From licences and terms to contracts and reference checks, hiring a contractor for your home gets a little easier with these great tips.
Licences and Insurance
Each contractor who comes onto your property should have a valid licence. Make sure you ask to see it and inspect it closely. Licences are offered by the government and expire yearly, so make sure you check to see if their licence is valid. The government supplies permits for renovation, electrical, plumbing, heating and cooling. The licence doesn’t insure quality but it is the first step in investigating your contractor. It is also your right as a home owner to demand that your contractor carry valid insurance which covers you in case of any accidents on the job site (i.e. someone dropping an expensive vase or scratching an original oil painting). If a contractor doesn’t have valid insurance, they can attain temporary insurance to cover the work on your property. Some contractors may threaten to not do work on your property if you demand insurance but do you want someone like that working on your property?
If your contractor is a good one, they will have a list of references detailing at least 10 different clients with up-to-date contact information including: name, address, phone number(s), and info on the work done including quote. Once the contractor has supplied such a list, call a number of them. Ask the home owners important questions like: Did the contractor start/finish on time? How much down did they ask for? Did you have any problems on the job? Was the contractor pleasant to work with? Did they surprise you with extra prices you did not expect? Furthermore, try to go see at least three other properties which have had similar work done. This is important as you don’t want a fence expert doing a stucco job on your $30,000 addition.
Before you agree to have the contractor do work on your property, it is the contractor’s responsibility to provide a contract containing all their contact information and detailing the work which will be completed on your property, supplies they will be using, sub contractors (if any) who will be coming onto the property and a detailed payment schedule. It should also be stated in the contract that you will not pay any costs above the quote unless agreed to in writing.
It isn’t a bad idea to put some terms on your contract, i.e. times the property is open to them and that the contractor agrees to clean up at the end of each work day. Some contractors ask for an outrageous amount of money before they even lay a hand on your property. Our first episode “Whole House Disaster” tells the story of Dave and Anna who were taken for over $100,000 when they hired a contractor to renovate their entire house. The contractor asked for $20,000 upon singing and $20,000 the first day of work. That’s $40,000 (or 40%) up front.
A good landmark to use depending on the size of your job, is an average “good faith” down payment of $2,500 which is basically booking a contractor’s time. When they arrive at the job site with their tools ready to work, you can give them another 10%. Never agree to a payment schedule based on time. Agree to a payment schedule based on work completed. For instance, if someone is renovating a spare room in your home, agree to pay just 10% on their first day or work, 25% when electrical is completed, 25% when insulation, vapor barrier and dry wall is installed, and 25% when priming and painting is completed. It is your right to hold back 15% for up to one month after completion. This gives you time to make sure nothing falls apart within 30 days of the job being completed. Never give the balance of the quote due before the contractor has finished all of their work. Make sure you never pay in cash. Always pay by cheque or certified cheque. It is important to keep a paper trail in case you ever have to go to court. It is always important to get a receipt for every payment you pay the contractor, signed and dated by the contractor.
Most importantly—BE CAREFUL WHAT YOU SIGN. A good contract should be typed, legible and easy to read. There should be no fine print. And remember—always trust your first instincts as they are usually correct.