Consumers and Contractors Can (and Should) Work Together

I am contacted by homeowners who are in the midst of disputes with contractors and construction companies.  A home is the most Good constructionsignificant investment most folks ever make and there is a more-than-reasonable expectation that the construction and repairs to a home should be done consistent with all applicable building codes and industry standards.  Too often, however, the work promised and the work performed fall short of these targets.  I see problems stemming from a failure to adequately communicate the scope of the work to be done (i.e. get it in writing) as well as problems rooted in a contractor’s provision of substandard materials and/or less-than-acceptable workmanship.  Now, in fairness, sometimes homeowners make unreasonable requests or seek to get more than they bargained for—not good.  So how do we bridge this gap?

First, the homeowner should do his or her homework regarding deciding on the contractor to be hired.  The next step is to make sure all essential promises are placed in a written agreement signed by both parties—homeowner and contractor.  The agreement should identify the owner of the property upon which work shall take place, identify the contractor that shall perform the work, state the nature of the work to be done, the location at which work shall be performed, list the major materials or equipment that may be needed, and state the estimated price of the work.  Be sure to get all warranties and guarantees in writing.  Another key term of any agreement is payment.  Preferably the homeowner should never pay the full construction/repair cost until the work has been completed and approved by the homeowner.  If a contractor demands full payment before completion of the project this could be a red flag and cause for the homeowner to look elsewhere. It is reasonable for a contractor to obtain a portion of the contract price before work begins so as to purchase materials, tools, equipment, and other items needed for the job.  If a bank is lending the homeowner money for the construction/repair work the payments to the contractor are often made periodically and on a schedule.

The homeowner should demand proof of the contractor’s license (if the contractor claims to be licensed).  In North Carolina, unlicensed contractors can operate legally so long as the value of the project is not $30,000.00 or more.  To the extent the contractor has at least 3 employees the contractor is required to maintain worker’s compensation insurance which covers the employees in the event they are injured while working on the project.  The homeowner should ask for a copy of the contractor’s certificate of insurance for worker’s compensation as well as general liability insurance (covers the contractor in the event any employees injure other persons and/or damage property while working on the project).  If the contractor claims to have a surety bond instead of insurance the homeowner should ask for a copy of the certificate of coverage for the bond.  It would not be unreasonable for the homeowner to call the insurance company or bond company/surety to verify the coverage is valid at the time of the project.

Over the course of the project or at some point before final approval is given by the homeowner there should be a written punchlist of items which need to be corrected, redone, or otherwise addressed before the work can be considered complete.  If the project will require permits and approval from the local planning or building inspections department those should be finalized and documented before final payment is made by the homeowner to the contractor.

This is by no means a comprehensive checklist of to-do items for a construction/repair project but it gives you a sense of the highlights.  Homeowners must be smart when being asked to spend or borrow sizeable sums of money for construction and repairs.  Contractors must be fair and honest when scoping and performing construction and repair work.  If both parties do their part both parties should leave the project happy.  If not one of them may eventually call me………..



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