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How To Hire A Contractor: Do A Background Check
By Mike Holmes
Wednesday, April 18th, 2018 @ 3:59pm
Researching a contractor should be an important part of your home improvement projects. A good contractor will produce a detailed contract and have payment terms tied to project milestones.
I’ve heard many horror stories from homeowners who decided to accept a cash job and there was no paper trail. In the event of an issue DOCUMENTS ALWAYS WIN. Always get your job documented in writing.
Renovations cost a lot of money. Don’t hire the first contractor who shows up in your search and offers to give you a discount for a cash job. Here are some more things you should be looking to find a contractor.
Although a license doesn’t necessarily guarantee a good job, a good contractor will have a valid license. Making sure a contractor has one is the first step in checking them out. Plus, licensed contractors are more likely to carry workers’ compensation and know how to satisfy building code requirements.
Government-issued licenses expire annually, so homeowners should ask to see their contractor’s license and make sure that it’s valid. It is a homeowner’s legal right to request to see a valid license from anyone working on their property to make sure they’re in good standing.
Does Your Contractor Carry Insurance
There have been cases where uninsured homeowners become responsible for personal and property damage that was caused by their renovation. If a neighbour’s house is damaged due to work related to your renovation and you are uninsured, you become responsible for any required repairs, as well as their costs. In some cases, I’ve seen this bankrupt homeowners.
Insurance coverage looks after both public liability and property damage and should be in the $1,000,000 range per occurrence. Every contractor who comes into your home needs proper licensing and insurance.
Liability insurance should cover the homeowners’ family, subcontractors, and suppliers, or other people that might be present while construction is underway. It should also extend to public property, such as nearby water mains, neighbours’ homes, or other surrounding properties.
Homeowners should make sure their policy includes all of the contractors involved, as well as the possible theft of building materials and equipment. Some policies only cover the theft of fixtures and materials that were once physically attached to the house and then literally ripped off. However, many thefts involve tools and materials lying around the job site that have ‘mysteriously disappeared’.
Liability and Worker’s Compensation
Any contractor that works on your home should also carry valid insurance, including full Liability and Worker’s Compensation insurance. Homeowners should ask for the policy number and call to check that it’s legitimate and valid.
Insurance Protects The Homeowners
When a contractor has insurance it protects the homeowner in case any accidents happen on the job site. Accidents include property damage, such as someone dropping an expensive vase, or injuries that occur while working on the home, such as someone falling off the roof. If a contractor doesn’t have insurance and someone gets injured while working on your home, you as a homeowner could be held liable.
If a contractor doesn’t have valid insurance, they can obtain temporary insurance to cover the work being done on your property. Some contractors might refuse to take on a job if you ask them to have insurance. In most cases, you’re better off not hiring them.
Insurance is something you never want to take chances with. Don’t hire a contractor who isn’t covered. It may save you a few dollars, but it’s not worth the risk.
Online review sites are a great tool to use when researching a contractor, but don’t just trust what you read. I’ve personally heard from homeowners that have been burned by a contractor, even though the online reviews were very favourable.
You need to research the referral site too. Who writes the reviews? Does the website do background checks on the contractor? Are they recommended by other pros in the industry? If you are able to, pick up the phone and contact a previous client directly.
Word gets around fast; research beyond the 5 stars on a referral site is very important.
Word of Mouth Builds Business
A contractor who’s good at their job will never be hurting for work. So once you’ve done your online reviews, it’s time to start calling contractors to a list of references from them. You want to speak directly to people who have worked with the general contractor to get an idea of what it’s like to work with them.
Tip for hiring a contractor: while this isn’t always possible, try to see a contractor’s work in person if you can.
I wouldn’t just ask for one or two references from past clients – that would be pretty easy to fake. I like to ask for the contact information of 10 previous clients. Make sure you actually call them! They’ll have the information you need to make an informed decision and make sure you did find a good contractor.
Finding the right contractor for your home renovation projects can be a major undertaking itself! But I promise if you take the time to do it right – your remodel project will run a lot more smoothly. And if you think you’ve found a great contractor, hold on to them for life. Believe me, you’ll be calling them again and again.