Sharon, Home Owner in San Francisco, CA

What to know when hiring a contractor?

Asked by Sharon, San Francisco, CA Thu May 17, 2012

What are things to be aware of before hiring a contractor? Which documentation or certifications are important to review?

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Answers

32
Chris Barnes’ answer
F.Y.I. homeowners! What Steve said about using the same subs is very important. I think you should ask your contractor if they cycle subcontractor or use the same ones. Every time a homeowner or contractor hires a new subcontractor they are a t risk.

Advantages to using the same subs

1. Better quality control. You know what your going to get.
2. Customer relations. You know how they act. Professionalism.
3. You know the pricing. After doing this for some time the GC knows how to price projects without sub involvement.
4. Schedule. Subs begin to complete projects on time with little management. They work together to achieve the common goal. They solve small problems with little or no involvement from GC or homeowner.

disadvantages

1.Price fix. They tend to charge a little more for changes because they are already contractors of record.

On the topic of fast payment to subcontractors.

I absolutely agree.
The subs are far better at solving problems and jumping to GC/Homeowner demands when they are paid fast. Just dont pay them more then they are owed. Most successful contractors operate in this manner. Great Thread Steve. Thats the kind of contractor you should interview for residential remodel or new construction!
1 vote Thank Flag Link Sat Jun 2, 2012
BEST ANSWER
It appears that other contractors have sufficiently answered your question.

But one thing I would add, as Operations Manager for Bay-Marin Construction in Marin is: make sure any contractor you hire as good liability insurance. Check out the proof-of-insurance certificate they (may) supply to you. What are the coverage limits? Who is the insurer?

Check out the insurance company, too, because many are not well-rated. Fly-by-night contracting insurance is proliferating, unfortunately. The contractor is only as reliable as the liability insurance they carry. If they cut corners on their insurance (and the company they're insured by), it's likely they will cut corners on their work product, too.

Also, be sure to demand to be added as "Additional Insured" on the contractor's liability policy. Make this part of the contract for the work, with the "Additional Insured" endorsement showing your name and job required to be in-hand before the start of the work.

Our company also requires every subcontractor we hire to add our clients as additional insureds on the subs' insurance policies, with a copy of the AI cert being mailed to the clients from the insurers. This is important, because if a subcontractors (say, a plumber) makes a serious mistake causing property damage, then as the client who is "Additional Insured" on the sub's liability policy, you can make a claim DIRECTLY to the subs insurance company, and the insurer has to treat you as one of their own. Cuts through a lot of legal and procedural red-tape. (Although in our company, should anything like this happen, since we are also AI on the policy, we do all this for you. Of course.)

If a contractor or subcontractor balks at this request to be AI on their policy, that should be a red-flag for you. Also be aware that insurance companies will try to issue incomplete AI certificates. Make sure that every one you receive has an actual ENDORSEMENT PAGE attached to it, listing you as additional insured. Without that endorsement page, the AI cert is useless. (It says so right on the certificate itself.)

Also, make sure that any contract you sign with a contractor states that in the event of any property damage or bodily injury directly caused by their work for you, that they will "defend and indemnify you" in the event any litigation arises due to this damage (like, if your neighbors are affected and decide to sue). Make sure the contractor has Workers Comp insurance; but also the "additional insured" status on their liability policy will make it difficult for any individual worker to sue YOU, as the homeowner, for any injury they may sustain on your job. (Yes, you can be sued over and above an WC claim for injury by any individual worker.)

These are "secrets" of competent contracting that I'm reluctant to share here. Most of our clients are not aware of all these protections we build into our contracting with them and for them. They find out if there is a problem. In the few instances we've needed to trigger any of these protections, the situations were resolved smooth as glass, because we were so conscientious to cover all these bases for our clients.

Finally, try to make sure the contractor is not hiring illegal labor on your job. That's hard to do, but make sure some kind of clause wording is in the contract to hold the contractor to legal-labor hiring. Those of us who strictly enforce legal-hiring policies are now in competition with the contractors who hire cheap, exploitable illegal-immigrant labor. They can bid lower than we do, but your job is definitely not safer if you hire them. (Again, remember that individual workers, legally hired or not, can sue YOU as the homeowner, for any injury they sustain while working on your project.)
1 vote Thank Flag Link Fri Jun 1, 2012
Liability insurance is a must. It's something that you should check automatically when you're looking at contractors. You don't want to be responsible for any accidents. They should have their own insurance for any situation. https://constructionvault.com
Flag Tue Feb 24, 2015
This is a great and long overdue thread. It's not often that we cover contractor related issues. Every professional who has contributed has brought substance to the table. To say one person is right over another is not at issue. Or that someone is just bloating for sell promotion.

I'm a San Diego based General & Manufactured Home Contractor and a RE broker & developer. Our family has a combined 100+ very and well established RE, Construction and Interior Design business/s. We don't need to self aggrandize to generate business. Almost all of our business is repeat or referral and we tend to turn down more clients than we take on so I'm not trying to hustle business.

My point is that no matter what we say a properly licensed, bonded and insured contractor with years of proven success and a phonebook full of 10 star references can still have a bad hair day. That Dr. Jeckel and Mr. Hyde client, a flakey sub, a slow and lethargic or difficult and over scrutinizing inspector, a bad pour, etc and it's game over.

