10 Tips on Hiring and Working with a Contractor

An article from the People’s Law Library of Maryland

Tip 1: Look for experience

• You’ll want to select a contractor with direct experience in the type of project you have in mind.
• Check to see if the contractor is licensed. The Maryland Home Improvement Commission licenses home improvement contractors in the state. Search to see if the contractor has an active license using the Commission’s Home Improvement Public Query.
• The Maryland Home Improvement Commission has information about whether a license is required.
• How experienced a contractor is at communicating with clients is also important. While a busy professional might not answer their phone during the day or return calls immediately, the contractor’s time and effort in communicating with you may show their attention to detail and desire to please.

Tip 2: Ask for references

• Don’t be shy about asking for references from satisfied customers or other professionals in related building trades.
• Contact the references and ask questions.
  • Some questions to ask:
    • Are they satisfied with the contractor’s services?
    • Did they have any problems?
    • Was the work completed on time?
    • How did the contractor handle complaints?

Tip 3: Get multiple bids/quotes

• Talk to at least two contractors. Ask lots of questions.
• If possible, get bids (quotes) for your project from at least two contractors.
• Make sure the bids include information about the work that’s supposed to be done and the materials that will be used.
• Generally, the contractor will get the required building permits. Ask about this. If a permit is required, make sure getting the permit is included in the bid.
• Evaluate the bids. Compare knowledge, quality of work, and responsiveness to requests for information about materials and alternatives in style and design.
• Deposits: A contractor cannot accept more than 1/3 of the contract price as a deposit.

Tip 4: Check for customer complaints

• You should know if a contractor’s previous customers encountered issues with the contractor. Call the Maryland Home Improvement Commission at 410-230-6309 or 1-888-218-5925. Ask if complaints have been filed against a contractor and whether they have been resolved or are still open.
• You can also email the Maryland Home Improvement Commission: DLOPLMHIC-DLLR@maryland.gov
• You can also file complaints against a contractor at their website.

Tip 5: Ask for proof of insurance

• The contractor you hire should have the following:
  • personal liability insurance,
  • workers’ compensation insurance, and
  • property damage coverage.
• Ask the contractor for proof of insurance coverage and call the insurance companies to verify coverage.

Tip 6: Expect fees

• It is reasonable for the contractor to include charges such as:
  • a 10% surcharge above actual costs for materials;
  • a small fee for a credit check (Don’t be offended if the contractor protector their business by inquiring about your credit-worthiness and ability to pay.);
  • interest or finance charges if payments are not received on schedule; and
  • attorneys’ fees and collection costs if full payment is not received. See including options other than a lawsuit for resolving disputes.

Tip 7: Decide how to resolve disputes

• Before you sign a contract and any work begins, ask how disputes are resolved. What happens when a dispute continues beyond a few days and exceeds a certain amount of money? Will the contractor agree to submit the dispute to a mediator and share the costs with you according to pre-arranged proportions? If so, get this in writing.
• Some contracts state that arbitration will be used to resolve any disputes. This arbitration clause could prevent you from being able to file a lawsuit. Arbitration is a type of dispute resolution, similar to a court, where an arbitrator acts as the judge. This is usually faster and cheaper than a lawsuit but may have drawbacks. If the contract proposed by the contractor has an arbitration clause, you can negotiate to have it removed or allow you to pick the arbitrator.

Tip 8: Always put changes in writing.

• If the contractor promises something that isn’t in your original agreement, ask to have it in writing. The best way is to add it to the written contract. Write up the promised item yourself and ask the builder to initial your writing. If both of you sign the change, it is clear that you both agree. This makes it a binding contract that you can enforce.

Tip 9: When to consider a review by an attorney

• If the project costs exceed an amount you consider large (and definitely for jobs over $10,000), consider having the contract reviewed by an attorney.
• In Maryland, many lawyers can review a simple contract for a few hundred dollars. This is worth the price to avoid much greater expenses if problems should arise later.

Tip 10: Read the fine print!

• The Maryland Home Improvement Commission has specific requirements for home improvement contracts.
• Review the requirements to ensure the contract you agree to contains all the necessary information.
  • The agreed-upon price of the home improvement contract should be clearly stated.
  • The contract should contain the approximate dates for the performance of work and when work should be substantially completed.
  • If you are borrowing money to finance the project, the contract must include a specific written notice about the financing.
  • If you are agreeing to arbitration to resolve disputes, the contract must include specific information about the arbitration.
• Remember, a contract is a legally binding document, so it is important to understand what you are signing.

Source Suzanne Hood, attorney at law, Easton, MD; edited by Rene LaVigne; updated by Web Services Librarian.

Original Article page https://www.peoples-law.org/10-tips-hiring-and-working-contractor