What Consumers should look for in a Contractor
Your home is probably the most expensive investment that you will ever make. Before you spend thousands of dollars on building or remodeling your home, you need to do your homework and under stand your role as the consumer. The following information is provided to help you with the process of selecting a contractor:
- Your first step is to come up with a plan
- Shop for Quality – Not the Lowest Price
- Important Information on Remodeling Contracts
- Obtaining Building Permits
- What Consumers Should Know about Their Contractor’s Insurance Coverage
- Service and Warranties
- Resolving Disputes
- Court Action
- The Guaranty Fund- A Note for the Remodeling Consumer
Your first step is to come up with a plan
Think your building project though from start to finish. Consider special needs that you and your family may have, or may have in the future. You may want to consider a professional architect or designer to help you come up with a plan and a realistic budget.
Think about the materials and finishes you may want to use, such as the siding, roofing, kitchen cabinets, etc. A visit to the local lumberyard or home center may be of some help. You may find home magazines helpful, as well as talking with friends and neighbors about what they have done. In this day in age of the internet, information is just a click away. All of the major building suppliers have web sites with loads of information that you will find helpful.
List your ideas and your suggestions. Make a rough sketch of what you had in mind for a floor plan. This will give us a good starting point from which to start making your dream into a reality.
Shop for Quality – Not the Lowest Price
The best way to learn about your contractor is to record as much information as possible about their reputation and the quality of their work. We will gladly give you a list of homeowners like yourself that trusted us to turn their dream into a reality. You can drive by these homes and view the quality work that was done on these homes. Talk with the local Building Department to verify that we do quality work and are fully licensed. Contact the local Home Builders Association, and verify that we are a member in good standing and adhere to their Code of Ethics. Contact the State Contractors Registration Board to verify that we are a fully licensed Building Contractor in Good Standing. To obtain a Massachusetts Construction Supervisors License, builders must demonstrate a though exam performance and prior construction experience. They must posses the necessary qualifications to perform and oversee the construction, renovation, and repair of the structural elements of buildings, otherwise known as your home. Remodeling contractors must also register with the state as a remodeling contractor.
Important Information on Remodeling Contracts
While it is advisable to put all contracts in writing regardless of the cost of the work being done, it is the Massachusetts state law that any home improvement contract over $1,000 must be in writing. If a contractor violates this provision, his or her license may be suspended or revoked, as well as a possible fine and criminal prosecution. Valid remodeling contracts over $1,000 must contain several provisions and provide some consumer cautions and special notifications. For instance, all contacts must provide complete identification of all parties involved with the proposed job, including the registration numbers of the contractor. It must also include:
- A complete description of the work to be done
- A detailed list of specifications and materials to be used
- Starting and completion dates
- The total price of the work to be done and a payment schedule
- A copy of the contractors insurances
- Signatures of all the parties involved
It must conspicuously display notifications about a Consumers Right to cancel the contract within three days of signing, any information on applicable warranties, and a warning not to sign the contract if there are any blank spaces. It must also be noted on the contract that it is the responsibility of the contractor to obtain all the building permits, and that if a homeowner obtains them, the homeowner will be excluded from applying for compensation through the Guaranty Fund if a dispute arises. A contract must also inform the consumer that state law requires all applicable contractors and subcontractors be registered with the Director of Home Improvement Contractor Registration.
Look over your contracts carefully before signing. Any contract which is presented to you without meeting there requirements is invalid and could affect your protection under the law. If you are unsure of anything in the contract, contact an attorney to review the document. If everything is in order, sign the contract and make sure you receive a fully executed copy of the contract before the work begins. Fricot Building & Remodeling Inc. has all of these important provisions in their contract.
For more information on contract specifications and to receive a copy of the pamphlet entitled, A Sample Home Improvement Contract, contact the EOCA Consumer Hotline.
If you obtain necessary building permits on your own because you plan to self-contract your home improvements or because you think you are doing the contractor a favor, you should know that doing so will reduce your options under the law, should a dispute arise. It could also extend your personal liability for any work related accidents or problems. When you hire your contractor, make sure that they obtain all of the needed building permits. Fricot Building & Remodeling Inc. always takes care of obtaining all the needed building permits for your job.
What Consumers Should Know about Their Contractor’s Insurance Coverage
Uninsured contractors can expose unwary homeowners to financial hardship. All responsible contractors should carry appropriate insurance to protect their clients, their employees, and themselves. But what insurance should your contractor carry to protect you, the homeowner?
Your contractor should carry Workers Compensation Insurance and Liability Insurance. To protect yourself, you should insist that your contractor and subcontractors carry Liability Insurance. This insurance coverage protects you if your property is damaged, or if the contractor, or subcontractors is/are accidentally injured during the course of the work. Proof of your contractors Liability Insurance helps you substantiate that this contractor operates as an independent business, and is not your employee. Therefore, you are not responsible for injuries, pain, suffering, or lost wages, provided the injuries were not caused by you.
Get a copy of your contractors Liability Insurance. Make sure that the policy’s effective dates are current and that the policy dollar coverage is sufficient to cover any potential claims for injuries or damages. Be sure the Insurance Certificate covers the period the workers will be on the job. It is reasonable to expect that Professional Contractors, such as Fricot Building & Remodeling Inc., who carry all of the appropriate insurances will have greater business overhead expenses and that their bid will be a bit higher than those of an irresponsible contractor, who take business shortcuts, so they can make a bigger profit at your expense. However, it is a small price to pay to hire the right contractor for the job, and forego the risk of exposing yourself, your financial future, and your home to a contractor who is improperly insured or uninsured.
