The Seven Biggest Mistakes People Make

When Hiring A Remodeling Contractor

By John Fries

Stop me if you’ve heard this one.  A young couple buys their first home and they decide to remodel the kitchen.  After interviewing a number of contractors and looking at hundreds of different cabinets, countertops and fixtures, they make all their selections and give the contractor a $4,500 deposit.  The project starts routinely enough when the contractor rips out all the old kitchen cabinets, but weeks after the demolition the new cabinets still haven’t arrived.  After leaving a number of voice mail messages, each one more frantic than the last, the young couple finally realizes that the contractor has taken their money and skipped town.

 

Or how the one about a local woman who hired a home remodeling contractor for her kitchen project.  When all the work was completed to her satisfaction, the woman paid the final installment to the contractor.  However, just two days later the contractor filed for bankruptcy and refused to pay the subcontractors who had worked on her project.  The unpaid subcontractors demanded payment from the homeowner and ultimately put a lien on her property in order to secure payment.  Even though she had paid the contractor for the subcontractor’s work, she was still legally responsible for this payment.  The woman had to pay the subcontractors out her own pocket and in effect, ended up paying the subcontractors twice.

 

These are just a couple of the horror stories we’ve heard from people who have had bad experiences with home remodeling contractors.  The truth is that more than a few contractors have given the home remodeling industry a bad reputation.  So bad in fact that nationwide, more complaints have been filed against the remodeling industry than every other industry, except one.  (Can you guess which industry had the dubious distinction of being the #1 most complained about industry?  The answer is at the end of this article.) 

 

As a State Certified Class A Contractor serving Sarasota, Manatee and Charlotte Counties since 1984, I know the biggest mistakes people make when hiring a remodeling contractor.  Here is a list of my top seven:

 

• Mistake #1: No Background Check on Contractor- Many people hire one contractor over another because of price, or because they feel “comfortable” with a certain contractor.  While these are important considerations, make sure you do a complete background check on any prospective contractor.  Ask for references of work done in your neighborhood and actually talk to their past customers to find out if they were satisfied.  Also, contact the Better Business Bureau and check with your local clerk of the court to see if the contractor has any pending lawsuits against him.

 

• Mistake #2: No Building Permit- Although it is the remodeling contractor’s responsibility to secure the building permit, it is your responsibility to check with county authorities to determine if a building permit is actually needed.  If a building permit is needed and is not secured, the county can intervene at any stage of your project and force the contractor to rip everything out and start over.  Don’t take that risk.  Insist that your contractor secures a permit before the project has begun.

 

• Mistake #3: Incomplete Description of The Remodeling Work To Be Done- It sounds pretty basic that a contractor would itemize all the work that needed to be done and provide exact specifications on all cabinets, countertops and fixtures, in writing.  Yet many contractors will omit some of these details so they can pad your bill by making change orders once the project is underway.  Although some changes are unavoidable, insist that your contractor itemize every detail of your project and include it in the contract.

 

•  Mistake #4: Taking The Lowest Bid- Taking the lowest bid on your remodeling project is not always a mistake, as there are some good contractors who will work for less.  But the old saying, “You get what you pay for” has survived for a reason.  The best contractors are seldom the lowest bidders.  Beware the “deal of the century” offer and use your common sense when it comes to selecting a contractor to handle your project.

 

• Mistake #5: Inadequate Insurance Coverage: Few homeowners ask prospective contractors about insurance coverage and those that do fail to require documentation to prove that the contractor actually carries the insurance they claim.  The simple fact is that some contactors are “one person shops” and thus are not required by the state of Florida, to carry workmen’s compensation.  So if an uninsured contractor gets injured on your job, they could seek compensation from you.  Make sure that the contractor you hire carries both general liability insurance and workmen’s compensation coverage and obtain proof of that coverage, direct from their insurance company.

 

• Mistake #6: Paying Too Soon- Most remodeling contractors require three payments.  The first is the initial payment or deposit and it is due before the project has begun.  The second payment is usually due at some agreed upon point in time, when a significant portion of the project has been completed.  And the final payment is due upon completion of the project.  But be weary of contractors who require too much up front (it should be no more than 25%) or ask for the final payment too soon.  Make sure to hold off on the final payment until all the work has been completed and inspected, and you are in possession of any warranties.

 

• Mistake #7: Not Securing A Lien Release From Subcontractors- According to Florida law, any subcontractor that works on your property (like plumbers and electricians for example) has a right to seek payment against your property if they are not paid in full.*  Just because you paid your contractor doesn’t mean that the contractor has paid his subcontractors.  If your contractor goes out of business or just decides to withhold payment to his subs for any reason…you are liable.  Before making any payment to the contractor, protect yourself by insisting on lien releases from all the subcontractors involved in your project. 

* Note: In order to collect on the lien, the subcontractor is required to file a “Notice To Owner” within 45 days of commencement of the project.

 

Quiz Answer: By the way, if you were wondering which industry had the most complaints filed against it…it is automobile repair shops.

 

John Fries is a Certified Class A remodeling contractor.  He is also the President and Owner of Accutech Restoration & Remodeling in Sarasota, Florida.