It's a crap shoot at best. You start out with the best possible plan, pull all the permits. line up all your subs, work out all your details with the client and pull the trigger whence all of a sudden something goes sideways and there goes the fireworks.

Getting back to the question at hand: What to know when hiring a contractor? What are things to be aware of before hiring a contractor? Which documentation or certifications are important to review?

License: current, active and in good standing
Current bond:
Possibly a performance bond
Workman's Comp
some form of General Liability Insurance
Client should seek at least 3 bids
Client should actually visit former project sites and speak with clients
Contractor and client should spend as much time as is necessary discussing details, changes and scope of work before entering into contract.
Once project commences client should not interfere with contractor unless a blatant problem occurs.
Change orders should be thoroughly discussed and it should be clearly understood that all related costs will be borne by the client and the contractor should not be required to absorb losses therein.
Contractor should realize that they will be held accountable for any mistakes deemed their responsibility.

All that said. No matter how tightly you wrap the deal there can and most likely will be some obstacles that bot parties will have to deal with and negotiate on. Bottom line Contracting is not a perfect science and both client and contractor must enter the ring knowing, understanding and being prepared for numerous uncontrolled variables. It's how they're handled by both parties that will make or break any contract.

That's my 3 cents worth (adjusted for inflation).
3 votes Thank Flag Link Fri Jun 1, 2012
I agree with John Arendsen. I may not have a business degree, but the co-owner of my company was a litigation assistant for 25 years, working in construction defect. We both understand our contract just as well as the attorney who represents us.

As far as subs, I always work with the same guys - the ones I know and trust. I leave little to chance. And I pay them as soon as their work is complete. When contracting directly with the homeowner, this eliminates the need for liens. There are no unpaid subs at completion and no surprises down the road for the homeowner.

The bottom line is: Know your subs, take care of them and they won't let you down.
2 votes Thank Flag Link Sat Jun 2, 2012
There are good points here. It doesn't have to be intimidating to find a contractor if you know what you're looking for. Make sure you know what your contract says, and then you should be able to refer back to that when you have questions. And, of course, find people you trust. http://cochisetech.net
Flag Yesterday at 12:28pm
Dear Sharon,

In addition to the other good information you have received, let us add one element that we have found to be critical to successful projects—communication! If the contractor communicates well with you, the homeowner, as well as the architect, and their subcontractors, things will go more smoothly. There will be fewer change orders and less finger-pointing. With over 30 years of architectural experience, we have worked with many different types of contractors. Some avoid consulting with the architect or the homeowner, no matter what. These lone wolves tend to barrel along, deciding things “on the fly” and then blaming others when the result is not acceptable. On the other hand, we love contractors who just call us up when they have a question. They may just want a clarification on the drawings, or authorization on a change that will result in a time or cost savings. A simple phone call avoids hassles later. Sometimes an unforeseen problem arises, and a wise general contractor will get together with the architect and the homeowner to collaborate on a good solution. Tackling parts of the job that have incomplete details or specifications without consulting others can cause extra cost, ugly outcomes, and arguments over change-orders. For referrals to contractors who communicate effectively, call architects in your area who do a lot of residential work. They know the best contractors. The bottom line is that you want a contractor who approaches the job as a member of the team—owner, architect, contractor—all should be working together for an excellent project outcome.

One other thing to be aware of is that if you don’t hire an architect the construction drawings are likely to be very basic, just enough to get a building permit, and don’t include much design detail. This can create ambiguity about quality of materials and quality of construction. Different contractors might give very different bids; because one is bidding bare bones with cheap materials, and another is including more allowance for finish work and quality materials. It is often difficult for an untrained homeowner to tell the difference. Architects can help the homeowner understand the choices they are making in the bidding process. Drawings from a licensed architect can save the homeowner a lot of money in construction costs and avoid unpleasant surprises, not to mention result in a better-looking project! Good luck with your project.

Lorianna Kastrop, Vice President
The Kastrop Group, Inc. Architects
2 votes Thank Flag Link Fri Jun 1, 2012
As a follow-up to Chris' comment: Our firm works with highly-qualified and trusted contractors to give us a preliminary bid after the initial design has been completed (before construction documents are prepared), so that we know we are on budget with our design parameters. Chris is correct that many architects are wrong about construction cost!
Flag Wed Jun 20, 2012
This is valid. Except for the fact that most design architects"not all" are not responsible for construction cost. It is common for architects to be wrong about construction cost. What Lorianna Kastrop says is very accurate if your not doing design buid the second best way is to have your contractor and architect working together from concept. This will allow homeowners to get real answers and real cost estimations on future construction.
Flag Fri Jun 1, 2012
I would like to educate this thread. Everyone knows the contractor must have a valid license. Remember anyone can become a general contractor in about six months so this is not like getting a degree at Stanford or even like getting a real estate LIC. I have completed over 1500 projects in my life and I have seen many contractors with valid standing LIC and no complaints @ the CSLB either go belly up or not finish projects. What you really need to do is see how many successful projects that contractor has under his belt.. Check three completed projects in your area. You should know as well that most contractors do not have a business degree and do not understand there own contract. No this. If the job goes sideways for any reason the contract will not help either side very much. Watch out for contracts that appear litigious in nature. Make sure there is an arbitration clause so that lawyers do not create problems and bills that do not exist.