Workman’s Compensation Insurance
Workman’s Compensation Insurance pays the medical bills and lost wages to any employees of a company who are injured while working on your house. Only corporations or employees of companies are covered by Workers Compensation Insurance. If your contractor’s business is incorporated, then everyone in that corporation must be insured by Worker’s Compensation Insurance. If a contractor should, but does not have Workers compensation Insurance for his or hers employees, the law exposes you, the homeowner, to litigation by the injured party. Homeowners increase their risk of exposure if:
- the homeowner takes out the building permit for the work to be done,
- the homeowner pays the contractor by the hour,
- the homeowner supplies or loans the tools and materials to get the job done,
- or the homeowner gives directions on how to perform the job.
If any of the above conditions apply, the homeowner may, in the event of a lawsuit, be found to be acting as their own general contractor and could be responsible for anything that happens to the subcontractors or their employees during the course of their work.
If your contractor tells you that, he or she has Workers Compensation Insurance, ask to see a copy of the certificate and verify that is current.
Service and Warranties
Make a special effort to learn what type of customer service and warranty protection your contractor offers. Do not wait until after you have purchased your home or remodeling project to find out how to correct a problem, if one should develop. A professional Builder, such as Fricot Building & Remodeling Inc., will have some form of a written warranty. Find out the length of the warranty, and if it is backed by Insurance Company, and what procedures to follow if a problem arises, if it is backed by an Insurance Company. Most contractors back their own warranties on workmanship and materials, typically for a period of one year. A warranty backed by an Insurance Company costs more, but offers long-range protection. When choosing a contractor, be thorough and ask a lot of questions. Get as many specifics as possible. Never hesitate to ask a question for fear of sounding stupid, or uninformed. What seems like a stupid question may yield an informative answer, or avoid any future misunderstandings.
If you have a contract dispute with your contractor or you think that the job he or she did was shoddy, or done in an unprofessional manner, there are options for you to explore if the problem cannot be resolved privately. If the contractor is a member of the National association of Home Builders, the consumer can contact the association to attempt to an informal resolution of the problem. A good first step would be to contact the Attorney General’s local consumer group in your area for help with informal mediation. Beyond that, you are encouraged to fully investigate the following alternatives. The cost and effectiveness depend largely on your particular situation.
Homeowners should be forewarned that once a dispute enters this stage, it can consume a lot of time, effort and energy for both parties before it is resolved and/or compensation is awarded.
If a consumer has a dispute against a registered contractor, or subcontractor, the consumer may try to resolve the dispute through a state-approved arbitration program. The consumer selects an approval form and pays a fee, based on a sliding scale linked to the size of the claim. The fee may include a non refundable processing charge that would be kept in the event the case is withdrawn before making it to a hearing. Once the arbitration firm has been chosen and the application fee has been paid, the case is heard with both parties present and a decision is rendered. An arbitrator’s decision is final, but may be appealed by either party in a court within 21 days of the decision.
*For more in formation and to receive a listing of all approved arbitration firms and a description of the sliding fee scale, call the Executive Office of Consumer Affairs (EOCA) Consumer Hotline at: Phone (617) 727-7780 E-mail: firstname.lastname@example.org or fill out the on-line form for the quickest response.
A consumer always has the option of bypassing the arbitration process by taking the dispute directly to court. Except for arbitration by mutual agreement of the parties, a contractor is limited to using the court to resolve any dispute against a homeowner. Either party may bring dispute to Small Claims Court if the monetary claim is less then $1,500.00.
A judgment received from either a court action or an arbitration session fully preserves the rights of the parties to pursue the other remedies, including additional legal action and, in the event of a consumer involved in a remodeling dispute, compensation from the Guaranty Fund (See below)
*For more information about taking a case to Small Claims Court, call the EOCA Consumer Hotline and ask for the “Consumer’s Guide to Small Claim Court”. For help with preparing a court case, which will result in claims in excess of $1,500.00, and for legal advice, you are urged to contact an attorney for advice.
The Guaranty Fund- A Note for the Remodeling Consumer
If a judgment has been awarded to the consumer, and the contractor refuses to pay the award, or defaults, due to bankruptcy or flight, remedies are still available through the Guaranty Fund if the consumer has used a Registered Home Improvement Contractor.
The fund was created as a source of last resort to reimburse consumers who have been awarded judgments that have not been paid. Money in the fund comes from a one-time assessment levied on Registered Contractors based on the number of employees, which are on the contractor’s payroll.
When a claim is paid out to a consumer because a judgment was not paid, the responsible Registered Contractor is obliged to reimbursethe fund with interest within 30 days. If a contractor fails to do so, he or she may face administrative fines, revocation of his or her registration, and in most extreme cases, criminal prosecution. To apply to the fund, a consumer must file the claim within six months of the initial judgment made by an arbitrator or court, and demonstrate that all reasonable efforts to collect the judgment award have been exhausted. In most cases, this will mean that the last step prior to applying to the fund will have to be a court proceeding, regardless of the option used to secure the initial judgment.
Claims of up to $10,000.00 in actual losses may be recovered through the Guaranty Fund. However, if a single contractoris responsible for more than $75,000 in claims to the fund within a 12-month period, no further claims may be awarded until either the contractor reimburses the fund, or a new 12-month period begins. If actual losses exceed what is paid out through the fund, the consumer may seek other remedies to recover those additional costs.
To find out the standings of s specific contractor, call the Director of Home Improvement Contractor Registration at (617) 727-8598. For more information about the Guaranty Fund, reimbursement, or an application, call the EOCA Consumer Hotline at (617) 727-7780.