Things to Consider When Hiring A Renovation or Remodel Contractor
GET PEACE OF MIND BY DOING YOUR HOMEWORK
The process of hiring a contractor for your new build, renovation or kitchen/bathroom remodeling project can be a daunting one for even the most well-prepared homeowner. You are entrusting a business with your home, your money and your safety. Clients will be inviting work crews into their homes, often unaccompanied while working on structural, electrical and fire safety systems that make your home a safe place to live. This isn’t a decision that any rational person would take lightly. However, with the right amount of research and preparation you can make an informed decision that both protects you financially and assures that your home remains safe.
RESEARCH YOUR CONTRACTOR’S INTERNET PRESENCE
Legitimate contractors tend to have an extensive online presence. This can be through having a website or social media accounts, a Google Business entry, or accounts with trade professional directories such as Homestars or Houzz. These sites can be extremely valuable in collecting information of previous renovation or remodel work performed by the contractor, and often include reviews by both satisfied or unsatisfied clients. “Fly-by-night” or Door-to-door contractors often don’t remain in business under a specific name long enough to get established. Worse, they may be hiding from creditors or obscuring a well-earned bad reputation.
A legitimate contractor should have a portfolio outlining previous work and be able to provide testimonials from satisfied customers. Many firms also provide prospective clients with “Credibility Packages” that provide information on things like operational details, previous work they’ve undertaken, the scope of those projects, and possibly financial data relating to the cost of the project with real estate price differentials that resulted from their improvements. Consultations should also be low pressure, the prospective contractor should seem more interested in gathering information on your project and seeing if it’s within their capabilities rather than trying to quickly sell you on hiring them.
LOOK FOR MEMBERSHIP IN PROFESSIONAL ASSOCIATIONS
Legitimate contractors tend to have an extensive online presence. This can be through having a website or social media accounts, a Google Business entry, or accounts with trade professional directories such as Homestars or Houzz. These sites can be extremely valuable in collecting information of previous renovation or remodel work performed by the contractor, and often include reviews by both satisfied or unsatisfied clients. “Fly-by-night” or Door-to-door contractors often don’t remain in business under a specific name long enough to get established. Worse, they may be hiding from creditors or obscuring a well-earned bad reputation.
A legitimate contractor should have a portfolio outlining previous work and be able to provide testimonials from satisfied customers. Many firms also provide prospective clients with “Credibility Packages” that provide information on things like operational details, previous work they’ve undertaken, the scope of those projects, and possibly financial data relating to the cost of the project with real estate price differentials that resulted from their improvements. Consultations should also be low pressure, the prospective contractor should seem more interested in gathering information on your project and seeing if it’s within their capabilities rather than trying to quickly sell you on hiring them.
ASK FOR PROOF
For larger projects, it’s not rude at all to request a bank letter proving a firm’s financial health as you continue your negotiations.After all, you’re entrusting large amounts of money to a company to complete work on your behalf. Offering evidence that it will be used correctly by financially responsible professionals is an important step they can take in earning your trust. You should also request proof of Warranty coverage, assuring that any errors or accidental damage incurred by your project is the responsibility of the contractor, saving yourself potentially thousands of dollars.
Assure that your contractor has a GST Business Number. This is one way of knowing that you’re dealing with a legitimate business, instead of “some guy” with a truck and some power tools.
Worksafe BC (Formerly WCB) coverage is one of the most important things you need to assure a contractor carries. This serves two functions: First, contractors who do not carry coverage are operating outside of the law. Construction Contractors are legally required to carry this insurance for all of their employees, and only hire subcontractors that also carry coverage. Secondly, without Worksafe coverage, any accidents or injuries that occur while working on your property may be your legal responsibility to pay damages for. Offering proof of Worksafe coverage in good standing is a way a contractor can indicate their legitimacy to potential customers and help build the trust required to make a building project happen.
