Tips for Avoiding Crooked Contractors

When you are looking for a contractor or crew to do property repairs or renovations, there are some steps you should follow to avoid doing business that could go south. Though I hold the belief that most people are generally honest and don’t intentionally scam people, issues arise and there are important things you can do too avoid problems upfront.

When you have a project on a timeline, you need to protect yourself and do everything you can to make sure things go as they should and within your budget. When investors run into problems it’s because they don’t understand what a project entails and they are not as prepared as they should be. Here are some steps you can follow to avoid these issues right from the beginning.

• Network for References – Aside from getting references from contractors (which you should always do) network with others on your power team for personal references.
  Not only are you better off getting more reliable contractors, there are a lot times you can get a discount as a “referral”. When you get references, check to see that the quality of work matches what you want done. Someone’s idea of a “good job” may be very different from yours.
  
• Interview Several Contractors – Bids for a project can differ dramatically from one contractor to another. Though higher bids help for negotiating purchase price, we all know paying more for work doesn’t necessarily mean higher quality workmanship.
  Some contractors will provide steeper bids based on their workload, your lack knowledge or even your pocket book. Along with checking references, make sure they are specific with how they came up with their numbers and what they will do to complete the project. If the numbers, whether too high or too low, don’t add up and they can’t seem to explain it, it should be a red flag to you.
  
• Obtain License Information – Make sure they are registered, licensed and bonded with the state and provide you with copies of such. You can also check with the state Bureau of Consumer Protection or Consumer Affairs to see if any complaints, lawsuits, or judgments have been filed against them.
  
• Communicate Clearly – Make sure you communicate what you want done and make sure they have the same understanding. If you have a difficult time communicating with a prospective contractor in the beginning; that should be a red flag to look elsewhere for help.
  Additionally, while the work is being completed, it is important to meet regularly to follow up on progress, payments, and to tackle any issues before they arise.
  
• Get Everything in Writing – I’m sure you have heard this before, and there is a good reason for it! Even if you hit it off with someone and they seem like a person you can trust, don’t depend on a verbal agreement (This includes the little things).
  Though I feel most people have good intentions, what one person sees as “moral and ethical” may be very different to someone else. Unfortunately, contracts with a “handshake” don’t mean what they used to. There are a lot of people now who will rationalize an obligation later if they are not legally bound by a written contract. For more extensive projects it is also good to have an attorney look over anything you plan to sign to make sure your rights and assets are protected.
  
• Utilize Payment Phases – Never pay a large down payment on any project. Some may require you put down 10% or 20% depending on the scope of work involved, however, any more than this should be a big red flag. This is one of the biggest mistakes I see people make when hiring out work. You can avoid this by arranging payment phases and including them in the terms of the agreement. Also, before making the final payment on large projects, get a completed lien release from the contractor or crew.

Overall, if you follow these steps your experience with contractors will be much more smooth, positive, and productive. In turn you will avoid a lot of the nightmares you hear and read about. Hopefully these guidelines will give you some added protection to help this aspect of your business, as needed, to run more smoothly!

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