Sweet Home Improvement
Whether youíre planning an addition
for a growing family or simply getting new storm windows, finding a
competent and reliable contractor is the first step to a successful
and satisfying home improvement project.
Your home may be your most valuable financial asset. Thatís why
itís important to be cautious when you hire someone to work on it.
Home improvement and repair and maintenance contractors often
advertise in newspapers, the Yellow Pages, and on the radio and TV.
However, donít consider an ad an indication of the quality of a
contractorís work. Your best bet is a reality check from those in
the know: friends, neighbors, or co-workers who have had improvement
work done. Get written estimates from several firms. Ask for
explanations for price variations. Donít automatically choose the
Depending on the size and complexity of your project, you may
choose to work with a number of different professionals:
- General Contractors manage all aspects of your project,
including hiring and supervising subcontractors, getting building
permits, and scheduling inspections. They also work with
architects and designers.
- Speciality Contractors install particular products, such
as cabinets and bathroom fixtures.
- Architects design homes, additions, and major
renovations. If your project includes structural changes, you may
want to hire an architect who specializes in home remodeling.
- Designers have expertise in specific areas of the home,
such as kitchens and baths.
- Design/Build Contractors provide one-stop service. They
see your project through from start to finish. Some firms have
architects on staff; others use certified designers.
Donít Get Nailed
Not all contractors operate within the law. Here are some
tip-offs to potential rip-offs. A less than reputable contractor:
- solicits door-to-door;
- offers you discounts for finding other customers;
- just happens to have materials left over from a previous job;
- only accepts cash payments;
- asks you to get the required building permits;
- does not list a business number in the local telephone
- tells you your job will be a "demonstration;"
- pressures you for an immediate decision;
- offers exceptionally long guarantees;
- asks you to pay for the entire job up-front;
- suggests that you borrow money from a lender the contractor
knows. If youíre not careful, you could lose your home through a
home improvement loan scam.
Hiring a Contractor
Interview each contractor youíre considering. Here are some
questions to ask.
- How long have you been in business? Look for a
well-established company and check it out with consumer protection
officials. They can tell you if there are unresolved consumer
complaints on file. One caveat: No record of complaints against a
particular contractor doesnít necessarily mean no previous
consumer problems. It may be that problems exist, but have not yet
been reported, or that the contractor is doing business under
several different names.
- Are you licensed and registered with the state? While
most states license electrical and plumbing contractors, only 36
states have some type of licensing and registration statutes
affecting contractors, remodelers, and/or specialty contractors.
The licensing can range from simple registration to a detailed
qualification process. Also, the licensing requirements in one
locality may be different from the requirements in the rest of the
state. Check with your local building department or consumer
protection agency to find out about licensing requirements in your
area. If your state has licensing laws, ask to see the
contractorís license. Make sure itís current.
- How many projects like mine have you completed in the last
year? Ask for a list. This will help you determine how
familiar the contractor is with your type of project.
- Will my project require a permit? Most states and
localities require permits for building projects, even for simple
jobs like decks. A competent contractor will get all the necessary
permits before starting work on your project. Be suspicious if the
contractor asks you to get the permit(s). It could mean that the
contractor is not licensed or registered, as required by your
state or locality.
- May I have a list of references? The contractor should be
able to give you the names, addresses, and phone numbers of at
least three clients who have projects similar to yours. Ask each
how long ago the project was completed and if you can see it.
Also, tell the contractor that youíd like to visit jobs in
- Will you be using subcontractors on this project? If yes,
ask to meet them, and make sure they have current insurance
coverage and licenses, if required. Also ask them if they were
paid on time by this contractor. A "mechanicís lien"
could be placed on your home if your contractor fails to pay the
subcontractors and suppliers on your project. That means the
subcontractors and suppliers could go to court to force you to
sell your home to satisfy their unpaid bills from your project.
Protect yourself by asking the contractor, and every subcontractor
and supplier, for a lien release or lien waiver.
- What types of insurance do you carry? Contractors should
have personal liability, workerís compensation, and property
damage coverage. Ask for copies of insurance certificates, and
make sure theyíre current. Avoid doing business with contractors
who donít carry the appropriate insurance. Otherwise, youíll
be held liable for any injuries and damages that occur during the
Talk with some of the remodelerís former customers. They can
help you decide if a particular contractor is right for you. You may
want to ask:
- Can I visit your home to see the completed job?
- Were you satisfied with the project? Was it completed on time?
- Did the contractor keep you informed about the status of the
project, and any problems along the way?
- Were there unexpected costs? If so, what were they?
- Did workers show up on time? Did they clean up after finishing
- Would you recommend the contractor?
- Would you use the contractor again?
You have several payment options for most home improvement and
maintenance and repair projects. For example, you can get your own
loan or ask the contractor to arrange financing for larger projects.
For smaller projects, you may want to pay by check or credit card.
Avoid paying cash. Whatever option you choose, be sure you have a
reasonable payment schedule and a fair interest rate. Here are some
- Try to limit your down payment. Some state laws limit the amount
of money a contractor can request as a down payment. Contact your
state or local consumer agency to find out what the law is in your
- Try to make payments during the project contingent upon
completion of a defined amount of work. This way, if the work is
not proceeding according to schedule, the payments also are
- Donít make the final payment or sign an affidavit of final
release until you are satisfied with the work and know that the
subcontractors and suppliers have been paid. Lien laws in your
state may allow subcontractors and/or suppliers to file a
mechanicís lien against your home to satisfy their unpaid bills.