You can search WorkSafe BC’s database to see if your potential contractor has coverage here
GET A PERMIT
Building permits, particularly in the City of Vancouver, can be a hassle to get. The complex maze of building regulations, inspections, revisions and delays associated with the process can be frustrating and time consuming, but they are still vital to assuring your project is safe and within your budget. Work that’s not bound by the requirements of building codes can often lead to expensive repairs in the future, or worse yet, dangerous conditions such as faulty electrical or natural gas systems.
Even the best tradespeople can possibly make mistakes. Permits and inspections give you the opportunity to discover those errors early and repair them quickly. This is the difference between a short delay in your project as the problem is rectified, and a potentially catastrophic or dangerous failure requiring expensive and disruptive overhauls years down the line.
Even if the work itself is well done, working without a permit incurs a lot of risk. Should the city find out about your project, you may be slapped with a fine or stop work order, grinding your remodel or renovation to a halt and leaving you with a half-completed project in an incomplete home.
Contractors who outwardly encourage you to work without a permit are best avoided. They may take a friendly, conspiratorial tone with you directly about the prospect of “sticking it to the man”, but a display of dishonesty like that bodes poorly for your future interactions. A contractor who acts outside the law to save money or get paid sooner may well take other ethical shortcuts in the name of making a profit. A contractor willing to expose you to risks in the rush to get paid is likely to cut corners on other aspects of your project, from materials to workmanship.
While the process of obtaining a permit can be difficult and time consuming, having an advocate at the drafting table and city planner’s office can be your best bet for streamlining the process. Permit Consultation companies such as our sister company BC Home Drafting and Consulting and similar organizations specialize in creating or revising your building plans while meeting with city inspectors to get you your permit approved as quickly and painlessly as possible.
CONDUCT IS IMPORTANT
Sometimes it can be the small things that give you an indication of what type of company you’re dealing with. A visit to a worksite or office may give you some insights into the level of professionalism and detail with which they operate. Have a look out for the following:
- Is the office clean and well-kept, are the employees friendly and attentive?
- Is the business owner polite, relatively well-groomed and presenting a professional face in meetings?
- Are their tools and vehicles clean and in good working order?
- On-site, how are the carpenters and subtrades behaving? Do they have a professional appearance and demeanor?
- Are the workers smoking inside the building, or do they have a designated smoking area off-site, out of public view? Are there cigarette butts or trash all over the site?
- Is the site relatively clean and organized? Worksites can be chaotic, but an organized team keeps messes to a minimum.
- Are the work crews acting in a way that is rowdy or disrespectful to the neighbors? Is there swearing, fighting or loud music disrupting the neighborhood?
- Has the company done any community engagement? Charitable work, partnership with community organizations or sponsorship/hosting of events are all good indicators.
These may seem like small considerations, but consider the logic behind the infamous Van Halen “Brown M&M’s” contract. In short, the band demanded that any time they perform, their dressing room would have a bowl of M&M’s with all of the brown ones removed. They would outright refuse to play a concert if they found any brown M&Ms in that bowl. This was often used as an example of rock stars with out of control egos, but there was a very smart business strategy behind the clause. Rock concerts (like construction projects) are very technical affairs dealing with expensive and potentially dangerous equipment. The band’s contract stipulated technical, electrical and safety specifications as well as smaller considerations such as snacks. Rather than having to do a lengthy inspection of the promoter’s setup, a quick look at a bowl of candy told them if their contract (including the technical and safety clauses) had been followed to the letter.
What does this have to do with your potential contractor? A contractor who takes poor care of their facilities or assets, acts unprofessionally, or neglects to respect the communities they work in very may well be a contractor who cuts corners and does not perform professional-grade work. Although some tradespeople can appear “rough around the edges” as part of the culture of the profession, qualified professionals can temper that ruggedness with professionalism and expertise that inspires confidence in prospective clients.
