What you need to know before hiring a contractor
GGL & Sons owner George Labbad says higher bids typically mean better materials will be used. (Photo by Chantal Lawrie)
After inheriting and moving into a house in Monroe, Wis., Jolene Jenny says she worried about the amount of rehabilitation work she knew it needed.
Built in the 1800s, the home required a new roof and updated electrical wiring — at the very least.
Not yet Angie’s List members, Jenny says she and her husband, Scott, didn’t know where to begin.
“I decided to hire the husband of an acquaintance because he had been out of work for a while and I thought we could trust him,” she says, adding that they never signed a formal contract. “It turned out to be a nightmare.”
The Jennys say they paid handyman Dennis G. Bartow $15,200 over a six-month period for a number of tasks, including renovating the bathroom, installing a new floor, updating the electrical and repairing the roof.
“He didn’t do any of it correctly,” Jolene says. “He put light switches in upside down, the floor was popping up and rain poured into our bathroom after he fixed the roof. We got a loan for $35,000 to tear out and redo all of his bad work.”
Jolene joined Angie’s List a few months later and, in addition to filing a negative report on Bartow, she asked Angie’s List for help through the complaint resolution process. Bartow never responded to her complaint, which landed him in the Penalty Box. Bartow also didn’t return messages left by Angie’s List Magazine.
Trust your instincts
In retrospect, Jolene says, she wishes she followed her instincts when hiring Bartow. “He told me he would do the work, but he didn’t want anyone to know about it,” she says. “The red flags should’ve shot up right there.”
She says she ultimately learned that Bartow never registered as a contractor in Wisconsin, so he couldn’t pull the necessary permits for the job. “I just assumed he was doing things the correct way,” she says.
To ensure your next home improvement project turns out differently than the one experienced by the Jennys, Angie’s List recommends soliciting at least three bids, properly vetting contractors and subcontractors by checking references and verifying licensure (if applicable), bonding and insurance, as well as negotiating a detailed contract. The most critical aspect, they say, is communication.
“In any relationship, unmet expectations are the No. 1 reason for disappointment,” says Jack Cherco, owner of highly rated Cherco Creative Construction in South Elgin, Ill. “Being able to effectively communicate expectations is going to set the groundwork.”
In communicating your project’s goals, homeowners need to understand the scope and develop a budget. “A lot of people are afraid to give you the budget,” says Richard Judd, owner of highly rated Glenwood Kitchen & Bath in Glenwood, Md. “I’d rather find out the number at the beginning and it saves a lot of time if you’re just honest.”
Clearly defining the project also helps in soliciting good bids. “You want to make sure you’re comparing apples to apples,” says George Labbad, owner of highly rated GGL & Sons Construction in Boca Raton, Fla. “The higher the bid, the better the materials and the work should be. But be wary of the lowest-priced contractor. They may raise the price during the job and that’s unethical in my book. It’s bait and switch.”
Check licensing and insurance
Before selecting a contractor, be sure to verify all licensing and insurance. “I’ll always provide licensing for myself and my subcontractors,” Judd says. “I’m not allowed to have anyone step on the property without a certificate of insurance.”
Maryland, like many other states, requires proof of insurance before issuing contractor licenses. Homeowners may be held liable for damages if the contractor isn’t properly licensed, bonded and insured.
A bond covers the costs of repairing or replacing a contractor’s shoddy work. Liability insurance covers property damage and injuries caused by the contractor’s work. Workers’ comp insurance, required for any business with employees, provides payments to injured workers for lost wages and medical services. Not all states require workers’ comp for self-employed contractors.
Daren Langhorne, co-founder of highly rated Core Outdoor Living in Clifton, Va., says most of his clients don’t understand the difference between the two types of insurance.
“Workers’ compensation insurance is more expensive than a general liability policy, and it provides very important protection to our clients,” he says. “Some contractors don’t carry it, so we like to educate our clients about its value so they can evaluate competing proposals more accurately.”
One of the biggest mistakes homeowners make, Langhorne says, is failing to visit the contractor’s completed projects during the bid review process, particularly when it’s a big job. “Photos and client testimonials are helpful, but there’s no substitute for actually walking a completed project to determine the look and feel of what is being proposed,” he says. “Not doing this can lead to disappointments after construction has begun.”
Read the contract before you sign it
Once you’ve got at least three bids, the next step involves negotiating a detailed contract. Out of about 1,000 Angie’s List members responding to a recent online poll, 10 percent say they didn’t sign a contract for a large home improvement project, 4 percent only glanced at it and 32 percent admit to only reviewing it somewhat closely. More than a third of respondents say they didn’t solicit at least three bids.
