If you’ve been following our series on avoiding contractor headaches, you know that we’ve been talking about how imperative it is to do your research beforehand. Today we’ll be taking a closer look at two more of the most important aspects of hiring a contractor: payment options, and the absolute necessity of a clearly worded contract.
Understand Your Payment Options BEFORE Hiring a Contractor
Now that we’re finally on the subject of price, this is the part that can really come back to haunt you if you’re not careful. NEVER pay with cash! Always pay by either check or credit card - something that’s traceable and leaves a paper trail. This is an important part of protecting yourself from not only scams, but also from any possible future financial disputes.
If it’s a larger project, you should arrange financing for it. Try to limit your down payment as much as possible. The reasons for this should be obvious, and not only that, many states’ laws limit how much a contractor can ask up front. Contact your local or state consumer agency to find out what the down payment limit is in your state before even having this conversation with the contractor.
If possible, come to a written agreement where you only make a payment after each specific segment of work is completed. If the workers can’t keep up with the assigned schedule, payment is also delayed.
Get a Written Contract BEFORE Hiring a Contractor
Like with the payment plan, EVERYTHING should be in writing. There should be no fancy wordplay, and you should be able to understand everything fully. If you don’t understand it, don’t sign it. And if your state doesn’t require a written contract, ask for one anyway. You’re the customer, and you don’t have to agree to anything you’re not comfortable with.
Before you sign it, the Federal Trade Commission says to make sure the contract includes the following:
- The contractor’s name, address, phone, and license number.
- Estimated start and completion date.
- Payment schedule for the contractor, subcontractors, and suppliers.
- Contractor’s obligation to get all necessary permits.
- The contractor’s statement that they hold all necessary insurance.
- How change orders are handled. A change order is a written authorization to the contractor to make a change or addition to the work described in the original contract, and could affect the project’s cost and schedule.
- Detailed list of all materials including each product’s color, model, size, and brand. If some materials will be chosen later, the contract should say who’s responsible for choosing each item and how much money is budgeted for it (this is also known as the “allowance”).
- Information about warranties covering materials and workmanship, with names and addresses of who is honoring them - the contractor, distributor, or manufacturer. The length of the warranty period and any limitations also should be spelled out.
- What the contractor will and won’t do. For example, is site clean-up and trash hauling included in the price? Ask for a "broom clause" that makes the contractor responsible for all clean-up work, including spills and stains.
- Any promises made during conversations or calls. If they don’t remember, you may be out of luck - or charged extra.
- 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.
At Freeman & Sherburne, we are not lawyers, but we will guide to you make sure you are aware of possible issues that can arise when you hire a contractor, and what your best possible options are. And we can refer you to other professionals whose work and credentials are verifiable. Avoid the scams. Reach out today.
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