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Seven Steps for Hiring a Builder or Construction Contractor


Clients and the public frequently ask “what should I have done differently,” or “what should I do to make sure I’m protected from a bad contractor.”  The truth is there is no perfect, sure-fire way to guarantee your contractor will be perfect.  There is no guarantee.  There is almost never a perfect project, either.  However, there are some steps you can take so that you can take comfort in the fact that you did everything you could do.

STEP ONE:  MAKE A LIST OF POSSIBLE CONTRACTORS

Before you even meet with a builder or contractor, you should make a list of possible companies you could hire.  Instead of looking online or in the phone book first, many people suggest starting by asking the people you trust.  Your family, friends, and neighbors probably have recommendations for contractors they have used and liked. If they don’t, you can check with other companies you know and trust that work with contractors.  But don’t stop there.  You can check with local building supply stores to see if they know good contractors that pay their bills.  Add these contractors to a list.

STEP TWO:  RESEARCH YOUR CONTRACTOR LIST

Once you have made an initial list, start looking these companies up.  Do they have websites?  Do they file a lot of mechanic’s liens (check the county records at the Recorder or Fiscal Officer websites)?  Do they get sued a lot or sue their customers a lot (check the county court records for the courts around you)? How are their BBB, Angie’s List, Yelp, Google, Facebook, or other reviews?  Do they have complaints?  Do the complaints sound legitimate?  Did you see anything that immediately makes you reconsider even thinking of them?  Do they have a lot of complaints against them in the Attorney General’s office?

Most importantly: are they a licensed or registered contractor?  A lot of this information can be found online.  You should also check with your local building department, or if the contractor is a plumber, electrician, HVAC, mechanical, or other specialty trade, check for their licensed with the Ohio Construction Industry Licensing Board or your state licensing board if you live outside of Ohio.  Any plumber or electrician should be working under a state license, and should be able to tell you their number.  General contractors, carpenters, and roofers do not currently have state-wide licensing in Ohio, but all contractors should be registered with your local building department.  Remember, contractors and builders can register with the building department after you talk with them, as well.

Use this information to make a shorter list.

STEP THREE:  TALK TO THE CONTRACTOR

Once you’ve done your research, consider calling the contractor to ask them questions.  Ask them about the issues important to you, but consider including:

  • Do they do the type of project you want to have done?
  • Have they done projects as big (or small) as yours?
  • Are they willing to provide references from the business they buy from (material suppliers)?
  • Will they show you examples of previous work and let you talk to previous customers?
  • Do they have time to get your project done when you expect it to be done?
  • Do they use subcontractors or employees?  How long have they worked with them?
  • Do they offer a written warranty? (there are often automatic warranties in Ohio under the law, but sometimes written warranties are provided, too).
  • Are they insured, do they have workers compensation coverage, and can they get a license and bond in your city?

There are many other questions to ask, but this is a good start.  From this, you have a better idea whether the company is available to do the work, if they are financially secure and responsible, if they are reliable, and if you like the personality of the contractor.  You should again re-evaluate your list.

STEP FOUR:  MEET THE FINALISTS

After the you arrive at your short list, pick a few, contractors to meet with, and ask them for an estimate.  You may find some of the contractors arrive late, or not at all.  Some may never get you a written estimate.  Ask them more questions, like where they currently doing work, and make it a point to drive by or visit that project to see how it’s moving along and looking.  Make sure you are comfortable with the contractor and feel like they listen and take your concerns seriously.  Depending on the size of your project, you will be working with them a lot, and communicating a lot of information to them.  First impressions mean a lot.  If your “gut” tells you to avoid someone, listen to it.

STEP FIVE:  IGNORE THE LOW BID OR LOW ESTIMATE

This is so important that it gets its own step, and not just a mention in Step 4.  Everyone wants a deal, but often in construction the lowest estimate is low for a concerning reason.  We often see clients who hired a low-bid contractor and later find out the contractor left out a lot of the work that needed to be done, couldn’t do the work (and therefore could not estimate it accurately), or wants more and more money to complete the job.  While the most expensive estimate may not be the best, in my experience it is more often true that you get what you pay for.  We have sued the high-bid contractors before for violations of Ohio law, bad work, or misrepresentation, but it is more common that we sue the low-bid contractors and builders.  Please do yourself a favor and ignore the low-bid.  Otherwise you might be setting yourself up for more problems later.