Cherco says he places strong emphasis on contracts, but each project requires flexibility for unforeseen circumstances. “I put together a contract that protects myself and the homeowner and includes items such as a timeline, details of the project and payment structure. But it’s never definitive.”
Whatever the budget, homeowners in many states should be prepared to pay at least one-third of the total cost as a down payment, and possibly more for projects requiring custom materials.
Some states, however, require specific amounts for deposits, such as California, which requires consumers to pay no more than 10 percent. “I usually ask for 35 percent or more, depending on the project and amount of custom-ordered material needed,” says Cherco, whose state of Illinois makes no deposit requirements. “I believe that the customer should have some ‘skin’ in the game. It transforms them into more of a partner for the project.”
Angie’s List member Anthony Digiunta of Kirkland, Wash., says he regrets not asking for more details in his home-renovation contract with poorly rated Northwest Woodcrafters in Woodinville, Wash., but he thought it might appear petty and mistrustful to question the company, which a neighbor had recommended.
“[The contract] had all the main aspects of the project itemized,” he says. “I didn’t want to nitpick about details. The respect I tried to show by not demanding every blessed detail be written in the contract turned out to be foolish.”
Digiunta says the contract didn’t include itemized costs or work he thought should be included. “They charged $2,546 to replace a kitchen window that was on sale at Home Depot for $150,” he says.
Also, he says the company wanted to charge an additional $758 plus materials to fix a gap in the floor that Digiunta says the crew caused after removing a wall — a task not covered in the contract. “Contractors who do good, honest work might wonder why they sometimes need to put up with overly demanding clients questioning every small detail. It might be because they had an experience like this,” he says. Northwest Woodcrafters did not return calls seeking comment.
Nailing down a project’s specifics in a written contract protects the homeowner and the contractor, but contractors say they appreciate flexibility.
“Sometimes, you get into an old home and you start taking it apart and you discover things,” says Mitch Newman, owner of highly rated Stratagem Construction in Chicago. “The homeowner has to believe that I’m there for their best interests and not just to raise the price $7,000.” To eliminate ambiguity, some contracts even detail which items aren’t covered. “I’ll specifically write ‘paint not included’ or ‘appliances not included,’” Judd says.
Know your subcontractors
Another potential point of contention involves the use of subcontractors. Many general contractors and companies hire subcontractors for large remodeling projects or specifically for electrical work or plumbing. “That’s all I work with,” Judd says. “I’m upfront with my clients and tell them I find the best drywaller, the best electrician, the best plumber.”
Judd says he sets rules and reviews every job with his subcontractors. Homeowners should ask the contractor for a list of subs to be used on a project, and then check them out on Angie’s List.
Along with asking for proof that the subcontractors are licensed, bonded and insured, insist on a lien release, which protects the homeowner from liability if the contractor fails to pay them. “I don’t get many requests, but I’d be happy to provide a lien waiver,” Newman says. “I do feel responsible for their work.”
Angie’s List member Elizabeth Bruner of Keller, Texas, says she obtained lien waivers from highly rated Rockaway Co. in Haltom City when the company remodeled her kitchen and bathroom.
“It’s very important to know that the contractor you hired is paying his subcontractors and suppliers,” she says. “Just because you pay him does not mean he pays [them]. If you have a contractor that is not willing to provide waivers, that’s a red flag!”
Member Stuart Anderson of Broken Arrow, Okla., says he had to threaten to withhold funds during construction of his new house before receiving lien waivers from Artisan Construction of Oklahoma, a Tulsa company with one F report from Anderson.
“You can wind up owing tens of thousands of dollars very quickly if you let the builder skate along without providing proof he or she is paying the subcontractors,” Anderson says, adding that he had problems with Artisan’s work on stair treads, a wrongly measured closet and unbalanced air distribution. “It couldn’t have gone any worse.” Calls to Artisan were not returned.
Maintaining good communication throughout your project often plays a key role when addressing changes or fixing issues on the final walkthrough. Member Sue Meredith of St. Paul, Minn., says a good rapport with highly rated White Crane Construction in Minneapolis kept her from panicking when a product malfunctioned during her basement renovation. “White Crane made sure it was done right,” she says.
Member Peter Bray of Lindenhurst, Ill., says his comfort level with highly rated Advanced Construction in Schaumburg, Ill., on his remodeling project made a difference. “I knew how to handle changes and who was going to be on the job from start to finish,” he says.
For more information on licensing and hiring tips, visit the Angie's List Guide to Contractors.