Information on Ohio's Consumer Laws from Attorney Daniel Myers, Myers Law, LLC, not legal advice
When you engage in a remodeling or repair project, there are a lot of details to worry about, and a shortage of people able to help you discover what you need to know. Whether you are overwhelmed, shy, trusting, inexperienced, or simply the type of person that goes-with-the-flow, you need to approach hiring a contractor, allowing work to start, and paying your contractor, proactively. There are at least seven things you need to force your contractor to show you before you allow them to do any work, and well before you pay any down-payment or deposit. If your contractor can’t show you these seven things, you need to show them the door (Until they can come back with the proof).
Fully Signed Contract
If you’ve read our prior articles on steps to take before hiring a contractor, you know your contractor should be using a written contract for your home repair or remodel project. You and your contractor should sign that contract. But simply signing a contract and giving it to your contractor isn’t enough. We’ve seen many situations where clients sign a contract, and are never given a copy, or are given a copy at the end of the project with alterations apparently made. In order to prevent misunderstandings about what is going to happen, what materials are going to be used, or when you are supposed to make payments in what amounts, make sure your contractor gives you a copy of your contract before any work begins or payment is made. Don’t settle for a blank version–you want a copy of the signed version, signed by you and your contractor. In Ohio, when a home improvement or residential repair project costs less than $25,000.00, your contractor is required by law to provide you with a copy of the signed contract at the time it is signed.
A Permit (when required)
Not every project requires a building permit from your city or county building department. Most larger projects, and projects involving roofing, electrical, plumbing, or structural work, usually require permits. If your contractor tells you that no permit is needed, it’s a good idea to call your building department to tell them the scope of the work and ask them if one is required or not. NEVER PULL THE PERMIT IN YOUR OWN NAME–your contractor is doing the work, so your contractor should be legally responsible. If you obtain the permit, you may be criminally and civilly liable to correct any deficient work instead of your contractor, and your failure to timely do so could put you in jail. If your project requires a permit, or your contractor tells you they will get all necessary permits, ask for copies of the permits before you make any substantial payments (more than the permit cost) and before work begins. Permits should be posted at the job site anyways, but if you don’t see it posted, you need to ask about it. Many consumers have paid contractors many thousands or tens of thousands of dollars just to find out that no permit was ever pulled, carpenters were doing complicated plumbing and electrical work (poorly), no work was ever inspected, and now they have to pay someone else more money to fix the mess. Request the permit from your contractor and make sure it is posted on site. Make sure the contractor that obtained the permit is the same one that you hired (for building permits). That said, electrical, HVAC, and plumbing permits will usually be obtained by (and other the name of) the subcontractor for that work, because they require a special license.
Receipts for Payments (especially cash)
If your contractor is asking you to make any payment, you must be given a receipt. This is especially important for cash payments (which are not the preferred method of safely paying a contractor). If you are going to hand over a check or cash, you need proof from your contractor that he or she received it. We have sued contractors who claimed that they never cash payments made by our clients, and if there is no proof of the payment, it turns into the homeowner’s word against the contractor’s. This is a bad position to be in at trial. Demand that the contractor give you a dated, written receipt showing the amount you are paying, the previously payments, and the balance left to be paid on the project. Don’t give them the payment until they have a receipt ready for you.
When permits are required, contractors may have to submit drawings or plans for the building department, engineer, city/county architect, or zoning board to approve. Often, this is the first step to getting a permit issued. These drawings, like the permit, should be at the job site at all times. If you hired a contractor to build a new home addition, build a new home, remodel a bathroom, finish a basement, or fix-up your kitchen, demand that the drawings or plans be produced to you before you allow anything to begin. We’ve seen contractors fake their permits, trying to fool the consumer into believing that a permit was obtained. If your contractor is building a new addition or taking out some walls, etc., requesting the approved drawings or plans can help you double-check that the permit is authentic. These drawings and plans, when approved, are often stamped by the city or county official in charge of approving them.
Proof of Insurance
In order to make sure your contractor is official, and can afford to compensate you if they damage your home during the project, you need to make sure they have insurance. While insurance does not cover correcting bad work, it can cover damage done to your home by your contractor. On far too many cases we have handled, contractors had signed up for insurance, just to get the insurance certificate needed to register with the building department, and then fail to pay their premium, resulting in the insurance policy being cancelled. You want to make sure your contractor (1) can show you proof of insurance, and (2) prove to you that premiums have been paid, especially if the policy is less than 30-days old. The Certificate of Insurance form will show the effective dates of the insurance. If the beginning date is less than 30 days or so ago, it would be wise to ask your contractor for proof or payment of the premium. Cities are supposed to receive notice when a contractor’s insurance is cancelled, but not all insurance companies or agents provide that information, and not all cities actually take note of changes.
Just like insurance, it’s important to make sure your contractor is registered or licensed to do the work they claim to be able to do. You should ask your contractor to show you their registration for your city/county. Some cities do not have building departments, and sometimes county building departments oversee registration for all communities in the county. Rarely, a city, county, or other area will not require contractors to be licensed or registered. If your contractor doesn’t want to show you their registration, or says “I don’t need to be registered,” call your local building department to check. If your building department requires contractors to register (that’s the norm), then make sure they can show you their license or registration. If they are an electrical, plumbing, HVAC, or mechanical contractor, you can also ask for their Ohio Construction Industry Licensing Board (OCILB) license number, and you can verify that they are legitimate online. If the license or registration doesn’t match your contractor, you need to address that before the project starts. If your contractor is having someone else pull permits for them, that is a red flag. Who is actually responsible? Who are you actually hiring? Are they illegally working under someone else’s license? Why? If they are registered with your city/county, and your city/county is an area that requires a bond, proof of the registration will also mean they likely have the legally required bond. But again, not every city or county requires a bond.
Estimated or Expected Completion Date
This is often overlooked by consumers. Once you get a signed contract, you have the permits, and you have a competent, licensed contractor working for you, you expect that the project will begin to move forward. But you may find yourself waiting for months and months with broken promises about the start of the project, how long it will take, and you may receive requests for more money before the project starts. Your contractor should be giving you, in writing, an estimated date by which they plan to have the project completed. If this isn’t in your contract, you need it in another document, provided to you and signed by the contractor after your contract is signed. Better yet, insist that the date be handwritten or printed on the contract as “Estimated Completion Date:” Things change, projects evolve, and mother nature gets in the way, but you should know what the plan is, and where in line you fall, so that you don’t have to deal with being put on the back-burner while your contractor works on larger, more profitable projects.
This isn’t any exhaustive list of things to ask for or steps to take, and it won’t guarantee that you are 100% protected or safe. It will, as a practical matter, protect you from a lot of different, and very common, problems that arise on home improvement projects.