Tips For Hiring A Contractor (SmartMoney magazine)

• Lawsuits – Run a check on the contractor’s name at the courthouse, hunt for license suspensions or disciplinary actions.  Check the Better Business Bureau as well, contractors are number 16 on the list of most-complained-about sectors.

• References – Evaluate multiple references, in person, both recent and older ones.

• Architect or designer – The key to avoiding problems is to plan and then to plan some more.  Have an architect or designer come up with a drawn plan and a materials list.  He can also be your bad cop; to make sure contractors don’t stray from the plan.

• Multiple bids – At least competing offers will give you a solid sense of what the project is worth.  Make sure the various bids contain the same elements so you’re comparing apples to apples.  Don’t automatically go with the lowest bid, which may be artificially low to get you to sign, but with the best combination of price and quality.

• Get it in writing – Have an attorney go over the contract, and take out offending provisions that a contractor might try to foist on you – like binding arbitration, which could take away your ability to sue.  Oral agreements are virtually worthless, so get everything in writing right down to the brand names of products being used.

• Insurance and licenses – A reputable firm will have general liability insurance and pay workers’ comp.  If it says its subcontractors are self-insured, check that too.  Get a copy of the insurance documents, and double-check the dates covered.  Same goes for licensing, which usually will be a general contractor’s license but may be specific to the particular trade.  A good web site for due diligence: www.contractors-license.org.

• Paper trail – If things start going wrong, put your concerns in writing and send them to the contractor, certified mail and return-receipt.  If you face a legal battle down the road, you’ll have the proper documentation to back up your claims.  Research the state and local consumer protection agencies that will be able to help you at www.consumeraction.gov.

• State Board – If you do all your homework and still feel as if you’ve been snookered, take your complaint to the state licensing board.  If your state has one you can probably find it at www.nascla.org.