How to Avoid Bad Contractors

Of course, as an architect, I think it’s important that you choose a good architect. But your construction project – either residential or commercial – can be started with the best of intentions, yet destroyed by a bad, irresponsible or crooked contractor. Some of my clients have done many construction projects and are well equipped to select a competent and honest contractor, but many are building for the first time. You don’t want your building ruined or your construction budget to disappear. How do you protect yourself?


Step 1: Check their license. Having a license isn’t any guarantee they are an honest or competent contractor, but it is a start. Be sure to compare the contractor’s ID to the license. If you are in Rhode Island, check here:http://www.crb.ri.gov/search.php If you are in Massachusetts, check here first: http://www.mass.gov/eopss/consumer-prot-and-bus-lic/license-type/csl/information-on-selecting-a-contractor.html  Do not hire a contractor without a license. Be sure also to check their lead license – this is required for work on older buildings – even licensed contractors who do not have a lead license are not allowed to do much work on older buildings.

Step 2: Look them up online – do a google search.

Step 3: Check public records for any judgments against them.

Step 4: Do a background check. It’s worth the small amount of money you may spend.

Step 5: Check their insurance. Do they have General Liability and Workers Comp? Are other types of
insurance required in your area? A contractor should have no problem getting you a copy of their insurance certificate – be wary if they cannot or refuse to.

Step 6: Select a local and established business – Unlike most industries, contracting is especially infamous for fly-by-the-night businesses run by independent contractors who may not feel as liable for their work because they don’t have an established office and can work from project to project.  Even if they are dedicated to their work, smaller outfits that aren’t established may not be financially sustainable if projects go awry and can easily go out of business when they do, leaving the owners to foot the costs.  Simply having a local business address with a local phone number where you can come and drop off a check is important for accountability in case if you have to come knocking on the door to get answers. It also indicates they are established enough to have adequate administrative support and customer service, which is often not that common in the industry.

Step 7: Check their references. A good contractor will be able to provide you an extensive (IE: long) list of references. Be sure to call these references (as many as you want, but at least 3) and even visit the projects to meet with the owners. It wouldn’t hurt to even ask the contractor to put you in touch with someone where the project didn’t go so well – to get the other side of the story. I can’t emphasize this enough: check their references. Check them on Angie’s List and the BBB as well.

Step 8: Get a written contract. Do not start work without it, and don’t pay any money until it’s signed. Talk is cheap and a bad contractor will try to hustle you into paying a deposit (or more!) before work has begun or a contract is signed.
You want a legally binding contract, with everything related to the work spelled out. That includes start and end dates, and even model names of, say, the cabinets or faucets. And a payment schedule.
Homeowners should beware of dealing with anyone other than the actual contractor or registered salesperson named on the license, Young said, and the bid and contract terms should always be in writing. The documents should include the contractor’s name, contact, and licensing information.
Among other things, the contract should require written work orders for any changes. Talk to your architect about helping you review a contract before it’s signed. They’ll probably point you towards an AIA contract to help protect you. Have the contract reviewed by an attorney if you are not sure about the “legalease”; if your expectations are not stated clearly in writing, do not go forward.
Review all aspects of the contract before you sign. Don’t assume certain specifics are included, such as appliance installation. Check that your contract includes a lien waiver, covering payments to all subcontractors who worked on the project.
Confirm the “punch list” procedure. Basically, this is how the contractor will deal with the list of small items remaining to be completed at the end of the job. Usually, the solution will be that you withhold some of the payment until everything is complete.

Step 9:  Check on worker’s compensation. A contractor may have a worker’s comp policy for one or two workers, then show up at your house with a larger crew. Be sure to call their insurance company to see who’s actually covered. In the event of an injury, your homeowner’s insurance may not help with a worker’s medical bills, especially if the contractor is unlicensed. Also make sure you understand the limits of your own homeowner’s policy.

Step 10: Hold on to your money. Don’t pay a large deposit or even worse, pay the entire amount before work has begun. Payments should be incremental and not get ahead of the work. The total should not be paid until the job is complete. In the end, a state contractor’s license doesn’t guarantee that a project will come off without a hitch. Talk to your architect about pay applications and retainage – these are methods that the architect can use to help make sure your payments go smoothly.

Step 11: Get more than one proposal/estimate – get three or four; compare the written proposals/estimates; measure what kind of people they are by your personal interaction; you need to know, like and trust the contractor you are going to hire; if you cannot say you know, like and trust the contractor, look for someone else.

Step 12: Go with your gut – if you do not feel right about something, if something just is not jiving, step back and put the brakes on; it is easier to stop and switch horses before getting into the stream, than to try to switch horses midstream; if you do not have confidence, do not go any further; find someone else. Likewise, just because someone gives you a “good feeling” you should STILL do your homework to determine if they are a good contractors. 

Step 13: Hire a general contractor instead of many sub contractors. Once you know what you want done, consider what you realistically can accomplish on your own. For larger projects, especially those that may involve more than three different service providers, a general contractor to oversee your project may be required.

Step 14: Get your permits. You, and your contractor are required by law to get permits for general construction and often electrical, plumbing, HVAC and possibly other trades. Be sure your contractors get the permits themselves, as this makes them responsible for the work. If you get the permit, then you are responsible instead of them. Having the permit gives you more recourse in the case of things going wrong. It’s very difficult to solve problems on projects that are done illegally.

Step 15: Don’t be afraid to stop or temporarily halt a project that’s not going well. It’s your project and you are the one paying the bills.