STEP SIX:  DETERMINE THE FINAL SCOPE OF YOUR PROJECT

Now that you have a general idea of proposed cost, and you have narrowed your contractors down to just a couple that you trust, you need to determine what exactly you want them to do.  Some contractors have relationships with architects or designers and can get the drawings, prints, plans, specifications, and scope written up for you.  Others will want you to handle this on your own.  Regardless of the route you take, make sure you get the drawings and specifications in writing as to everything you want done, all the way down to the specific model or price range for appliances or specialty items.  If you want a room painted a specific color, put it in writing.  If you want your floor boards screwed and glued instead of nailed, put it in writing.  If you don’t want builder-grade windows…you get the picture.

This step may cost you some money.  Some contractors will provide design details for free as part of their estimate, while others will expect compensation for pre-construction services.  If you are expected to pay for it, get that agreement in writing.  Once you have the specific scope of the project, you can actually compare apples to apples with bids and final estimates for your last two or three contractors.

STEP SEVEN:  PUT YOUR AGREEMENT IN WRITING

Never hire a contractor on a handshake or oral agreement.  It’s dangerous, it leaves a lot of room for miscommunication and misunderstanding, and its generally a bad idea.  Many contractors are required by law to put your contract and agreement in writing.  You’ll want to make sure the contract includes or “incorporates” the drawings and specifications that detail the full scope of the work.  If your contractor made any oral promises to you, including warranties, make sure they are in writing in the contract.  Things that you want to make 100% sure are in your contract are:

  • the contract price;
  • incorporation of the scope of the work and materials;
  • payment terms and payment schedule (avoid cost-plus or unlimited/unknown cost contracts);
  • requirements that the contractor give you lien releases from them and subcontractors at the exact same time you give them payments;
  • estimated or initial completion date;
  • all oral promises or representations that were made to you before you sign the contract (and after);
  • a description of your cancellation rights;
  • a requirement that any changes to the scope or price need to be agreed to in writing signed by you;
  • a statement that your contractor is responsible for all permits, licensing, and registration required by law;
  • proof of insurance;
  • a list of all subcontractors if any are going to be used.

Is this a complete list?  No.  But it’s a great starting point, and if all of these terms are included, you can feel more comfortable that your are dealing with a responsible contractor, or at least one that you can actually hold responsible later.  Make sure you are given a copy of the contract the exact time that you sign it, along with all changes made to it.  If they can’t give you a copy there, take a picture with your cell phone of every page, including any changes you made to it.

There are also things you want to absolutely avoid in your contract.  If you see them, ask that they be removed before you sign it, or cross out the sections before you sign it:

  • attorney fees if the contractor has to sue you to collect money;
  • unreasonable interest rates;
  • arbitration clauses;
  • liquidated damages (unless they are in your favor only);
  • any waivers of warranties or rights or remedies;
  • any choice of court venue (i.e. location where lawsuit must be filed) which is far away from you;
  • anything that allows changes to be made or costs to be added without your prior written approval.

If anything changes after you sign the contract, make sure all changes that you agree to are in writing, and signed by you before any change is actually made to the work or price.  Demand that all change orders be in writing.  Demand estimates for any increased or changed work be in writing before you agree to the extra cost.  If promises are made to you for free or no-cost extra work, get that promise (and the fact it is free) in writing.

There are many other steps to follow before letting work start or before making final payment to your contractor, but these steps will put you in as good a position as any for moving forward.

2 comments on “Seven Steps for Hiring a Builder or Construction Contractor

  1. Taylor Bishop
    November 7, 2017

    Thanks for going over some things to do when getting a builder or a contractor. I’m glad that you mentioned that you should ask them about any questions you may have thought of after researching and learning more about it. I can definitely see the benefits of this, especially if it can help you understand more about your project and what to expect in the building process.

    • Daniel Myers
      November 7, 2017

      It’s good to get informed and stay informed during the process. It prevents miscommunication, unmet expectations, and hard feelings. If everyone communicated more with homeowners while the project was ongoing, I’d be a lot less busy, and that’s fine by me.

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This entry was posted on November 1, 2017 by in By Daniel Myers, Consumer Law, Hiring, Ohio, Uncategorized.

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