Here are three contract types that a good contractor should use.

1.COST PLUS
2.ALLOWANCE BID
3.DESIGN BUILD

Never do a fixed bid contract. These contracts never create success.

The most important thing in all three of these contracts is that you are not billed for work that has not been done.

The second most important thing is that the billing schedule is based exactly by the percentage of work completed. This allows you to have retention to finish your project no matter what happens.

The third most important thing is that you as a home owner have realistic understanding of real construction cost in your area. Many train wrecks are caused by this scenario. Watch out for the contractor who bids to low. We all want to here the lowest price. The problem is two sided when a homeowner hire the cheapest guy. If you understand cost you will know when someone is to low or to high.


Retention is the name of the game. Its that simple!

You need to find someone that you and your family feel comfortable with.

On the topic of general liability insurance.
This continually gets put out as a must have. I'm her to tell you that this is simply not true. It is not a requirement and not always the best way to go.
Most of the time it is better to insure projects job by job. General liability insurance is one of the most cumbersome litigious things that the state of California has.

For example the home owner can buy a writer policy with the homeowners insurance that is cost effective and will pay out much easier than general liability insurance. This also puts you in control of finishing your project on your own in a worst case scenario.

The problem is really that the state of California CSLB is fairly incompetent. They license people do do millions of dollars of work without business or contract law experience.
The bottom line

1.Find a contractor who does the design plans and construction so that you dont have five people you deal with to start your project.
2.Make sure you get educated on cost.
3.Make sure you get educated on the contracts above. Find one that fits your expectations.
4. Find a contractor with word of mouth references. You can talk to the previous clients.
5. Make sure you mesh with your contractor. Find someone you trust!
6. Make sure they are not doing more than five projects at one time. So your not just a number.

Build away enjoy your dream home! Thanks Jude
2 votes Thank Flag Link Fri Jun 1, 2012
Regarding the contractors CGL (comprehensive general liability) insurance policy issue:

As a very successful contracting company (we are the remodelers for the complete San Francisco 2012 Dream Raffle House, for example) in business for over 15 years in the Bay Area, I can well attest to how important it is to hire a contractor with good, reliable CGL insurance to cover a homeowner's project. The best-rated insurance companies will only insure contractors who have excellent risk ratings, which our company maintains.

Any contractor who tries to tell a homeowner that CGL insurance is not necessary is, in our opinion, trying to cover up for the fact that they either can't get good insurance, don't have it, or know their insurance is bogus. Sure, any extra insurance a homeowner obtains to cover a project is a plus. But the contractor's insurance is PRIMARY. Always.
Flag Fri Jun 1, 2012
There is a long list of things, but these are most important:
Must be licensed, bonded and insured. Look them up on the Contractors State License Board website to confirm license and if they currently maintain workman's comp insurance. This is required by law.
Should have adequate General Liability insurance (over 1M)
Experienced in that specific work, with a track record (typically, 10 years as GC)
Local references.
Contract must meet CSLB legal requirements, so it is very specific. Detailed list of the work to be done, price, change order procedures, etc. The State of Ca. is very specific. Most GC do not have a contract that meets the legal requirements.
Know the price in advance. Typically, it is illegal in CA. to use a time and materials contract.
Get a schedule prior to start of construction.
Job must be supervised and all subcontractors licensed.
Avoid anyone who does not want to obtain permits.
Ask the GC how they are going to plan and execute the project.
There are other considerations, but this is a good start
2 votes Thank Flag Link Thu May 17, 2012
It is required by law to have workers comp if a GC has any employees. In addition, should that GC hire uninsured subcontractors, that can also expose the owner to liability since the subs need it for their employees. Additionally, a GC "should" (as stated) carry liability insurance for very obvious reasons.
Flag Fri May 18, 2012
Some of the remarks of Derald are not accurate.
Yes, must be licensed and bonded (Contractor's Bond)
However, liability is optional
Workmans Comp only if employees (sole proprietor not)

Besides experience, your best assurance is references (word of mouth) of clientele.
A CA compliant agreement is required.
Angiers list or Yelp are helpful too (Although Yelp's review hiding is an unfair practice hurting good people)
Flag Thu May 17, 2012
This is really good advice. Are you a GC? As a real estate agent, I am always looking for good resources for my clients. Feel free to contact me for coffee and conversation. I can always use another good contractor. (And I doubt you'd give this advice if you didn't meet the criteria!)
Flag Thu May 17, 2012
This is one of the most indepth and insightful comment threads I have seen on any online real estate advice columns. Kudos and thanks to all who have invested so much time and knowledge to anyone considering hiring a contractor. I am the 203K consultant for my company and I fully intend to share this thread with all of my clients.

I especially thank @John for his comment regarding how the best contractor can run into issues with any project. I think, in that sense, construction is a lot like mortgage financing. It is important that there are many, many people involved in the process...and every one of them have the opportunity to have a "bad hair day"....it takes a good captain to navigate the boat through storm safely to the dock. It is not a matter of "if" there will hiccups in the process, so much as "how" the issues are dealt with.

