Hiring a contractor is never an easy process. If you could do it yourself, you would, but sometimes you need a professional contractor and before you hire your next contractor, conduct your own contractor background check.
If you are about to start a renovation project on your house, here are a few steps I created that can help protect you and your bank account.
The problem in New Orleans is some contractors are not honest, trustworthy and professional.
Tips to perform your own contractor background check
1. You can look up the contractors name in the Louisiana Contractors Search
By searching the database, you can determine
- If the company is registered with the state
- How long has the company been in business
- The name of the owner or registered members
- License Number
- Registered Address for the business
2. Run a google search on the Contractor’s name and Business name
Determine if any negative reviews
Determine if any litigation exists
Any Better Business Bureau reviews?
3. Ask the contractor who will be performing the work
Sometimes the person you are talking to is not the individual performing the work
They may subcontract the work to another contractor
If so, get the name of the subcontractor and perform 1 and 2 above
4. Ask the contractor for a certificate of liability insurance
But it’s not over when you receive the certificate of insurance
Contact the insurance agency listed on the certificate
Ask if the policy is active
Certificates can be issued to a contractor but some contractors may not be up to date on their payments and the policy is canceled
Ask “what type of work is the contractor covered for?”
General Liability policies cover a specific type of work.
If after a hail storm, a plumber wants to replace a roof,
more than likely his policy does not cover him to replace a roof.
Ask “does the policy cover work performed by subcontractors?”
Some general liability policies exclude subcontractors work.
The policy may only cover the contractor’s work.
A few more tips when hiring a contractor
Don’t ever give a contractor money up front
If your contractor asks for money before the work begins,
think about hiring a more successful contractor that has money in their business checking account
It is ok to break up the payments as work is performed
If the job is $1,000,
you could make 4 payments ($250)
Hold the last payment until work is complete and you are satisfied.
Get a scope of work to be performed
I recently had this issue with a contractor.
I received the scope of work and the contractor didn’t perform the work we both discussed.
His scope of work did not include the work.
So since I failed to review the scope of work,
I had to pay an additional cost to have the work performed.
A scope of work or estimate should be line itemized and very clear to understand
Both you and contractor should be on the same page of work performed and it should be in writing
Also if any additional work is to be added to the original scope of work,
have them write up a supplement to the original,
give you the cost of the additional work and
sign the supplement so there are no surprise payments
upon completion of the work
“I don’t have insurance or a license, so I will take off 10%”
Don’t do business with an uninsured contractor.
You want to be covered after the job is completed.
A contractor’s warranty is not worth much if the contractor never answers his phone,
but an insurance policy will cover resulting damage from his work.
Poor workmanship is not covered so you can’t make a claim if you are not satisfied with the quality of work.
Only resulting damage from work performed.
Example) Plumber fixes your leaking toilet only to have it damage your new wood floors 3 months later while you are out of town. The resulting water damage to your wood floors would be covered under the Plumber’s General Liability policy.
What’s this all about?
We all can get burned by a contractor,
but if you take a few steps before you hire your next contractor and perform your own contractor background check, you can lower the probability of being taken advantage of and you can save yourself money and headaches if something does not go as planned.