The last thing that a law-abiding homeowner needs is to be taken advantage of by anybody, let alone on such a large investment.
Especially in the current economic climate that we're experiencing, every dollar and every decision matters.
1. Are you licensed?
This may seem obvious, but you wouldn't believe the number of smart, well-to-do homeowners that actually forget to ask this one very important question.
EVERY contractor engaged in "home improvement" (defined below) is required to be licensed.
Home improvement work includes alteration, remodeling, repair or replacement of a building or part of a building used as a residence. Home improvement also includes work done on individual condominium units. Home improvement does not include work done on commonly owned areas of condominiums or buildings that contain four or more single family units.
So let's suppose you ask a potential contractor that you're interviewing whether they're licensed or not, and they tell you "Yes". Should you stop there?
Well you could, but it's not advisable. How hard is it to tell a one-word lie? True, it is harder for some than for others, but the perpetrator may consider it to be a "white" lie. Perhaps they're in the process of applying for the license, or they've already applied, and just haven't been accepted yet, or they have a friend who will "cover it" with his license... I've heard a lot of little white lies around this question.
How to check to see if a contractor is licensed
To inquire about the licensing status of any individual or company, a homeowner may call their states Home Improvement Commission.
Exceptions (i.e. individuals or companies that DON'T need a state license) include architects, electricians, plumbers or heating, ventilation, air-conditioning (HVAC) contractors, but they are still required to have their own appropriate licenses.
Definitely ask any potential contractor if he is licensed and also to see a copy of his license. Be sure to check the expiration date and that it is in good standing. If the contractor has trouble producing the license, it's probably because they don't have it. Feel free to give them a chance to produce the physical licensing, but hiring a contractor that cannot show you their license is generally a bad idea.
Why it's important to use a licensed contractor?
Intuitively, you know it's important to use a licensed contractor, but is there really a difference? Well, yes, actually there is.
First of all, states make individuals and companies pass certain criteria and jump through certain hoops, if you will, to receive state licensing. This in and of itself, is a good indication that the company or individual is serious. It indicates that they are not a fly-by-night operation that engages in chronic fraudulent behavior.
Additionally, states investigate complaints by homeowners, awards monetary damages against licensed contractors, and prosecutes violators of the home improvement law and regulations.
Most states have established a Guaranty Fund. This Fund compensates homeowners for actual monetary losses due to poor workmanship or failure to perform a home improvement contract.
But here's the kicker, the Fund applies only to work done by licensed contractors. Each licensed contractor is covered by the Fund for up to $100,000 for all claims. Unlicensed contractors are not covered by the Fund.
2. Do you have general liability insurance?
Equally as important as having state licensing, every contractor should have general liability insurance. This insurance is in place almost primarily for the reason of protecting you, a contractor's customer.
In the event that something happens where your property is damaged, having proper general liability insurance will cover the costs of the damages, so that you don't have to pay for it!
Again, this is something that should be discussed on the first meeting. The contractor might not have a copy of the policy with him, but you should insist on seeing it before hiring him.
Just these two questions, if asked every time by every homeowner, probably would've saved the majority of them from the hardships they experienced.
3. Do you guarantee your work?
Again, a very important question that is (surprisingly) mostly overlooked.
It makes sense (again, definitely on an intuitive level) that contractors should guarantee their work! Considering that a remodeling or additions project is a long-term type of thing, the guarantee should be for at least one year. In fact, it's actually a licensing requirement in the state of Maryland that contractors guarantee their work for a year.
Some contractors (mostly the good ones) will have extended warranties.
You should open up a dialogue and talk in-depth with your potential contractor about their stance on the guarantee. In general, when a remodeling contractor is very confident with their guarantees, it will shine through in the way the act when you're talking about it.
You can tell when somebody is unsure, anxious, or nervous.
If you sense any hesitation or any doubt when you are discussing the guarantee with your contractor, that can be a strong indication that they're not confident in their work. An unconfident contractor is like an unconfident surgeon-not good news.