Again, thank you all for sharing your knowledge and expertise!
1 vote Thank Flag Link Thu Jun 21, 2012
Robert, you're definitely not preaching. What you offer up is what practicing contractors need to know. I really appreciate your articulation and attention to this 7 word question. It could be one of the most important questions this year so far. I just hope a lot of folks, especially homeowners and RE professionals are tuning in. Thanks!
1 vote Thank Flag Link Mon Jun 11, 2012
Responding to another note below:

California law allows payment only for work completed and materials delivered. The "progress payment" at the end of the first day's work (mentioned below by another commenter) can legally only be for the work done by the end of the first day. The situation where the contractor gets the $1000 down payment then asks for $20K on the first day, to buy supplies and fund operations, is not legal, and homeowners should view it as a red flag that the contractor doesn't have the capital to fund the job.
As for getting advance payment for such expensive items as cabinetry and other allowances, the HIC requirements don't let you charge the homeowner ahead of delivery just because something is expensive. Being able to finance your projects is one of the license requirements. It makes it difficult to step up to a bigger job size, so it's not surprising that contractors ask owners to buy some materials.

For someone hiring a contractor, looking at the payment schedule in the contract is important. Whether you're in California or not, the payment schedule should be precise enough that an outside contractor could come in, look at the contract, at the payment history, and at the project, and could tell what's been paid for and what hasn't been paid for. An invoice item called "Progress on interior work" just won't cut it. An awful lot of fights between homeowners and contractors are about what's been paid for and what hasn't.

Contractors who want to invoice weekly should specify the payment schedule at a detail level that allows them to complete pay schedule items on a weekly basis. For example, if you want to invoice something like "partial sheetrock completion", but realize you can't because it's too vague, you really need to do your homework and break down the job into smaller bits, up front with the payment schedule, so that you can bill for "Hang 1st-floor ceiling sheetrock", etc. A detailed quote is good for everyone. It helps enforce good accounting practices, helps explain why your quote is real and hte lowball quotes aren't.

Really, I'm sorry to preach, but I've recently spent some time cleaning up other contractors' messes, including invoices that just say, "Progress payment".
1 vote Thank Flag Link Mon Jun 11, 2012
The information we gave is truly to help a homeowner. The problem with this thread is your going to have contractors and architects pleading there case for sales purposes.
saying that you must have CGL (comprehensive general liability) insurance is defiantly not true. There are at least four ways you can have a blanket insurance policy for any construction project. right now on the peninsula I know of Three major design build contractors with repeat residential business of over 20 million a year that offer writers policies as an option to CGL (comprehensive general liability) insurance. The benefits are huge.
1.cost savings
2.better overall policy
3.faster payout on claim
5.less law suites brought on by multiple sub CGL (comprehensive general liability) insurance companies
6. last but not least control of the policy gores to the home owner!

Please understand that you do need insurance!
There are better options than CGL (comprehensive general liability) insurance



Remember never get job cost from an architect because they are not building the project!!!!
1 vote Thank Flag Link Fri Jun 1, 2012
Regarding the contractors CGL (comprehensive general liability) insurance policy issue:

As a very successful contracting company (we are the remodelers for the complete San Francisco 2012 Dream Raffle House, for example) in business for over 15 years in the Bay Area, I can well attest to how important it is to hire a contractor with good, reliable CGL insurance to cover a homeowner's project.

The best-rated insurance companies will only insure contractors who have excellent risk ratings, which our company maintains. A good risk-rating means few or no claims for an extended period of coverage with the policy. Our insurance is AAA rated, so homeowners feel reassured when we give them our proof-of-insurance.

Any contractor who tries to tell a homeowner that CGL insurance is not necessary is, in our opinion, trying to cover up for the fact that they either can't get good insurance, don't have it, or know their insurance is bogus. Sure, any extra insurance a homeowner obtains to cover a project is a plus. But the contractor's insurance is PRIMARY. Always. And the subcontractor's insurance is primary, even to the general's CGL policy, if the subcontract is written correctly to require it.

Good contractors maintain good CGL insurance. Ask any of 'em.
1 vote Thank Flag Link Fri Jun 1, 2012
Hello Sharon

First off, when looking for a contractor MAKE SURE THEY ARE LICENSED and their license is current. You can also go on the CSLB website and check in to see if their have been any present or past fines/complaints against their license ( usually this is due to doing work without a permit, but not usually).

Since I almost work exclusively through repeat clients and referals from clients, id suggest home owners looking for a contractor do the same. Im just as picky as a contractor when it comes to clients- as not all clients are a good fit for me. If a client has a budget, they should be upfront and "realistic' about it, and dont go with the "cheapest" contractor. Im not cheap, but the little extra you pay you get tenfold in personal attention, assistance, trust, and overall professional service and completion of a job.

Id check to see if they have a website and look at their work- particular before and after work. Ask for refererals from former clients ( I also use Angies List as its a good way for clients to write reviews of their experience with working with me). Also, check and see how long they have been in business, as you dont want to hire a fly by night contractor. I personally only work with sub contractors that have been in business for a while- I know they will stand by their work down the road and always return to deal with a problem should it come up ( this goes for supply houses- online is the worst as you may not be able to recoup losses for damaged products ordered and installed or many dont meet present local building codes- always remember CHEAP doesnt mean GOOD).

