5 Tips For Hiring a Building Contractor

March 23rd, 2012 Featured

Hiring a building contractor can actually be one of the more risky investments that an investor will engage in. This is especially true when adequate measures for screening contractors are not in place. There are many schemes and scams that unethical individuals can use to cheat unsuspecting consumers out of their hard-won money.

Using the following 5 tips when hiring a building contractor is vital for avoiding loss and securing the most desirable services for your budget.

1. Always work with a licensed provider.

Unless a building contractor can show evidence of a real and valid license to provide professional building services, you should never make a financial commitment to have work performed. A licensed builder will generally carry all of the necessary forms of coverage for ensuring the optimal protection of your investment. They will also only work with licensed and bonded sub-contractors, ensuring that you are absolved from all forms of liability should something go awry at any stage of the building process. Without a professional license in place, consumers often have limited to no real recourse when problems arise.

2. Never work with builders who do not provide adequate contact information.

In order to avoid securing the services of an unethical cowboy builder, you must work with a builder that makes all contact information readily available. A cowboy builder is essentially a fly-by-night operation that schedules jobs and receives payment for them, but which packs up and runs once checks have been cashed and before the contracted duties have been performed.

These pseudo-companies will usually not have accessible land lines or land line numbers that they willingly pass out to prospective clients. Instead they have mobile phone numbers and post office boxes rather than a physical address or traditional phone lines. In order to ensure that you are securing services from a legitimate operation, you can look for the following things:

• A valid professional license number
• A physical address
• A land line number
• A dedicated fax line number
• Genuine references from real clients

3. Check for errors and omissions insurance

This is a form of professional coverage that will protect you from loss or damages that arise from professional work that is ill-performed, whether due to negligence or common human error. It is very much akin to the malpractice insurance that doctors use and is a vital form of protection for all builders, given the very high potential for construction errors to impact the long-term integrity and value of properties.

4. Screen referrals as diligently as you screen all other parties.

It is important to remember that not all referrals that you receive for building contractors will be honest in their intent. This is a crucial point to keep in mind when receiving referrals for building contractors from any financial institution or anyone who is affiliated with a financial institution in any way. One of the most common home equity scams is the home improvement scheme in which contractors and lenders work together to push homeowners into home improvement loans that they cannot afford. In these schemes, building contractors will recommend major home improvements or repairs and will even suggest that these are urgently needed in order to avoid substantial property damage or loss of value.

Provider recommendations that are received from other professionals usually mean that both parties stand to gain something for your business, making it difficult to determine whether or not these referrals are based upon genuine service opinions. Online referrals from people whom you are only loosely associated with should also be investigated as well. Essentially, you will need to perform all of the various steps for properly screening a contractor, regardless of how you were informed of their services.

5. Document Everything And Never Make Payment Before Having Received An Official Contract

You will need to create and retain documentation every step of the way in order to ensure a sure form of recourse for yourself, should you wind up dissatisfied with the results that you receive. The most essential documentation to have in your cache is a service contract that defines in detail the full scope of work that is to be performed. This should include details such as whether or not the builder will be responsible for the removal of construction materials and wastes from the work site and whether or not bathroom facilities for the workers will be paid for on your dime or the builder’s.

Most important of all, your contract should include a firm and fair guarantee of the work that is to be completed, as it is defined by the work scope.

Steven Michaels is a writer for LiabilityInsurance.org.uk – an online business resource.