Hiring a Contractor
Below are some steps to take when hiring a contractor so that you are not taken advantage of by scam artists that are all too common following a natural disaster:
- Call your homeowner insurance company and ask them to prepare a repair cost estimate. This will give you with a point of reference that you can use when negotiating with contractors.
- Ask your insurance company to provide you with a list of certified contractors.
- Only use licensed contractors. To verify their license, go to the Contractors State License Board website at www.cslb.ca.gov.
- Be wary of high pressure sales people who present unrealistically low estimates, and refuse to leave a contract overnight.
- Check references when hiring a contractor. Ask the contractor to provide you with the names and contact information for their suppliers, subcontractors and previous customers. You can learn a lot about the contractor’s professional reputation by talking with these folks.
- Confirm that the contractor carries general liability and workers compensation insurance. Ask them to provide proof of their insurance and contact the insurance company to verify that they are truly insured. Do not do business with a contractor who does not carry the appropriate insurance coverage. If the contractor is not insured, you may be liable for accidents that occur on your property.
- Get multiple bids for comparison and be sure to read the fine print on all estimates and contracts.
- Don’t agree to verbal contracts – get everything in writing. If the contractor provides guarantees, they should clearly state what is guaranteed, who is responsible for the guarantee, and the length of the guarantee. All change orders or modifications to the original contract should be in writing and acknowledged by all parties.
- Never sign a contract with blank spaces that have not been filled in. Dishonest contractors can later fill them in with unacceptable terms. To best protect yourself, you may want to have an attorney review the proposed contract.
- Set a payment schedule and don’t pay a contractor for the entire project in advance or before the work is completed. In most cases, California law states that the maximum down payment for any single improvement project is the lesser of the two: $1,000.00 or 10% of the contract price. Do not issue final payment until you are satisfied that all terms of the contract have been met by the contractor. It is also best to pay by check so you have proof of payment.
- If you choose to cancel a signed contract, do so within three business days of signing. You should also adhere to the terms stated in the cancellation clause of the contract. You should send notification by registered mail so you have proof of canceling the contract.