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Working with Contractors Part 2 

Once you are hiring someone

STICK TO THE BUDGET.

It is super easy to get carried away with all the extras that could be/ should be done “since you are doing it anyway”.

This is a classic thought process and a surefire way to get in over your head with “add ons” that were not part of the original contract. If you are planning to just do floors and paint, make sure that in your interviews you have asked enough questions to ensure that this topic doesn’t come up.

If you are painting, then what is being painted and what is included in that whole process? Ask what would be an “add on”, while you are doing the interview so that you can decide how far to take it, before the work starts.

You can expect 10-20% on top of your original quote for contingency funds and unexpected issues.

Quotes should include material, fixtures and labor that will be required to complete project to the specifications. It should also outline who is buying and delivering these items to the site, who cleans up and who pays for clean up.

Have Detailed Contracts…how detailed? So detailed that if, God forbid, all parties in the contract passed away, that a lawyer could easily and plainly see what was to be done and what stage money was payable, as well as what money was already paid. A contractor that balks at this idea is not one that you should hire. Contracts protect all parties so if they are unwilling to sign something or create a contract with you, then re-think hiring them.

Make sure that they all carry WCB, public liability and property damage Insurance, as well as a vaild Business license. Take the time to verify this.

Call their references and check their experience.

Confirm that they are able to obtain any building permits, if required and that they are knowledgeable about what will be required.

Check with BBB

Payment plans are usually formed of a 30% deposit, then 30% when 2/3rds of the work is done as outlined on the contract and the last 30% when the final day is complete with a 10% holdback for you to have sufficient time to confirm all projects are in fact complete. Call Service Alberta if you have further questions about contracts.

During the process of actual renovation:

Supervise your contractors– be there daily so you are well informed. We offer trade management as a service within our staging company if you prefer that road.

A professional is happy to answer all questions- so ask questions

Never pay for more than has been completed. Depending on the business deposits may be only $500.00. Progressive payments are usually agreed to on a contract, but what can end up happening is that you pay your progressive payment and the work is not actually completed to that point. If you are new at this, this will be a problem and some contractors can smell new blood a mile away. So again, be clear on the contract and have it reviewed by a lawyer if necessary. A common issue that occurs is that a contractor has worked all week at your house and the completion level is not where it should be, or has run into legitimate issues that held up the progress. At the end of the week, they want a progress payment and the work is not done to that degree. Do you pay? What if they tell you that their rent is due? Or their kid’s soccer dues have to be paid and they promised to pay it today? Do you pay? What if they say they will come back tomorrow (Saturday) to catch up…do you pay? The answer is no. NO.

This always causes tension and if you are a pushover, you will pay and you will lose at the end when you have paid for more work than has been done and they are now telling you at the end that you owe more than you agreed to pay and unless you pay they will not finish the work. This is a difficult predicament to be in and it does happen, so research, interview, have an ironclad contract, get legal advice and be prepared to be on top of all this.

Mandatory holdbacks are required in the province of Alberta. This is not optional. You are legally required to keep 10% of the final pay back to allow time to ensure project is complete to your contractual agreement. Typically you can review your completed project with a few days and then if there are issues, they must be resolved before the final 10% is paid. Contractors may pressure you to give it to them with promises to return to complete items, do not give it to them. Sob stories are for Disney™ not business!

Be Aware!

  • Be aware of a contractor if they request large deposits, or cash only, or payment in full upfront.
  • Be aware if they do not charge GST or have a business license
  • Be aware if they are too vague or do not want to put details in a written contract
  • Be aware if they have no only a box # for an address and no physical location
  • Be aware if they want you to obtain all permits and do not want to be involved in that process
  • Be aware if they pressure you to decide now or offer you a discount for a “now” decision
  • Be aware if they have answering services and do not use their own phone numbers for contact

Although this may seem like I am trying to scare you from using contractors that is not the case. I am trying to inform you on what can and does sometimes happen, so that you can prepare yourself fully and come out of this process unscathed.

 

Most often working with contractors, although stressful due to the nature of the projects, is usually a great learning experience and a rewarding time to see your vision come alive. Property improvement, even if you are moving, always carries its own rewards.