Adapted from the Federal Trade Commission site at
http://www.ftc.gov/bcp/conline/edcams/homeimp/index.html
1 Quick Tips for Hiring a Contractor
- Ask the contractor for customer references who have projects similar to yours and call them.
- Ask for a copy of the contractor's current insurance certificates and licenses.
- Get written estimates from several contractors before you make your decision. Make sure bids are
based on identical project specifications.
- Get all guarantees, warranties and promises in writing.
- Agree on start and completion dates, and have them written into the contract.
- Do not pay more than half of the contract price in advance. Only pay the final amount after all
the work has been completed.
- Ask friends, neighbors, and co-workers for contractor referrals.
- Check out the contractor with the state attorney general's office of consumer protection.
2. Extensive Tips for Hiring a Contractor
Not all contractors operate within the law. Here are some tip-offs to potential rip-offs.
A less than reputable contractor:
- solicits door-to-door;
- offers you discounts for finding other customers;
- just happens to have materials left over from a previous job;
- only accepts cash payments;
- asks you to get the required building permits;
- does not list a business number in the local telephone directory;
- tells you your job will be a "demonstration";
- pressures you for an immediate decision;
- offers exceptionally long guarantees;
- asks you to pay for the entire job up-front;
- suggests that you borrow money from a lender the contractor knows.
If you're not careful, you could lose your home through a home improvement loan scam.
Hiring a Contractor
Interview each contractor you're considering. Here are some questions
to ask.
- How long have you been
in business? Look for a well-established company and check it out with
Maine's state attorney general's office of consumer protection. They
can tell you if there are unresolved consumer complaints on file.
No record of complaints against a particular contractor doesn't necessarily
mean there have been 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.
- Are you licensed and registered
in Maine? 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.
- 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.
- Will my project require
a permit? Most states and localities require permits for building projects,
even for simple jobs like ramps. 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 in Maine.
- 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.
- 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.
- 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 remodeler's former customers. They can help you
decide if a particular contractor is right for you. You may want to ask:
- Can I visit your 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 they clean up after finishing the job?
- Would you recommend the
contractor?
- Would you use the contractor
again?
Understanding Your Payment
Options
You have several payment options for most home improvement and maintenance
and repair projects. For example, you can get your own loan or ask the
contractor to arrange financing for larger projects. For smaller projects,
you may want to pay by check or credit card. Avoid paying cash. Whatever
option you choose, be sure you have a reasonable payment schedule and
a fair interest rate. Here are some additional tips:
- Try to limit your down
payment.
- Try to make payments during
the project contingent upon completion of a defined amount of work.
This way, if the work is not proceeding according to schedule, the payments
also are delayed.
- Don't make the final payment
or sign an affidavit of final release until you are satisfied with the
work and know that the subcontractors and suppliers have been paid.
If you have a problem with
merchandise or services that you charged to a credit card and you have
made a good faith effort to work out the problem with the seller, you
have the right to withhold from the card issuer payment for the merchandise
or services. You can withhold payment up to the amount of credit outstanding
for the purchase, plus any finance or related charges.
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
Insist on a written contract with the builder. 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 is common on most remodeling jobs.
It is a written authorization to the contractor to make a change or
addition to the work described in the original contract. It could affect
the project's cost and schedule. Remodelers often require payment for
change orders before work begins.
- 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.
- 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.
Keeping Records
Keep all paperwork related to your project in one place. This includes
copies of the contract, change orders and correspondence with your home
improvement professionals. Keep a log or journal of all phone calls, conversations
and activities. You also might want to take photographs as the job progresses.
These records are especially important if you have problems with your
project - during or after construction.
Completing the Job: A Checklist
Before you sign off and make the final payment, use this checklist to
make sure the job is complete. Check that:
- All work meets the standards spelled out in the contract.
- You have written warranties for materials and workmanship.
- You have proof that all subcontractors and suppliers have been paid.
- The job site has been cleaned up and cleared of excess materials, tools and equipment.
- You have inspected and approved the completed work.
Where to Complain
- Division
of Public Protection in the Maine Attorney General's Office
(207) 626-8800
TTY: (207) 626-8865
http://www.maien.gov/ag/
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