The first step in avoiding problems with contractors is to be careful when you hire one. You want to find a contractor that can get the job done quickly and efficiently, with a reputation for good work, and most importantly, with whom you feel comfortable. Some basic tips for hiring a contractor include:

 

-Asking friends and family for advice. They may recommend someone highly or tell you to avoid certain contractors.

-Get at least three bids on the project. When evaluating the bids, make sure that you know exactly what is being covered and make sure that they are all covering the same thing. A particularly low bid may be an indication of poor workmanship, cheap materials, cut corners, or simply because they did not include materials in their estimate.  

-Always make sure that the contractor is licensed and insured.

 

After choosing your contractor, it is important to work out a detailed contract, to eliminate or reduce the likelihood of disputes, disappointment, or other problems. For a detailed guide to contracts, see our section on Contracts and Agreements.

 

 

It is important to note that once you hire the contractor and work out the details, you job as owner is not done. You should keep an eye on the job as the work progresses, without getting in the way of the workers. The best way to do this is most likely to examine the site at the conclusion of the day, after the workers have left. You might want to check to make sure that the materials used are those agreed upon and that the workmanship does not look shoddy. Along with the work being done, safety is an important concern. You should make sure that pets, children, and guests do not get in harm’s way. It is also important to ensure that the worker’s are keeping the site safe and clean. Concerns of any type should be addressed to the general contractor or foreman in a polite and levelheaded manner.

 

Part of monitoring the progress of the job is to regularly meeting with the general contractor, perhaps once a week. This will keep you informed and give you a forum to raise your own concerns. If appliances are being installed, make sure that you get the warranties for them from the general contractor.

 

 

You should be cautious with your payments to the contractor. Do not pay for the project up-front! In fact, do not pay for more than 15% of the project up-front. Contractors have been known to disappear before work is completed, or after doing a poor job. If a contractor insists upon a larger payment, it would be wise to discontinue your relationship with him and hire a different contractor. Payments should be made according to predetermined points of progress, rather than by dates. Make sure that the specified work is completed (and inspection passed) before making the payment. Payments should be made by check, so that proof of payment is available. 

 

If you are using a loan to pay for the construction, make sure that the money comes to you and not to the contractor directly. The contractor should not be paid until you are satisfied with the work. 

 

 

You would do well to avoid liens. Subcontractors and suppliers, who do not have contracts with you, can put mechanic's liens on your property if they are not paid. This would be the fault of the general contractor, but it affects you. Before paying the general contractor, you should make sure that all those who could place a lien have been paid. 

 

You can ask all those who could place a lien for “conditional releases” from them. These documents specify the amount due and release the claim to a lien if payment is made. You can make sure this amount is paid by writing checks jointly to general and sub contractors. After the payment is made you will receive the releases, which you should keep in your records.  Do not make the final payment to the general contractor until you are sure all these payments have been made.