As far as documentation. Contractors must have a valid and in good standing California Contractors license. As far as bids/contracts go. A contractor MUST ( as stated by Califormia State Contract Law) provide the following information to clients in CHECKLIST FOR HOMEOWNERS- Home Improvement:

A Three Day Notice of Cancellation
Provide Proof of General Liability Insurance
a Notice to Owner ( warning and information about liens)

A contractor may NEVER ask for more than $1000 or 10% of contract price ( whichever is less) as a deposit for the contract. ( that being said, certain items like windows, doors, appliances, and kitchen cabinets often require partial or full payment prior to ordering- you should check to make sure first as its not the contractors responsibility to front this cost)

Any changes to the contract must be presented with a Change Order ( although there are acceptions such as Cost Plus Labor Agreements- which I use with my regular clients to speed along work and issues that come up- but again this is a trust issue that I only suggest with contractors that come highly reccomended or you have a good working relationship with).

Any of this information can be gained from the following site : CSLB at 1-800-321-CSLB (2752) or visit our web site: http://www.cslb.ca.gov.

Id personally also make sure that they have a clause in the contract which stipulates Warranties of work and products.

ASK QUESTIONS, and on a personal note, dont assume all contractors are crooks. I dont like when a client comes to me with a bad experience and already has a chip on their shoulder and is suspicous from the get go. Its not a good way to start a good relationship with your contractor. Go with your gut instinct but remember CHEAP does not equal GOOD(Far too many clients make this mistake by going with someone else that tells them what they want to hear when it comes to cost then later complain about it- well you get what you pay for, so be realistic about your budget and your project).

I hope this helps, if you have any further questions please contact me. Tom@ttbrenovation.com
1 vote Thank Flag Link Thu May 31, 2012
In addition to the proper licenses and insurance, it's vital to obtain a comprehensive contract which is compliance with statutory requirements. It should be longer than one page, and it's required to contain an Alternative Dispute Resolution section, sometimes called an arbitration clause (with separate, additional signature block), and provisions for attorneys' fees. You should receive with your contract a Notice of Right to Cancel which gives you the right to cancel your contract for three days.

Additionally, the most a contractor can legally require you to pay at signing is $1,000.00 or 10% of the project cost - whichever is lower. It is not improper to obtain a progress payment as early as the end of the first day or work, but not until work has commened. If a contractor requests a large amount at signing, he is either unaware of his legal constraints, or he is violating them, and you should not hire him.

These things are as important as a license and insurance. If a contractor produces sloppy, inadequate paperwork, he may be equally willing to violate the California Building Code. You want a contractor who sees the wisdom of those rules, and respects them. That contractor is more likely to show you respect.
1 vote Thank Flag Link Thu May 31, 2012
Hi Sharon,

GREAT question, I'll try to be comprehensive as this is a very important decision.
Construction and business experience as well as experience with your particular type of remodeling is imperative. Lots of good builders are poor business managers and vice versa. You must be both to get it done properly the first time. Ask to see the scheduling format they use, actual estimates and schedules from similar jobs in the last two years and what kind of quality control program they have.Talk to the clients whose job documentation they show you and ask hard questions.Most everyone has the necesary licenses, bonds and insurance, but ask for current copies of those as well, and check the expiration dates. You need to discover how a firm handles problems, delays, and how well they listen to their clients. Have your plans prepared and have the candidates prepare a preliminary estimate for a reality check and to see how well they perform. If the estimate is a week late, will that problem resurface in the building schedule? Most likely.If someone is not as communcative as you'd like, will they modify their style to yours?
Its about you, you are the customer, but you also need to rely on your Builder for sound advice and to protect your bottom line , so do whatever you can do to confirm integrity, it is what all things depend on to be successful.
SEA
1 vote Thank Flag Link Thu May 31, 2012
Contracting is weird science at best. Having been a general contractor and developer for the past 3 decades I can tell you first hand that it's all just a crap shoot. You can have all the licensing, bonding and insurance money can buy but sometimes you just get jobs that don't go the way they're supposed to.

For me personally? I go with chemistry. If I have good vibes with my client and get warm fuzzes from them I'll tend to pull the trigger and take them on as a client. But on the other hand if I feel like the client wants to control me and not let me do what they hired me to do or are going to be hitting me up with a lot of last minute changes or knit-picking me all the way I'll just say........................NEXT!!

It goes both ways. It's all about give and take. You hire a contractor because you've totally checked him out six ways from Sunday i.e. license, bond, liability insurance, references, etc. You've even looked through his scrap book and actually put yourself into your car and driven to some of his/her projects and you're totally impressed.

So now you think you've got your contractor and hire him. He shows up, starts to perform and the cement truck rolls up with a dry load and it won't even pour out the shoot. Or the inspector doesn't show up and reschedules a week out leaving your contractor in the cold. Where does that leave you the client? Where does that leave your oh so perfect contractor? On your S__T List!! And it's not even his fault. You just need someone to get mad at.

