If you are planning to hire a home-improvement or remodeling contractor for any project this year – whether large or small – know what you are getting for the money you’ll invest. According to the Iowa Attorney General’s Consumer Protection Division, there are ways to protect yourself and your home.
Take steps before looking for a contractor
- Make a detailed list of the work you want done. Be as thorough as possible, so any contractors bidding on your job know full details about the project and needed materials.
- Check with your city or county on required inspections and building permits.
- If your renovation will be extensive, check out the 2012 International Energy Conservation Code that has been adopted by the state of Iowa. All contractors are required to follow the code, if your project applies. If you have questions, contact Dave Ruffcorn, construction/energy engineer with the state Building Code Bureau at firstname.lastname@example.org or (515) 725-6139.
Before you sign a contract or pay any money, ask around and also take time to talk with any contractors you are considering hiring:
- Ask people you know and trust who they have hired for their projects and whether they were satisfied.
- Request local references from the contractor and contact them!
- Check on complaints with the Attorney General’s Office (515-281-5926, or 888-777-4590) and check the Better Business Bureau’s complaint database at www.bbb.org.
- Be wary of a person or company not listed in the local telephone directory, and be wary of contractor who provides only a post office box address and not a street address.
- To see if a contractor has been sued or filed a lawsuit, go to: www.iowacourts.state.ia.us.
- To verify a contractor’s registration and bonding (which doesn’t guarantee quality of work or payment of damages if a dispute arises with the contractor), go to: www.iowaworkforce.org/labor.
- Ask the contractor for a copy of their liability insurance certificate. (Also make sure that any subcontractors have insurance, too.)
- Make sure the contractor is aware of the 2012 Energy Conservation Code, and that he/she builds to those specifications.
Get several written estimates or bids
Be sure the written estimates include everything you want done and not more than you want. While low bids are often what people look for, sometimes they can raise red flags. Is the low bidder really qualified for the job? Is the contractor cutting corners through materials or workmanship? Is there a risk the contractor will come back to you later with a story about “unforeseen circumstances” and demand more money?
When you’ve selected a contractor, get the contract in writing and read it before you sign it
- Before work begins, agree on a written contract detailing terms including the work to be done, the brand and/or the specifications of the materials to be used, the price, who is responsible for obtaining permits and scheduling inspections, that all change orders must be in writing, and establish who is responsible for cleanup.
- Put start and completion dates in writing and the remedies if the contractor fails to meet them. (Example: the contract could be nullified if the contractor doesn’t start on time.)
- If you’re filing an insurance claim to cover the costs of damages, negotiate the details with your insurance company directly and not through a contractor.
- If you sign a contract somewhere other than the contractor’s regular place of business, such as at your home, you have three business days to cancel the contract without penalty.
Avoid paying large sums or the entire job up-front
- If you need to make a partial advance payment for materials, make your check out to the supplier and the contractor.
- Insist on a “mechanic's lien waiver” in case the contractor fails to pay others for materials or labor.
- You can search to see who may have claimed the right to place a lien on your house through the Iowa Secretary of State website at: sos.iowa.gov/mnlr or by calling (515) 281-5204.
- Do not pay the contractor in full until you verify that all the parties listed on the website have been paid in full.
Compare your financing options
- It’s usually safer and a better deal to obtain financing through your local bank or credit union rather than a contractor.
- Do some loan shopping and compare loan terms, and don’t let anyone pressure you into signing a loan document.
- Don’t deed your property to anyone.
Watch for contracting scams
Don’t fall for the contractor who shows up in an unmarked vehicle and claims your driveway needs repaving or your house needs new shingles – and they “just happen to have materials left over” at a big discount! Just say no to a deal based on “extra materials,” someone demanding an immediate decision, a contractor who only accepts cash, or a contractor who insists on full payment in advance.
Source: Iowa Attorney General's Office