish that I want. A painter might prefer to buy the cheapest paint.

Contractors are like anyone else, at the end of the day they are in it to make a profit. If they are faced with choosing a tile that is $0.10 cents less per tile they will probably choose the lowest price option. With the internet, homeowners are more able to buy direct from manufacturers and get exactly what they want. Take advantage of this.

4.) Make Sure Subcontractors are Being Paid

Did you know that if your general contractor is not paying the subcontractors that work for him/her they can put a lien on your home? It’s called a “mechanics lien.” There are unethical contractors who may use the funds you pay them without paying their subs.

The best way to protect yourself against this mishap is to request a lien release when you write a check. This is a bit more complicated, but let’s say your contractor says they need to pay the plumber on the job. You write a check to the contractor when they give you a lien release like this one, that verifies that the subcontractor was paid.

Here’s an article that explains the importance of a lien release on larger projects.

5.) Be Patient

Using contractors in your home is a longer process than they tell you. It’s worth waiting to get one that you trust and has good referrals from actual customers.