Now that we're off to a totally bad start and you're beginning to doubt your decision and the contractor is regretting ever signing you up you're committed. You're once great vibes and cool chemistry is now starting to turn into impatience and perhaps even disdain. See where I'm going?

No matter how hard you research, scrutinize or otherwise do your due diligence you just never know. I'm at the point in my career as a builder, developer where I no longer take on clients. I simply build what I want to build and wait for the right person/s to come along that just love what I've built and buy it.

Contractors, like everyone and everything, run hot and cold. They can have great jobs and they can have the jobs from H__l! The best thing you as a client can do is have your plan very well planned and don't do a lot of last minute changes and by all means don't try to micro manage your contractor.

I think it's a two way street from the beginning to the end. I have clients that I've worked for sine I've been in business. They love me and I really love them. We've always treated one another with respect and I've always turned out an exceptional performance for them.

Anyway that's my rant for this thread. But the question obviously created a stir in my crawl.
1 vote Thank Flag Link Mon May 28, 2012
Love your answer and can certainly tell you are a contractor. Living in the real world. As you say, in so many words, it comes down to trust. My name is Greg. gregkarr@ix.netcom.com. I'd like to meet you some day.
Flag Mon May 28, 2012
Sharon,

The answers below guide you in the right direction. I would add that in San Francisco, it is important that the contractor is up to speed with the permit process. That's a question to ask him or her. In addition, interview 2-3 contractors and get bids from them so you understand how they work and what to expect - as well as cost, estimates, of course. Ask questions based on these as well.

Feel free to call me ast 415-200-7202.
1 vote Thank Flag Link Thu May 17, 2012
All these answers have been great. I would also look into the insurance the contractor uses. This can say a lot about their work. I company that invests in good insurance will most likely put in better work. http://ferranteinsurance.com/contractor-liability-insurance/
0 votes Thank Flag Link Wed Nov 19, 2014
When hiring a contractor, the homeowner needs to ensure that:
1. The contractor is licensed
2. The contractor is insured and bonded
3. Make sure to get references from homeowners that the contractor has worked with. This is key, as it will tell you how the contractor works on a project. In the running of my business, it so vital to have open communication with the homeowner, listen to what the homeowner needs and wants and to stay within their budget.
0 votes Thank Flag Link Wed Jun 20, 2012
Robert, I really did want to read this link, http://www.cslb.ca.gov/Newsletter/2010-Summer/page9.htm. But when I clicked it it defaulted to http://www.cslb.ca.gov/default.asp. I'd be very interested in reading it as my insurance projects are always contracted with the policy holder vis a vie homeowner and is very seldom directly with the insurance provider.

That stated, if the home has a mortgage on it, which most do, then I submit the invoices for progress payments to the lender for payment. Either way I'm dealing directly or indirectly with the homeowner because they have to approve everything.

So, I don't really feel it's at all off topic as I feel it's very important for me to know about that of which you speak. I'm just trying to determine if given that it's customary to leave a contract open ended whence working indirectly through insurance companies if the same rule applies?
0 votes Thank Flag Link Sun Jun 10, 2012
John: I only meant off-topic compared to the original poster's question. I don't know what happened to the link, but if you type it as it appears (minus the period at the end) it works. The article covers the reasons against T&M for Home Improvement Contracts. As for the distinction between homeowners and insurance companies, I get that from the Business and Professions Code, sections 7151.2 and 7159, which define a HIC (which is the thing for which T&M is not legal) as an agreement between a contractor and an owner or tenant. For my business (and not being a lawyer I'd never give legal advice to anyone else), I interpret that as meaning that my agreements with people or things that aren't owners or tenants, for example insurance companies can be more flexible. As a common sense point, the HIC is a consumer protection measure, that insurance companies don't need.
Not being a lawyer doesn't keep me from stating my opinion about the basic T&M issue, though. I think it's very clear
Flag Mon Jun 11, 2012
John Arendsen: evidently I didn't make myself clear when I made the comment about "secrets of competent contracting", or else you just disregarded my next statement, which was that "most homeowners don't know that they have all these protections with us unless there is a problem."

The "secrets" I was referring to was not about what CONTRACTORS may or may not know.

It was meant to inform homeowners of these "competent contracting" CGL issues. Most homeowners don't know about this level of project coverage available to them. If they don't ask, I don't usually tell them, as I have clearly done in this Q&A thread. But we provide valid A/I certificates readily to any client who requests it.

However, we always make our clients additional-insured on all subcontractors' CGL policies for each project. This has proven sufficient coverage time and again for us, which always makes the subs' CGL policies PRIMARY, before our coverage, or a homeowners-insurance coverage. Our clients are always protected from risk for complications and litigation in the event of an unfortunate mishap during a project, even if they aren't A/I on our liability policy, and whether they know they have such additional primary coverage for their project or not.

A properly worded contract, subcontract, and a valid A/I certificate listing us, the contractor, and the clients, as additionally insured has so far guaranteed us and our clients of hassle-free problem resolution. Comprehensive risk-management practices (to prevent property damage or bodily injury) are also an important element to successful outcomes on projects.

