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Are You Hiring A Contractor?

Last year in the State of California, the State Contractors License Board arrested over 100 people posing as licensed contractors, when in fact these individuals did not have proper licensing or insurance.  They were offering plumbing, HVAC, carpentry and other services to homeowners and small businesses. This illustrates the importance of hiring a professional licensed contractor for your job. Did you know that businesses can be held liable, and even arrested, for using an unlicensed contractor?  Also, in most states, if an unlicensed contractor gets hurt on your property, he could sue you and win!

Here are a few things that a professional licensed contractor must do:

  • Pass all licensing requirements
  • Provide insurance and bonding information to the state
  • Publish key company information
  • Have references

How to hire a contractor:

  • Check with the Contractors State License Board
  • Ask for current certificates of insurance for general liability, workers comp, etc.
  • Get references
  • Ask a friend for a reference of a contractor they have used
  • Go to contractors associations to obtain a list of contractors
  • Never pay with cash
  • Keep records of all transactions (save them for at least 5 years)
  • Don’t make final payment until you are satisfied with all the work
  • Never pay 100% in advance
  • Get more than one bid
  • Get all bids in writing and ask for 100% of costs to be broken down
  • Request a guarantee

Hiring Process

  1. Get written estimates; don’t automatically choose the lowest bidder. Ask for an explanation to see if there’s a reason for the difference in price.
  2. Ask questions:
    1. Will my project require a permit?
    2. Are you hiring sub-contractors, make sure they have the same insurance.
    3. Ask for references
  3. Never pay with cash. Hold final payment until you are completely satisfied.
  4. Get a written contract; include start and end dates, contractor’s duties, detailed list of work to be performed, how change orders are to be managed, any warranties, any promises made, and clean up procedures.

Final Thoughts

  1. Review all bills.
  2. Request signed lien releases from all major subcontractors and suppliers before making final payments.
  3. If you have a problem with an improvement project, first try to resolve it with the contractor. Many disputes can be resolved at this level. Follow any phone conversations with a letter sent by certified mail, and request a delivery receipt. That’s your proof that the company received your letter. Keep a copy for your files.




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