Law & Society

ALWAYS USE A LICENSED CONTRACTOR

Check with your local consumer affairs office to find out if the proposed contractor is licensed, and if there are any pending complaints against the contractor. Never hire and unlicensed contractor, and make sure they have proof of insurance.

GET REFERENCES

Ask for previous customers of the contractor, and contact them. They may be shills, but if a contractor cannot even provide three references, avoid him. Check for references, after you check for licenses and complaints with the consumer affairs office.

NEVER PAY CASH

You must be able to document everything you paid the contractor, both for tax purposes, and in the event of a dispute. It is also a good idea to withhold a "retainage" of at least 5% of the contract price, to ensure that the work gets done.

KNOW YOUR CONTRACT RIGHTS

The rights of consumers varies from state to state. You need to know what your rights are with respect to dealing with home improvement contracts, and these contracts should always be in writing. In the contract, specify whose obligation it is to obtain permits, variances, and other construction documents. Also, you want to include a delay penalty, a retainage amount, and that in the event subcontractors are being used, that they provide you with lien waivers. (A statement that they have been paid by the contractor and will not lien the job). This stuff is only the beginning. You need competent counsel to advise you--before you sign.

AVOID FINANCING THE IMPROVEMENT THROUGH THE CONTRACTOR

This might not even be legal in your state for the contractor to offer. Usually you will do better through a bank or a credit union.