Plus, having A+ insurer coverage, which we have, has also proven, consistently, that any liability issue that may arise during a project is handled with swift "make-whole" response by said insurer. (Fly-by-night insurance invariably puts up unwarranted blocks to respond to claims or becomes generally unresponsive to any liability issues incurred by their insureds. Cheap to purchase such insurance, but penny-wise-and-pound-foolish eventually.)

But at no time, with that comment, was I referring to "secrets" of contracting that other CONTRACTOR'S might not know. (Of course I'm assuming that the contractors represented here are all professionals.) I wouldn't presume to "educate" any other contractors about any of our industry. This Q&A is for HOMEOWNERS and potential remodeling clients, as I understand it.

I was being honest that I generally don't have these kinds of discussions of CGL issues with our clients. However, now I've put it all out there to educate homeowners, I can expect to hear from more potential remodeling clients who will inquire about being A/I on our CGL policy. Likely other contractors will, too.
0 votes Thank Flag Link Sun Jun 10, 2012
@John Arendsen: We're getting off-topic from the original question, but this is a good thread. I agree with you about "secrets": there aren't any. The best contractors (and this applies to most businesses, not just contracting) could go on TV and tell all their "secrets", and it wouldn't help the worst contractors one bit, or hurt the good ones. There are best practices, which the best contractors follow and the worst contractors are incapable of following. Success is all about execution. Homeowners should be careful about contractors who depend on some secret sauce, if the secret sauce consists of anything more than dedication to quality, meticulous attention to all technical and business details, and hard work.

As for insurance work: As I understand it (and I'm a contractor not an attorney), the restrictions specifically apply to Home Improvement Contracts, which are between the contractor and a homeowner or tenant. Repairs for amounts greater than $750 are subject to all the same restrictions. These rules don't apply (as I understand it) if your contract is with the insurance company, which is a great reason to deal directly with the insurance company. Keep in mind that the CSLB is part of the Dept. of Consumer Affairs, who is more interested in protecting consumers than insurance companies. Homeowners of course often want to get the settlement check and find a better deal.
I'm sure that if you want the straight dope on all this, you should talk to your attorney. But with homeowners, I will only do fixed price contracts, maybe including the entire possible scope of the work and providing a mechanism to remove items from the job by change order. The other path - restricting the scope then negotiating additional items as they appear - is too risky for me, as I don't know how to make that work without looking like I lowballed the original quote.
Anyway, thanks for your thoughts.
0 votes Thank Flag Link Sun Jun 10, 2012
Bay-Marin, "These are "secrets" of competent contracting that I'm reluctant to share here. Most of our clients are not aware of all these protections we build into our contracting with them and for them."

I hardly think you've reinvented the wheel here. Most good contractors implement these same clauses in their contracts. I'd be surprised if any contractor on this thread would be surprised at any of this info. I've been incorporating it into our contract for decades. In fact we do a tremendous amount of work for large corporations and government entries that require AI's for just about everything. But it's still good information for you to share to unwary homeowners and or prospective clients.

Robert Cram, I totally agree with your contribution regarding T&M with one exception. INSURANCE claims. Here you have no choice but to bid T&M. Especially when dealing with fires, floods, drainage, and mold related issues.

Unfortunately you don't have any idea how much damage there is until you start the destructive inspection portion of the project. Then you can only go by what damage you discover during the cousre of repair.

When we bid out insurance repair estimates ,which happen to be a huge percentage of our work, we always inform the insurance company/client that our prices are subject to discovery and that if we find additional damages we have the right to seek additional compensation accordingly. We're not dealing with the insurance companies in most cases.

We are dealing directly with the homeowner and the homeowner signs the contract. But I will read your link to see how or if insurance claims are dealt with, In any event that's great information for homeowners to know.
0 votes Thank Flag Link Sun Jun 10, 2012
Regarding the message below from "Chris Barnes", signed by "Jude". A friend of mine was a victim of J Barnes Construction a few years back. That Jude Barnes, license 828182, has a license revocation and a list of 11 complaints, all with a status of "Criminal Conviction", including one for "Violated all of the home improvement contract subsections." That Jude Barnes did some serious harm; he should be avoided and should not be regarded as a source of good advice.

"Chris", e-mail me at bernalmember@yahoo.com if you want to talk with me about this. If you are able to convince me that the Jude that signed your e-mail isn't that Jude Barnes, then I'll gladly apologize and ask Trulia to remove this comment.
0 votes Thank Flag Link Sun Jun 10, 2012
Folks keep insisting that T&M is legal in California, if you only call it cost-plus, or have a max price, or call it "flexibly priced design-build", or whatever. There's no question that T&M is great for contractors, and I don't blame my fellow contractors for wanting to keep it alive.

But every professional should read this CSLB article: "Time and Material Contracts Not Legal for Home Improvement", at http://www.cslb.ca.gov/Newsletter/2010-Summer/page9.htm. It explains all the reasons that a max price, and all the other cute work-arounds and tricks are not sufficient to make T&M legal. In particular, the requirements for the schedule of payments completely nail the coffin shut, for T&M and cost-plus, for home improvement work. Read the article, carefully. It's very clear.

A group of business owners who are so aware of liability and insurance issues should be much more careful about this question, as writing an unenforceable contract isn't a great start to managing liability. And it seems to me that the brokers, agents, architects, designers, and other allied professionals, who have a very privileged position with homeowners, should be particularly wary of sending their clients down this path.

