Advice for dealing with contractors

I recently went through a difficult remodel and learned a lot in the process, which I’ve tried to distill here. Note that I am not a lawyer and none of this is legal advice.

Pre-hiring

• Determine if you really need to hire someone to do the task for you, or if you can learn enough in a few YouTube videos to take on the project yourself. For things like replacing a light fixture or doing drywall repair, you might feel comfortable doing it yourself.

• Check their license and make sure it has a clean history, like on California’s CSLB Check License. Get the licenses of any subcontractors before they do work and check those too. Subcontractors assigned to your project must be declared with a Preliminary Notice within 20 days after they start work. If you don’t receive this, then the subcontractor or material provider cannot make a lien on your property. You might want to include a provision in the contract that you must approve any subcontractor.

• This is more for tradespeople to do one-off fixes for things, but ask for a real estimate, even if it’s a range of typical costs for repair of common issues, instead of paying a diagnostic fee for someone to come out that’s waived if you decide to work with them. If you must go with an outfit that operates this way, ask what their hourly rate is up-front, as well as their minimum labor cost (which many have but don’t tell you until you’re seeing the estimate). You don’t want to feel forced to use a company that doesn’t seem good because of the sunk cost fallacy.

• Prefer a general contracting company that does things in-house, without subcontractors. Or just manage sub-contractors yourself, if you have the time to learn how to do that and to take a much more active role in project management. Subcontractors are a wild card in a project: people you haven’t directly vetted who may just sub-subcontract out the work to an apprentice and never actually visit. It’s much easier if the general contractor does the work personally or with people that you already know about before you hire them.

• Ask to see one of their current work sites if it’s a high-volume business. References are very easy to game, so I wouldn’t trust them. Only trust things you can verify independently, like the outcome of their finished work with your own eyes (not photos shown on a phone during the initial visit).

Post-hiring

• Specify a target date of completion is in the contract. Get a firm plan with a schedule before signing the contract, to ensure the bid is serious. Make sure product acquisition lead times are accounted for in the plan. Consider adding a provision to the contract that stipulates a schedule with a pay decrease each day the project is late. You need to have something to fall back on if the project takes months longer than it should. For projects that impact the day-to-day use of your house (like a kitchen remodel), this is even more important.

• Make sure everything you ask for is written into the contract you’re both signing. The contract should contain all the relevant details of the project that you’ve agreed to, or else those details won’t be enforceable.

• Ensure the payment schedule witholds at least 10% of the total cost until the final punch list items are complete. Make sure the deposit is below the legal maximum, as there are limits to how much of a deposit can be put down for contracting work (at least in California).

• Don’t allow demolition to start until all replacement parts are on-site and ready to be installed or the sub-contractors to do the replacement are scheduled. There’s no point in doing the demolition unless there’s a concrete plan to actually recover use of the area quickly.

• Make sure all communications are in writing, with written followups sent after in-person or phone conversations. If they want to use a chat program like WhatsApp, make regular backups of communication. Prefer e-mail.

• Photograph everything, from the initial state of the work area to in-progress work, to the final product. Get photos from multiple angles and in the wider context of the work area.

Leverage

Both sides have leverage on the process that revolve around the signed contract’s stipulations. First, the contractor has one major leverage point:

• A contractor can take out a mechanic’s lien on your house if you fail to pay according to the contract or unilaterally terminate the work prior to completion. Liens are not that hard to get if the contractor can provide evidence that a homeowner has refused to pay. Worse than that, subcontractors can take out liens against the house and often the owner doesn’t even know who they are. At least in California, subcontractors working on a site or delivering materials must be announced in a “Preliminary Notice” within 20 days of them starting work. A lien is placed on the title of the property, which can make it more difficult to sell or refinance.

Owners also have tools at their disposal:

• The state licensing board can be petitioned to investigate their license. This typically requires substantial evidence of wrong-doing and can take years to see resolution.

• Leaving bad reviews on Yelp, Angi, or trade-specific websites can put pressure on the contractor to come to a better resolution, but they have to care about their image on these sites.

• The Better Business Bureau has a formal complaint system, but similar to review sites, the contractor needs to participate.

• If a contractor is certified by an appliance or materials manufacturer, you can make a complaint with that company to push for revoking their certifications.