The Better Business Bureau (BBB) consistently ranks contractor fraud as its number one complaint. Don’t be a victim. If you (or someone you know) is thinking about hiring a contractor, please read or share these tips straight from the BBB before signing anything.
- Obtain bids (from at least three licensed contractors) based on building specifications, quality of materials, labor and time to complete the project.
- Ask for customer references, and be sure to contact them. If possible, check out previous work.
- Contact the Better Business Bureau (BBB) for a report on the contractor and review site thoroughly for further advice.
- Ask to see the contractor’s pocket license and another form of ID.
- Call the Contractors State License Board to see if the license is valid and if a bond is in place.
- It’s very important that your contractor have property damage and personal liability insurance coverage, and, if the contractor has any employees, workers’ compensation. Insist that the insurance broker send you certificates of insurance.
Remember, a contractor may not ask for more than ten percent of the total contract price, or $1,000 (or two percent or $200 in the case of swimming pools), whichever is less, as a down payment. (Insist upon a lien release from all subcontractors and suppliers before you pay for any work).
Anything you sign may constitute a contract. Before you sign a final contract, be sure it includes the following:
- the name, street address (not just a post office box), and local telephone number of the contractor;
- if you must obtain a loan to pay for the project, that the agreement is valid only if you obtain financing at a given rate;
- a written description of all work to be done, including a detailed description of the kind and quality of materials to be used;
- a bid based on the job, not by the unit;
- a price breakdown for both labor and materials;
- starting and completion dates;
- the schedule for releasing payments to the contractor;
- a written statement reiterating any oral promises made by the contractor or sales representative, including any warranties on materials or labor;
- that the contractor will obtain the necessary building permits.
Don’t sign a completion certificate until you’re satisfied that the job has been completed according to the contract and inspection has been completed by local building authorities.