Facts
on Homeimprovement Projects
Learn more about
your project needs, how-to hire, scams
check lists and contracts.
If
you decide your home improvement project is too large for you to take on, then
who should you hire? Below are a few suggestions:
1.
General Contractors manage all aspects of your project, including hiring and supervising
subcontractors, getting building permits, and scheduling inspections. They also
work with architects and designers.
2.
Speciality Contractors install particular products, such as cabinets and bathroom
fixtures.
3.
Architects design homes, additions, and major renovations. If your project includes
structural changes, you may want to hire an architect who specializes in home
remodeling.
4.
Designers have expertise in specific areas of the home, such as kitchens and baths.
5.
Design /Build Contractors provide one-stop service. They see your project through
from start to finish. Some firms have architects on staff; others use certified
designers.
Hiring
a Contractor
Interview each contractor you’re considering. Here are
some questions to ask.
1.
How long have you been in business? Look for a well-established company
and check it out with consumer protection officials. They can tell you if there
are unresolved consumer complaints on file. One caveat: No record of complaints
against a particular contractor doesn’t necessarily mean no previous consumer
problems. It may be that problems exist, but have not yet been reported, or that
the contractor is doing business under several different names.
2.
Are you licensed and registered with the state? While most states license
electrical and plumbing contractors, only 36 states have some type of licensing
and registration statutes affecting contractors, remodelers, and/or specialty
contractors. The licensing can range from simple registration to a detailed qualification
process. Also, the licensing requirements in one locality may be different from
the requirements in the rest of the state. Check with your local building department
or consumer protection agency to find out about licensing requirements in your
area. If your state has licensing laws, ask to see the contractor’s license.
Make sure it’s current.
3.
How many projects like mine have you completed in the last year? Ask for
a list. This will help you determine how familiar the contractor is with your
type of project.
4.
Will my project require a permit? Most states and localities require permits
for building projects, even for simple jobs like decks. A competent contractor
will get all the necessary permits before starting work on your project. Be suspicious
if the contractor asks you to get the permit(s). It could mean that the contractor
is not licensed or registered, as required by your state or locality.
5.
May I have a list of references? The contractor should be able to give
you the names, addresses, and phone numbers of at least three clients who have
projects similar to yours. Ask each how long ago the project was completed and
if you can see it. Also, tell the contractor that you’d like to visit jobs
in progress.
6.
Will you be using subcontractors on this project? If yes, ask to meet them,
and make sure they have current insurance coverage and licenses, if required.
Also ask them if they were paid on time by this contractor. A "mechanic’s
lien" could be placed on your home if your contractor fails to pay the subcontractors
and suppliers on your project. That means the subcontractors and suppliers could
go to court to force you to sell your home to satisfy their unpaid bills from
your project. Protect yourself by asking the contractor, and every subcontractor
and supplier, for a lien release or lien waiver.
7.
What types of insurance do you carry? Contractors should have personal
liability, worker’s compensation, and property damage coverage. Ask for copies
of insurance certificates, and make sure they’re current. Avoid doing business
with contractors who don’t carry the appropriate insurance. Otherwise, you’ll
be held liable for any injuries and damages that occur during the project.
Checking References
Talk
with some of the contractor’s former customers. They can help you decide
if a particular contractor is right for you. You may want to ask:
Can
I visit a home to see the completed job?
Were
you satisfied with the project? Was it completed on time?
Did
the contractor keep you informed about the status of the project, and any problems
along the way?
Were
there unexpected costs? If so, what were they?
Did
workers show up on time?
Did
workers clean up after finishing the job?
Would
you recommend the contractor?
Would
you use the contractor again?
The
"Home Improvement" Loan Scam
A contractor calls or knocks on
your door and offers to install a new roof or remodel your kitchen at a price
that sounds reasonable. You tell him you’re interested, but can’t afford
it. He tells you it’s no problem — he can arrange financing through
a lender he knows. You agree to the project, and the contractor begins work. At
some point after the contractor begins, you are asked to sign a lot of papers.
The papers may be blank or the lender may rush you to sign before you have time
to read what you’ve been given to sign. You sign the papers. Later, you realize
that the papers you signed are a home equity loan. The interest rate, points and
fees seem very high. To make matters worse, the work on your home isn’t done
right or hasn’t been completed, and the contractor, who may have been paid
by the lender, has little interest in completing the work to your satisfaction.
You
can protect yourself from inappropriate lending practices. Here’s how.
Don’t:
Agree
to a home equity loan if you don’t have enough money to make the monthly
payments.
Sign
any document you haven’t read or any document that has blank spaces to be
filled in after you sign.
Let
anyone pressure you into signing any document.
Deed
your property to anyone. First consult an attorney, a knowledgeable family member,
or someone else you trust.
Agree
to financing through your contractor without shopping around and comparing loan
terms.
Getting a Written Contract
Contract
requirements vary by state. Even if your state does not require a written agreement,
ask for one. A contract spells out the who, what, where, when and cost of your
project. The agreement should be clear, concise and complete. Before you sign
a contract, make sure it contains:
The
contractor’s name, address, phone, and license number, if required.
The
payment schedule for the contractor, subcontractors and suppliers.
An
estimated start and completion date.
The
contractor’s obligation to obtain all necessary permits.
How
change orders will be handled. A change order — common on most remodeling
jobs — is a written authorization to the contractor to make a change or addition
to the work described in the original contract.
A
detailed list of all materials including color, model, size, brand name, and product.
Warranties
covering materials and workmanship. The names and addresses of the parties honoring
the warranties — contractor, distributor or manufacturer — must be identified.
The length of the warranty period and any limitations also should be spelled out.
What
the contractor will and will not do. For example, is site clean-up and trash hauling
included in the price? Ask for a "broom clause." It makes the contractor
responsible for all clean-up work, including spills and stains.
Oral
promises also should be added to the written contract.
A
written statement of your right to cancel the contract within three business days
if you signed it in your home or at a location other than the seller’s permanent
place of business. During the sales transaction, the salesperson (contractor)
must give you two copies of a cancellation form (one to keep and one to send back
to the company) and a copy of your contract or receipt. The contract or receipt
must be dated, show the name and address of the seller, and explain your right
to cancel.
