How to make sure you're hiring a trustworthy contractor

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Posted: Saturday, April 5, 2014 12:00 am

I'm still shivering, but spring (honestly) is here. And just as soon as we Midwesterners are able to get back outside, we like to get working on the projects we've put off, especially repairs and home improvements. We attend home and garden shows and expos to get ideas and contacts, but it's important to select the right people with whom to do business.

There's no shortage of home improvement needs and there are many, many companies offering similar types of services. Consumers are sometimes overwhelmed by the number of choices, and it can be challenging to find the best contractor for a specific job.

We are blessed to have an abundance of local home improvement firms that are committed to excellence and can be counted on to do the job right, but there are, sadly, also a number of businesses homeowners might regret hiring. Just as the warm weather brings birds back from the south, spring tends to bring seasonal scam contractors who are in the area to exploit unsuspecting homeowners.

One of our investigators recently shared with me complaint information from seven local consumers who lost more than $80,000 collectively after firms collected large down payments, then didn't complete the work. These initial payouts ranged from $6,000 to $16,000 and, in every case, were well over the maximum portion the BBB advises folks to pay upfront. Most contractors require a down payment before work begins, but it should not be a significant portion of the total cost and the BBB often suggests paying no more than a third of the total project cost prior to the work starting.

One complainant reported that he paid an out-of-town roofing firm $13,000 but has not received any roofing materials or services at all. After receiving repeated and earnest assurances that his materials were ordered and would be delivered, the Omaha man began to think his situation would be resolved … but the materials never arrived and now his calls to the company go unreturned.

In another example, a local couple came to us after paying more than $14,000 for a siding job estimated at $18,000. After months of issuing only excuses, the company finally advised the Omaha pair that their firm would “be back when the weather warms up.” The weather's warming now, but it's doubtful their home will get sided by the company that took the money, no matter how balmy the local temperature.

There are many resources you can use to identify excellent local contractors, and when it's time to select one you can do so confidently if you keep these suggestions in mind:

>> Take your time and be sure to compare costs. Get at least three bids from prospective contractors, and make sure all the bids are based on the same specifications and materials. Labor and time needed to complete the project can differ dramatically, but it's important for all contractors to offer bids using the same information.

>> Ask for local references. People often mistakenly assume it's enough that a firm provides them. Take time to contact the references.

>> Make payments that align with the progress of the work completed and make sure you are satisfied with the work before remitting the final payment. Once you've checked out the firm thoroughly and are confident you're dealing with trustworthy people, go ahead and pay a third of the project cost ahead of time, a third at the midway point and a third upon the satisfactory completion of the job.

>> Review your contract thoroughly. Make sure it includes a list of all the materials needed to complete the job and an itemized list of all costs involved. Any subcontracted labor should be noted, and the contract should include a warranty for all work performed. Any agreed-upon items not in the contract should be added and initialed by both parties. Make sure that the start date and the completion date are clearly defined, and never rely on verbal agreements.

>> Ask for lien waivers to prevent subcontractors from being able to place a lien on your property in the event your contractor doesn't pay them.

>> Ask the contractor for confirmations of license and insurance. Find out if the company is insured against claims covering workers' compensation, property damage and personal liability, in case of accidents. Verify coverage directly with the business's insurance company, if possible.

>> Just as is the case with many scams, the individuals who operate home improvement schemes can be very clever and can appear to be very professional, so it's extremely important to check out companies, and also the individuals who operate them, with the BBB. The BBB maintains free and easily accessible business reviews on nearly all of the companies in our area at www.bbb.org. If a contractor has met the BBB's accreditation standards, our site will even allow you to request a quote directly from the firm you are considering.

Jim Hegarty is president of the Better Business Bureau representing Nebraska and southwest Iowa. To contact him, email jhegarty@bbbnebraska.org or call 402-898-8520.

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