Contact your local consumer agency for an explanation of lien laws
where you live.
- Some state or local laws limit the amount by which the final
bill can exceed the estimate, unless you have approved the
increase. Check with your local consumer agency.
- If you have a problem with merchandise or services that you
charged to a credit card, and you have made a good faith effort to
work out the problem with the seller, you have the right to
withhold from the card issuer payment for the merchandise or
services. You can withhold payment up to the amount of credit
outstanding for the purchase, plus any finance or related charges.
Improvement" Loan Scam
A contractor calls or knocks on your door and offers to install
a new roof or remodel your kitchen at a price that sounds reasonable.
You tell him youíre interested, but canít afford it. He tells you
itís no problemóhe can arrange financing through a lender he
knows. You agree to the project, and the contractor begins work. At
some point after the contractor begins, you are asked to sign a lot of
papers. The papers may be blank or the lender may rush you to sign
before you have time to read what youíve been given to sign. You
sign the papers. Later, you realize that the papers you signed are a
home equity loan. The interest rate, points and fees seem very high.
To make matters worse, the work on your home isnít done right or
hasnít been completed, and the contractor, who may have been paid by
the lender, has little interest in completing the work to your
You can protect yourself from inappropriate lending practices.
- Agree to a home equity loan if you donít have enough money
to make the monthly payments.
- Sign any document you havenít read or any document that has
blank spaces to be filled in after you sign.
- Let anyone pressure you into signing any document.
- Deed your property to anyone. First consult an attorney, a
knowledgeable family member, or someone else you trust.
- Agree to financing through your contractor without shopping around
and comparing loan terms.
Getting a Written
Contract requirements vary by state. Even if your state does
not require a written agreement, ask for one. A contract spells out
the who, what, where, when, and cost of your project. The agreement
should be clear, concise and complete. Before you sign a contract,
make sure it contains:
- The contractorís name, address, phone, and license number, if
- The payment schedule for the contractor, subcontractors and
- An estimated start and completion date.
- The contractorís obligation to obtain all necessary permits.
- How change orders will be handled. A change orderócommon on
most remodeling jobsóis a written authorization to the
contractor to make a change or addition to the work described in
the original contract. It could affect the projectís cost and
schedule. Remodelers often require payment for change orders
before work begins.
- A detailed list of all materials including color, model, size,
brand name, and product.
- Warranties covering materials and workmanship. The names and
addresses of the parties honoring the warrantiesócontractor,
distributor or manufacturerómust be identified. The length of
the warranty period and any limitations also should be spelled
- What the contractor will and will not do. For example, is site
clean-up and trash hauling included in the price? Ask for a
"broom clause." It makes the contractor responsible for
all clean-up work, including spills and stains.
- Oral promises also should be added to the written contract.
- A written statement of your right to cancel the contract within
three business days if you signed it in your home or at a location
other than the sellerís permanent place of business. During the
sales transaction, the salesperson (contractor) must give you two
copies of a cancellation form (one to keep and one to send back to
the company) and a copy of your contract or receipt. The contract
or receipt must be dated, show the name and address of the seller,
and explain your right to cancel.
Keep all paperwork related to your project in one place. This
includes copies of the contract, change orders and correspondence with
your home improvement professionals. Keep a log or journal of all
phone calls, conversations and activities. You also might want to take
photographs as the job progresses. These records are especially
important if you have problems with your projectóduring or after
Completing the Job: A
ChecklistYou have written warranties for materials and workmanship.
You have proof that all subcontractors and suppliers have been
The job site has been cleaned up and cleared of excess materials,
tools and equipment.
You have inspected and approved the completed work.
Before you sign off and make the final payment, use this
checklist to make sure the job is complete. Check that:
All work meets the standards spelled out in the contract.
Where to Complain
If you have a problem with your home improvement project, first
try to resolve it with the contractor. Many disputes can be resolved
at this level. Follow any phone conversations with a letter you send
by certified mail. Request a return receipt. Thatís your proof that
the company received your letter. Keep a copy for your files.
If you canít get satisfaction, consider contacting the following
organizations for further information and help:
- State and local consumer protection offices.
- Your state or local Builders Association and/or Remodelors
- Your local Better Business Bureau.
- Action line and consumer reporters. Check with your local
newspaper, TV, and radio stations for contacts.
- Local dispute resolution programs.
For More Information
Association of Home Builders Remodelorsô Council
For a comprehensive guide to choosing a professional remodeler and
managing every phase of your remodeling project, visit The
Remodeling Resource. To order a free copy of How to Find a
Professional Remodeler, send a self-addressed stamped envelop to:
1201 15th Street, N.W.
Washington, D.C. 20005
National Association of Consumer
1010 Vermont Avenue, N.W., Suite 514
Washington, D.C. 20005
cooperation with the National Association of Home Builders RemodelorsTM
and the National Association of Consumer Agency Administrators.