4. Can you provide some references?
This seems like another obvious one, but literally, about half of homeowners don't even ask. And of the ones that do, most will settle for written references.
We all know why it's important to get references, but the actual process of getting the references can be more or less effective, depending on how you do it.
For instance, do you settle for written references? What if they were fabricated?
Do you ask to speak with individuals over the phone? What if they were somehow fabricated?
I hope this doesn't sound like there is a general idea that builders and contractors are liars. We are designers and builders ourselves and we would never in any way imply that our colleagues are less-than-honest.
But at the same time, this is a lot of money that you are investing in this project, and if a little due diligence can dramatically increase the chances of making a better decision, you owe it to yourself to spend the time in this area.
Typically, if you ask for references, a contractor will probably furnish some written ones. It is very highly suggested to ask for names and phone numbers of 3 recent customers and also 3 customers that have had their work done at least 3 years ago. This way, you will get ideas from customers that have just finished their projects and you will also get a sense of the satisfaction of customers that have had their projects completed for some time.
And (this part is important) be sure to call them! As you're talking to them, ask them as many questions as you can think of (while being respectful of their time, of course). Record their answers to the questions, and also the general feeling that you get the customer had with the contractor.
Be sure to make sure that the previous customer's situation was somewhat similar to your own. For instance, was it the same project size with a similar scope of work? Was the property roughly the same age as your property? Did they live in the same neighborhood as you? Results can vary pretty widely and be somewhat misleading if you don't have much in common with the previous customers.
5. Who will be in charge of the job?
Throughout the construction process, there are going to be a lot of questions, comments, concerns, and a general need for solid communication between all parties involved.
There will likely be many different workers actually doing the physical labor. You don't want to have to go to one of them to ask your questions. It is ideal, therefore, to have a project manager who will be your primary point of contact.
Ask your contractor whether there will be a dedicated project manager, or a dedicated point of- contact, who is well-familiarized with the job. By "well-familiarized" I mean that they know you, they know your neighborhood, they know your house, they know your budget, they know your goals, and they know your expectations.
It's a simple question, "Who will be in charge of the job?"
On the same note, you should get some details. What will the lines of communication be? Is that individual going to be here physically? Will I have to call them on the phone to get information? Will they be responsive to email?
Another important question regarding the actual leadership of the engagement is, "Are there going to be any pre-planned meetings?" For instance, many clients have pre-construction meetings to properly set expectations of what the construction process will entail, and what types of disruptions are to be expected.
Additionally, there is often-times a meeting about mid-way through to discuss the progress of the job, any surprises that have come up, and any adjustments to the timeline of completion.
Is your contractor planning on having such meetings?
6. What about things like dumpsters, hauling trash, port-a-potties, and general clean-up?
This topic, another important one, is rarely ever discussed in interviews that I've witnessed. It is one of those things that is a very fine detail to have to think about when preparing to embark on a large job, such as a home addition.
But the fact is that it is very important in terms of your overall experience. Do you want a big pile growing like bacteria on your property? Do you want to have to remove the trash yourself at the end of the job?
Of course you don't. And you shouldn't have to.
Bring this up frankly and discuss it with your builder before the job starts. Then throughout the course of the project, check to make sure the builder is on track with what you agreed on.
Since no two jobs are exactly alike, it's difficult for us to tell you specifically what to tell your contractor. But just the fact that you read this and that these details are now at the front of your mind, should help you avoid most potential problems.
The last thing you need is a big pile of trash to take care of before going inside and enjoying your new living space.
7. Do you offer any financing options?
Having been in this business for as long as we have, we have naturally developed several banking relationships with the ideal types of lenders. You should expect the same from your potential contractor.
Talk to them about it before-hand.
Many banks want to lend you money. What we have found over the past twenty years is some are a lot better than others at doing it. We have relationships with several banks that have had offered our clients great options and service.
This should be one of the easy parts of doing a renovation, we will guide you through the process.