Sorry to rant. I get calls asking me to help clean up the mess from T&M and cost-plus jobs, and while I appreciate the business opportunities, I'd rather do without the black eye to our profession.
0 votes Thank Flag Link Sun Jun 10, 2012
Chris, I must take issue with this: "You should know as well that most contractors do not have a business degree and do not understand theirk own contract."

I think you may be painting this industry with a pretty broad brush if you think "MOST CONTRACTORS" don't understand their own contract? We may not all have '"BUSINESS DEGREES" but that doesn't mean we don't understand our own contract.

I think there are thousands of contractors out there that might take offense to that statement. I actually have written almost all of my own contracts utilizing all the required disclosures according to the CSLB because I wanted to offer up something my clients could clearly understand and with no fine print or complicated legalese
0 votes Thank Flag Link Fri Jun 1, 2012
Chris, thanks for the education. But have you taken the time to read all the comments. I think you'll find that there are many very well educated folks who would think you might be preaching to the choir. Some of your points are well put and some are just plain ole common sense. But thanks for taking the time to offer up some good ole common sense.
0 votes Thank Flag Link Fri Jun 1, 2012
I only recommend contractors I have personally worked with, or have experience with. I would only work with licensed and bonded contractor, that way you can go back to the ROC with concerns. Try and get a min of 3 bids whenever you are hiring a job, ask for past references, and of course, get the bid in writing.

Best of luck.

Spirit
0 votes Thank Flag Link Thu May 17, 2012
Dear Sharon,

Having been screwed by a former friend who was a contractor, I have more than a few words of advice.

First of all, talk to people you know and ask them for a recommendation. I'd be happy to provide the names of 2-3 contractors whom either I or my clients have used.

Secondly, ask them for references from current or recent jobs. IF you can, go by to see the work in progress or something recently completed.

I recommended an architect to a client and they had 3 different contractors bid on the job. The one whom I recommended didn't market himself as well as he could. I have since met the guy they did choose and talked to him about other projects he had done in the area (Noe Valley).

Some contractors specialize in certain neighborhoods or architecture styles. I would also highly recommend that you meet with an architect first as they will make sure that your vision is clear and they will collaborate with you on what you are trying to accomplish.

As a Realtor, it dumbfounds me when I go into houses that people have added a room here, a closet there, with no rhyme or reason or professional help.

My friend, Stephanie Wong, with Geddes Ulinskas Architects is amazing--plus their fees are very competitive. She is a master at maneuvering through the red tape at DBI.

Sorry, got off track. But in conclusion, hire an architect, do everything with permits--this will really add value to your home--and have the architect help you choose a contractor and talk to at least two or three.

Most importantly, GET EVERYTHING IN WRITING!!!

Be sure to let me know if you need any referrals or more info.

Sincerely,
Rebecca
415.412.1977
0 votes Thank Flag Link Thu May 17, 2012
I recommend you do things legally and make sure who you hire is licensed to do the work you want done.

A GENERAL contractor can do everything you may want, but a PLUMBING contractor is limited to perform plumbing. He is not licensed to do roofing work. T

heir are a lot of different licenses that define and limit the work the contractor can do legally. You can check up on a contractor by going to the state board of contractors web site and inputting their license number or name. The web site may even have violations or complaints listed.

Ask for references and call them. I like to drive by the houses he worked on, too. If you can talk to the home owner in person, do it.

GET A GOOD CONTRACT IN WRITING. Many contractor's will give you a bid sheet that has terms of payment and a brief definition of the scope of work to be performed an ask you sign it. I never do that and have a real contract that defines the scope of work in detail and contains other terms that make the contractor live up to what he says he will do. If the contract calls for Corning roof tiles #xxxx and he uses #yyyy tiles that cost less then he is cheating.

Another example, what if he does about 1/2 of the work and then decides to begin working on another job that will make him 5 times more money than your job? He'll go there and will get to your job when he has time. A good contract will tie him down to a time limit and if he exceeds that time period he has to pay you a certain amount per day for not completing the job on time.

There are a lot of terms to a contract with a contractor. You may search the web or hire an attorney. Check out the web to at least get some education about this type of contract. DON'T GO INTO A CONTRACT INNOCENT. DO SOME NOMINAL EDUCATION.

Of course if you want to do what many folks do you can hire someone who doesn't have a license and you MAY get a lower bid price, but you would be taking a risk. Ask yourself how much am I planning to spend?
0 votes Thank Flag Link Thu May 17, 2012
Oh yeh! The contractor should also be licensed and bonded.
Flag Thu May 17, 2012
Some people rely on Angie's list.
0 votes Thank Flag Link Thu May 17, 2012
Make sure the contractor is currently licensed. You can verify the licensing and current complaints status online here: https://www2.cslb.ca.gov/OnlineServices/CheckLicenseII/Check…

Go take a look at his current projects. That will give you an idea of the quality of work. Sometimes you can even ask the home owners about their satisfaction with the contractor.
Web Reference: http://www.archershomes.com
0 votes Thank Flag Link Thu May 17, 2012
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