UNDERSTANDING CONTRACTOR CREDENTIALS

Before hiring a contractor to replace your roof, siding, windows or doors, the most important part of decision-making should be made after vetting any contractor you are considering hiring.

Legitimate contractors pay a great deal of money to be in compliance with the governing state code and the corresponding insurance requirements.  It makes it very difficult to compete against those contractors who are literally operating under the radar screen.  Homeowners are often swayed into choosing a cheaper contractor to perform work.  Before choosing the low-end contractor, consider that he is probably not licensed, will not have liability/workers’ comp insurance and will probably be long gone should you have problems in the future.  If you receive a quote that seems too good to be true, it is generally just that.  It is foolish to take such a risk.

Angie’s List conducted an online member pool that revealed that one in three members reported having bad roofing experiences.  Most complaints were about shoddy workmanship, price gouging, no licenses, and taking the money and disappearing.  That is a staggering statistic.  To continue hiring contractors without understanding their credentials is risky

Thanks to technology, it is very easy to check on the validity of contractors, and in the next segment, we will identify some of the sources that are available.  Credentials have to be earned:  you cannot buy your way into the consumer organizations that have been formed to protect homeowners.  The Better Business Bureau, Checkbook Magazine and Angie’s List are excellent reference guides.  Check the web site of any contractor you are considering to see what credentials they are advertising.  If a particular contractor has no web site, that speaks volumes about the legitimacy of his credentials.

Licensing:  Homeowner’s should always verify the licenses of contractors they are considering hiring.  A Class A licensed contractor is required to pass competency tests, which validates the legitimacy of its company.  A licensed contractor is bound by the rules of the contracting board.  You want someone working on your house that is fiscally responsible and aware of the consequences of shoddy work.

Additionally, if you risk hiring a contractor who is unlicensed, consider the consequences should an inspector drop by the work site and ask to see the contractor’s credentials and there are none. The inspector could issue a fine and a stop work order, leaving your job unfinished until you can find a new contractor to finish the job. Should an inspector shut down your job, think of the effort involved in finding a legitimate contractor who would be able to step in on a moment’s notice and finish someone else’s work, which may not have been done correctly to begin with.

Liability and Worker’s Comp Insurance:  Always ask for proof of liability and workers’ compensation insurance.

Consider what could happen if an uninsured contractor and his employees were doing work on your home, and one of the employees got hurt.  That employee could sue you for medical expenses and lost wages.  That contractor is actually putting homeowners at risk if someone is injured on the job. Or, what if the contractor does damage to your property?  If they have no insurance, you will be paying the bill.

Liability insurance covers property damage. Worker’s Compensation insurance covers injuries the contractor’s employees could sustain while on the job.  If the contractor does not have either coverage, the homeowner may be liable to pay any bills.

Financial Responsibility:  You will want to know if your contractor’s company is in good financial condition.  Some good signs are the number of years in business and the number of employees.  Does the contractor have unpaid bills with suppliers or liens against them.  Does the company make money?  A company that does not pay their bills and make a profit will not be around for long.  What if a contractor goes out of business after taking your deposit?  You could be left holding the bag.  It does not hurt to ask a few extra questions to avoid fiscally irresponsible contractors.

Don’t risk complicity in assisting contractors to operate under the radar screen.

For additional information, please stay tuned for our next article – Choosing a Trustworthy Contractor.