GET IT IN WRITING AND KNOW YOUR DOCUMENTS
As you and the builder work towards preparing to begin the project, you should always get written documentation from them outlining the costs expected in the project. When dealing with thousands or even hundreds of thousands of dollars in costs, a handshake deal simply isn’t enough. Getting extensive documentation is key. There’s more than one type of document that could present itself during this process, and it’s important to know the difference:
Estimates: A construction estimate is legally just that, an estimate of the project’s price. The document itself can vary wildly in quality and accuracy and range from a wild guess or back of the napkin calculation to a complex mathematical process involving skilled technicians and professional-grade software. A quality estimate will provide a fair amount of detail regarding the cost breakdown of the project by its various components. An estimate is not legally binding, it is a general “ballpark” figure to help you plan for the project financially and comparison shop.
Scope of Work Document: An essential part of the final contract, this may also be presented as a separate document for review. This document provides a full overview of exactly what work is going to be performed on your project, step by step. A legitimate contractor will not hesitate to provide you with a detailed scope of work and answer any questions you have regarding the process.
Quote: A written, legally binding offer to provide services at a specific price or pricing structure. Any changes to the agreed upon services in price or work performed requires a revision document to be agreed upon by both you and your contractor.
Proposal or Bid: A combination of a Scope of Work document and a Quote. An official offer to perform a list of services outlined in the document at a specific price or pricing structure. Like a quote, will require revision documents to be presented should increased costs or expanded work become part of the project. Detailed Proposals/Bids should outline all aspects of the building process, including materials and subcontractors required. A “Bid” differs from a Proposal in that it is a response from a contractor to a potential client who has put out a formal request for professionals to make an offer on performing the work needed (known as a Tender).
Fixed Price Contract: The official legal documentation that seals the deal. This contract will outline the specific work to be performed, the responsibilities of the contractor, the amount to be paid, and the schedule of the payments. Usually payments are done in different phases according to the project’s level of completion. A deposit is paid first, typically 10-30% of the total quote (depending on project size and required materials), with “progress draw” or “phase” payments billed at milestones in the construction process that are outlined in the contract. This type of contract is good if you want to know exactly what your project will cost and know exactly what you want without alterations or expansions. While there are no surprises, unexpected expansions to the work on your home (due to situations such as discovered rot, code violations or asbestos) are not covered under the contract and will require revision documents.
Revisions/Extras: Documents regarding Revisions or Extras alter the initial proposal or contract to include new work on the project. These may entail a fixed price for specific work, or take the form of an open-ended Cost-Plus billing that applies to work outside of the contract’s bounds. These terms must be agreed upon by both parties before the extra work commences.
Cost-Plus Contract: This contract is also the final, legally binding step before commencing work. Unlike the Fixed-Price contract, the Cost-Plus contract will charge you for the materials, subcontractors, services, employees, overhead and supplies associated directly with completing the work, with an additional fee (usually a percentage of the costs) representing the contractor’s profit. This has possible advantages and disadvantages. A contractor may complete the work at a cost under estimate, saving you money. It’s also possible that unexpected problems or delays could inflate the price to well above what was stated in the initial estimate. Cost-plus contracts are good for projects where you’re likely to make alterations to the build as its in progress, paying a flat percentage on top of the costs. Some builders using cost-plus contracts work to improve client confidence by providing itemized billing by vendor or subcontractor with a full breakdown of how much money was spent on each aspect of the project.
Never provide payment or commence work without getting a contract in writing. Contracts are intended to protect both parties from potential losses or liabilities, it’s in the best interest of both the client and contractor to wait until a full legal agreement is in place before beginning the project or transferring funds.
FINAL THOUGHTS
Entrusting a business with both your home and significant amounts of money for a remodel, renovation or new build project is something that it’s entirely natural to be nervous and cautious about. With careful research, observation and assertively insisting on correct documentation, you can you find a contractor that is more than just someone you hire, but an equal partner in making your dream project a reality.